Four months after it tripled the interest rate on my line of credit, JP Morgan Chase notified me that the rate increase had been an error and it was returning me to the original rate and crediting my account for any erroneously charged interest.

The rate was back to normal on the next bill, two months quicker than I was told to expect.

I am so suspicious…but nonetheless amazed.


Capitol One: Yes, We Can

Attorney Jonathan Stein has blogged about Capitol One’s raising the credit card interest rates of 70-75% of its customers. Because …. you know the answer: It Can.


JP Morgan Chase has decided not to discriminate against small business owners by tripling their commercial interest rates. Now consumers can share the wealth, too — with Chase, of course. USA Today reported on 2/8/2008 that Chase has added a $10 a MONTH fee to low-rate credit card accounts. Yep: $120 a year. Not only that, the fee is added to the card balance, which means it bears interest.

I believe we’ve found a new circle of Hell!

Not long after my post railing against Chase raising its small business interest rates, the name of the bank took on a different and unintended personal meaning. A Friday mail delivery included a large check drawn on a Chase account in another state. To expedite access to the funds, I decided to deposit it into my Chase checking account rather than the one at a more convenient local bank. I delayed my trip to the bank looking for current deposit slips and finally abandoned that quest with the idea that I’d fill out a blank slip at the nearest branch, on the other side of town about 15 minutes away. Three police cars with lights flashing passed me on the highway; two sped ahead while one, curiously, took the crossover and headed back south. When I pulled off the highway, I saw another police car outside the Chase branch. And another. And one in the grocery store parking lot across the street. And a rescue squad van. Seven marked and unmarked cars in all; I counted. Still, I was on a mission, so I pulled around the bank of the bank, parked and got out. “May I help you?” a man asked, who was pulling police line tape around the perimeter of the building. “I was going in to make a deposit,” I said, every molecule of my German heritage fixated on the goal. “The bank is closed,” he said.

I drove back to my side of town and made a deposit in person at the local bank. I described the scene to the tellers. “Maybe someone had a heart attack,” one said. “Maybe someone died,” said another.

I left a message for my friend Rex, decoder of so much in this existence, and reminded him of the What Was That? service we’d craved years ago: a phone number you could call and ask “What was that?” and someone would explain what that was, whatever that was.

Having worked in a bank himself, Rex knew exactly What That Was: a robbery. Huh? In THIS tiny, semi-rural town? Look for details on the news, he urged. Yeah, right, I said. One local news station in the state and it wasn’t likely to cover this. By late evening the Need to Know — and the visceral reaction from understanding how narrowly I’d missed this — drove Rex to phone me back in search of details. I hadn’t bothered to look online; since I was driving during our call, he searched The New Jersey Star-Ledger and Daily Record sites. Yep: robbery.

Armed robbery.

Armed robbery by a man who walked into the bank wielding a gun. (Well, yielding a gun is what the Star-Ledger actually said.) Right about when my mail delivery arrived. If I hadn’t poked around looking for deposit slips, I would have walked into his little pistol party.

Those cop cars that passed me were on their way to the bank. The one that took the turnaround and headed south was entering a fray that would cross two counties and involve some 30 police vehicles (according to the purported eyewitnesses who posted comments on the Star-Ledger site). The suspect made it to East Orange, some 40 minutes away, where he exited the freeway and drove back on, up the exit ramp, right into oncoming traffic. After the eventual collision he jumped out and ran, finally to be caught on foot.

Other fun fact: He’d scoped out the bank from a table at the Jefferson Diner (as seen on the Food Network) next door. Which I’d visited for the first time the day before. The difference being that I had eggs, while he had a cheese sandwich and a bowl of soup. And that I was on a different end of a robbery.

My local news cynicism was borne out the next morning. The print edition of The Star-Ledger reported four crime stories in my county. None was the bank robbery. The most column inches went to what? A house fire in which a cat died.

I received notice from JP Morgan Chase yesterday that it’s tripling the annual percentage rate on my business line of credit. The hike was “in response to market conditions and to maintain profitability on your account.”

A NY Times report shows that JP Morgan Chase’s approved share of the first stimulus package is $25,000 million (see http://projects.nytimes.com/creditcrisis/recipients/table). And the purpose of that package was to do what again? Stimulate the economy by increasing the availability of credit? What Chase is doing is the opposite: discouraging small business borrowers from using their commercial lines of credit.

I thought Congress might like to know what Chase is doing with its stimulus package and have written to the relevant heads of the Senate and House committees. I encourage you to do the same if you, too, get a rate hike that has nothing to do with your behavior or credit. To make it easier, here are addresses:

Senator Max Baucus
Chairman, Senate Committee on Finance
511 Hart Senate Office Building
Washington, DC 20510

Senator Chuck Grassley
Ranking Member, Senate Committee on Finance
135 Hart Senate Office Building
Washington, DC 20510

Representative Barney Frank
Chairman, House Financial Services Committee
2252 Rayburn Building
Washington, DC 20515

I got an unexpected vacation from the universe of BigMortgage (the subject of my December 20 post). It came in a call from an officer at my small local bank, which has branches in only a few counties in northern NJ. He’d tagged my account to follow up on an overdraft protection application I’d made and, when it hadn’t attached to my account on the day he expected, he’d looked into it. He was calling to tell me that my original application was one of the documents that had gone missing during a recent move in the administrative office. He actually said the words “I apologize,” on behalf of himself and the bank, and asked me to come in and sign a replacement original.

A financial institution not only owning up to a document loss, but alerting me to it, apologizing for it and taking immediate action to rectify it? I knew what I had to do.

When I appeared in the lobby, he recognized me by the sound of my voice. The new document took very little time. I said how he’d handled this was an example of why it’s important to do business with a local bank. He started a vague spiel on the bank’s commitment to being local, so I brought my appreciation into something more specific. First I told him a client was being so mistreated by BigMortgage that we’d decided local banks are the only way to go for a mortgage, even if it costs a little more. Then I said, “I hope you’re allowed to accept this” and handed him a small bag of homemade buttercrunch (like a Heath Bar) I’d tucked into my purse for exactly this purpose.

I felt a huge wave of energy come across the desk, as if he wanted to fling himself at me in a huge, long hug. Which was just what I felt like doing.

The Word is Kafkaesque

If Franz Kafka were alive today, he would be writing about the labyrinthine horrors of big corporations. Given some of what I’ve seen lately, he may as well be writing the script.

A client and I have been trying for five months to get two things from the company  servicing her mortgage, which I’ll call BigMortgage:  a complete copy of her file and verification of whether the original note holder still owns the retained interest he claims. We’ve tried the usual tools:  Calls. Email. Faxes. Demand letters, to the director of operations as well as to the legal department. But BigMortgage operates in its own universe, which is untainted by responsive communication, customer service, accountability and professional courtesy between lawyers. And honesty, I am coming to see.

Communication is set up to be stymied. Her account manager does not have a phone number;  we must either send her faxes or leave messages  on the voicemail of her supervisor (who is out one workday a week) and wait for someone to get around to calling.  Her account manager is also not  permitted to receive outside email, or so she says, and instructs my client not to use it again when she digs up an address.  We’re sent bits and pieces of the file but never near the 300 pages my client was previously told the file contains.  When she offers to drive to BigMortgage’s headquarters to look at her file herself, she is told not to bother; customers are not allowed in the building.

As for the issue of the retained interest — the only consistency is inconsistency. BigMortgage gives us a copy of a note purchase agreement that establishes the existence and the amount of the claimed interest. Then it says it won’t pay it and won’t explain why. Then it says it will pay and confirms the amount during the closing of the sale of my client’s house. My client, not yet appreciating that she is dealing with BigMortgage at the Brigadoonlike intersection point between its universe and ours, agrees to escrow that amount of money from the sale proceeds so that the retained interest claimant will release the weird lien he has placed on her property, which is what made  my client a supplicant at BigMortgage’s cold and unwelcoming altar in the first place.  BigMortgage is told on the spot that the escrow is being made relying on this representation. Two days later, the research department employee who communicated this news is no longer at his extension.  Attempts to track him down fail. Six weeks later, BigMortgage issues a letter saying it owes nothing. The legal department has not responded to my letter demanding payment of the interest before the escrow agreement deadline or an explanation of why it is not owed. And customer service is saying it will take 60 days to get a copy of the file and they’ll call back. Which they haven’t.

Friends who’ve worked at mortgage companies tell me files are notoriously incomplete. Probably BigMortgage can’t find the document that explains its position, they say, although it’s possible that the loan simply got entered incorrectly into the system.

Other attorneys tell me worse.  One has a client who renegotiated his loan, got a signed agreement out of BigMortgage, sent in his first payment under the new agreement and had it rejected as insufficient. Another tells me he has never, ever resolved a problem with BigMortgage by dealing with its own staff; it has always taken filing a lawsuit and getting outside counsel involved for anything to happen.  He says the corporation has a pattern of stonewalling — the  very word both my client and I have been using in the last months.  He has come to suspect that when BigMortgage acquires loans by absorbing other companies (as happened in my client’s case), its employees code all the loans the same, without looking at the originating documents.  Then it takes an absolute position of nonresponsiveness, which forces the affected consumer to bear the expense and responsibility of cleaning up however BigMortgage has messed up his account.

What a business model: We’re holding the money and the documents, and we won’t explain what we’ve done with either unless you sue and make us.   An approach like this would destroy a small business .  Make the customer responsible for your problem? He’ll not only leave; he’ll badmouth you to everyone he knows.  Grow big enough and  accountability becomes diffused and evaporates, especially if you hinder customers’ ability to reach the front line of employees. If honoring your own legal commitments or protecting the reputation of your brand isn’t enough, what incentive is there to be accountable when it’s so time-consuming and expensive for customers to leave you for a competitor?  How many consumers have the money or energy to battle this? How many people just give in, because they don’t have the resources to fight?

Dribbles of individual lawsuits haven’t to date inspired  BigMortgage or its competitors to adopt better business practices.  But other avenues may trigger systemic reform, especially if more and more people start walking down  them.   Alerting state and federal representatives to abusive and deceptive business practices.  Filing complaints with regulators. Feeding leads to investigative reporters.  Taking out mortgages with local banks, even if they cost a little more.  I will not be surprised if the current scrutiny of mortgage companies eventually extends to what they do to people who are not in default.