Dimon’s Annual Meeting Brings Apology
Jamie Dimon, JPMorgan Chase & Co. (JPM)’s chairman and chief executive officer, said he was sorry for foreclosure mistakes as hundreds of protesters at the annual meeting demanded he do more to help homeowners and small businesses recover from the financial crisis.
For any errors that were made, “we deeply apologize,” Dimon, 55, said today at the shareholders’ meeting in a 2- million-square-foot office building in Columbus, Ohio. “We are doing everything we can to keep people in their homes that should stay in their homes.” Dimon said he especially regretted the bank’s mistakes in foreclosing on active-duty military personnel and for fumbling paperwork on other home seizures.
JPMorgan and other large U.S. banks are feeling the backlash from the housing bust, with mortgage losses and related litigation suppressing earnings and regulators investigating industry practices. The U.S. Justice Department is suing Deutsche Bank AG for more than $1 billion, and has said it may go after other lenders for filing false claims for federal mortgage insurance on faulty loans.
JPMorgan’s record $5.56 billion in profit during the first quarter was tempered by “extraordinarily high losses we still are bearing on mortgage-related issues,” Dimon said last month. JPMorgan’s $17.4 billion in net income last year made it the most profitable bank in the U.S.
“Everyone is hurting, it seems like, except for Wall Street and its executives,” said Jordan Estevao, who helped lead demonstrations outside the meeting for National People’s Action, a non-profit consumer advocacy group.
Protest organizers said about 850 attended, while the bank put the figure at 350. Attendees were screened at four security check points to get into the meeting.
“So many of our folks are getting screwed by these big banks,” Acree said. “A lot of people are angry. I’m angry. We see economic stress on our families, no jobs and foreclosures.”
Protesters shouted “No more diamonds for Dimon” and other slogans, and one was arrested, according to the advocacy group.
“They’re not doing their part to aid a recovery,” Estevao said in an interview yesterday. “Instead they are lining their pockets. They’re making massive profits, still giving themselves massive bonuses and doing too little to help spur recovery for the rest of America.”
Bank of America
Fourteen of the largest mortgage servicers, including JPMorgan and Bank of America Corp. (BAC), the biggest U.S. bank by assets, signed an agreement in April with the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency to refund costs to homeowners for foreclosures that were mishandled and to overhaul procedures for seizing homes.
JPMorgan took a $1.1 billion charge in the first quarter and may add as many as 3,000 employees to comply with the consent decree. The Department of Housing and Urban Development, Federal Housing Finance Agency and state attorneys general also are investigating the industry’s foreclosure practices.
General Counsel Stephen Cutler said at the meeting that the bank’s litigation costs were higher than expected in “every area.” He said expenses for outside legal advice last year were more than $700 million.
JPMorgan agreed in April to pay $56 million to settle claims that it overcharged military personnel on their mortgages. Dimon has previously apologized, saying the bank erred in handling certain mortgages covered by the Servicemembers Civil Relief Act.
Cutler said the bank mistakenly foreclosed on 27 active- duty military personnel who were protected by the law. JPMorgan is “making amends on every single one of those” by either paying off their mortgages or giving them their houses back for free, he said.
Dimon said the military foreclosures were the worst mistake the bank has ever made.
“We deeply apologize to the military, the veterans, anyone who’s ever served this country and we’re trying to go way beyond,” he said. “We’re sorry,” he added, drawing a round of applause.
A shareholder proposal requiring the bank to adopt and disclose uniform foreclosure policies failed with 6.4 percent of the vote. None of the other investor proposals were approved either, with one to allow shareholder action by written consent winning the most support with 48.99 percent of the vote.
Investors also re-elected JPMorgan’s board of directors and reappointed PricewaterhouseCoopers as its auditor.
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