Buried in Chase's Legal Battles is a Game-Changer for Debt Collection

If you’ve lost track of who’s investigating mega-bank JP Morgan Chase for what, and how much money they owe to whom, I don’t blame you. The bank’s legal costs have ballooned to $31 billion since 2009 (here’s a great graphical breakdown of what they owe). This month alone, JP Morgan Chase has been in the news for allegedly ignoring Bernie Madoff’s Ponzi scheme, and cutting a deal with federal regulators to pay $13 billion for allegedly selling bad mortgage bonds pre-recession. Recently, the bank has also agreed to a consent order with the Office of the Comptroller of the Currency to reform its debt collection practices; and while there may be fewer zeros attached to that order, the ripple effect throughout the industry could be huge.

The consent order essentially creates a blueprint for dramatic oversight by banks over their collection agencies, lawyers and debt buyers. Chase will be responsible for the oversight, monitoring and supervision of not only their internal data and information, but also information and data that goes outside of the bank; this includes data that goes to collection agencies and/or attorneys. Chase is going to have to be responsible and ensure that all of that is compliant within the order and within the legal requirements.

Furthermore, the consent order defines “third-party providers” as any agent, independent contractor, consulting firm, law firm or other material participant in the process; that includes debt collectors! Chase has to have procedures in place for outsourcing its collection litigation.

Discover how the OCC’s actions against Chase could impact all players in accounts receivable management with this special To the Point: The Chase Consent Order. We’ve compiled the key points from our September 27, 2013 webinar with Maurice & Needleman P.C. to highlight how the Chase consent order applies to debt collectors, debt attorneys, debt buyers and more. Collection agencies and debt buyers – big and small – need to be prepared for the ramifications this will have in working with banks and other financial institutions. If you are – or would ever want to be – a vendor for JP Morgan Chase, this is compliance information you need to know.