JPMorgan ordered to fix debt-collection practices

U.S. bank regulators on Thursday ordered JPMorgan Chase & Co to improve its debt collection practices to address errors in how it pursued credit-card debts in court.

The order came the same day JPMorgan, the largest U.S. bank by assets, agreed to pay $920 million in penalties to resolve civil probes of its "London Whale" derivatives trading losses last year.

The order from the Office of the Comptroller of the Currency does not provide details of how extensive the debt-collection problems were.

The order, which does not include financial penalties, allows JPMorgan Chief Executive Jamie Dimon to resolve another of the multitude of legal issues weighing on the bank.

But the action leaves the door open for regulators to possibly fine the bank over the issue later.

The enforcement action requires the bank to review the accounts of customers affected by the debt-collection errors and compensate them.

The bank is required to review all of its debt-collection litigation, excluding home loans, dating back to January 2009.

The OCC also faulted the bank for its compliance with the Servicemembers Civil Relief Act, and ordered it to improve its policies governing benefits for armed services members. That law allows members of the military to postpone or suspend financial obligations such as outstanding credit card debt payments.

JPMorgan disclosed in August that it expected the action from the OCC, and said other regulators including the Consumer Financial Protection Bureau were also investigating the matter.

Iowa has been leading a group of 13 states investigating the bank. A spokesman for Iowa Attorney General Tom Miller said on Thursday the group was examining JPMorgan's debt-collection practices and was also looking at industry-wide issues.

Separately in May, California's attorney general sued JPMorgan and accused it of filing faulty documents when seeking to collect on some credit card debt in the state.