Recovery and Enforcement Act

JPMorgan Finalizes $13 Billion Settlement With Department of Justice

On November 19, the U.S. Department of Justice announced that JPMorgan Chase & Co. has agreed to pay $13 billion to settle a number of federal and state RMBS-related civil claims against JPMorgan and two institutions that JPMorgan acquired, Bear Stearns and Washington Mutual Inc. (WaMu).  Under the terms of the settlement, $4 billion will be distributed in consumer-related relief for mortgage writedowns, anti-blight work and mortgage payment reductions.  The agreement also includes a previously-announced $4 billion settlement with the Federal Housing Finance Agency.  Additionally, JPMorgan will pay a $2 billion civil penalty to the Justice Department for claims brought under the Financial Institutions Reform, Recovery and Enforcement Act, $1.4 billion to the National Credit Union Administration, $515.4 million to the Federal Deposit Insurance Corp. and over $1 billion combined to the states of California, Illinois, Massachusetts, Delaware and New York.  JPMorgan acknowledged in a statement of facts that its employees and employees of Bear Stearns and WaMu failed to disclose to securitization investors that certain loans did not comply with underwriting guidelines.  The settlement does not resolve any potential criminal liability of JPMorgan or its employees.  Settlement AgreementStatement of Facts.