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JPMorgan Chase Announces Policy Changes Regarding Payday Lenders

March 20, 2013


JPMorgan Chase, payday lenders, policy

JPMorgan Chase (NYSE: JPM), a global financial services firm that serves millions worldwide, announced today a policy initiative that it says "will protect customers when payday lenders and other billers seek inappropriate payments from Chase's consumer deposit accounts." "Some customers agree to allow payday lenders or other billers to draw funds directly from their accounts, but they may not know some of the aggressive practices that can follow," explained Ryan McInerney, CEO of Consumer Banking at Chase. "Those practices include repeated attempts for payment that can result in multiple returned items. We don't believe these practices are appropriate, and are making these changes to help protect customers from unfair and aggressive collections practices." The company outlined the following four aspects to its policy change: -- "Chase will only charge one returned item fee to customers in cases where a biller presents items that are returned to them due to insufficient funds in the customer account more than once in a 30-day period, even if the biller tries to collect multiple times. This change is intended to address payday lenders and others who present repeated payments to customers that are not in the spirit of their signed agreement with the customer. This change will become effective by the end of May. " -- "Chase is working to proactively identify potential misuse of the Automated Clearing House (ACH) system -- including misuse on the part of payday lenders or other companies -- and report such practices to the National Automated Clearing House Association. Chase will work with NACHA to try to strengthen their own policies to disallow excessive presentments." -- Chase has "an existing policy to always follow a customer's instructions to stop a payment," and plans "to enhance communication and require additional training regarding that policy." -- "Chase will make it easier for customers to close their accounts when there are open pending charges, including payday lender payments." Chase says that if it believes "those pending charges are inappropriate," they will not be honored.

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