JPMorgan Chase Bank, N.A., was fined $4.6 million by the Consumer Financial Protection Bureau for alleged failures related to information it provides for checking account screening reports.
Columbus, Ohio-based Chase violated Fair Credit Reporting Act requirements by failing to establish processes to accurately report information about consumers’ checking account activity to consumer reporting companies, the bureau said.
Chase also allegedly failed to provide consumers who disputed their information with the results of its investigation. The bankalso failed to tell certain consumers which consumer reporting company supplied the information that resulted in Chase’s denial of their checking account application.
Between July 2010 and December 2014, Chase failed to inform investigation results to “thousands of its customers” despite a legal obligation to do so, the CFPB said.
Additionally, companies are required to identify the consumer reporting company which provides information used to deny a checking account application. Yet, between October 2014 and February 2015, Chase sent denial notices to approximately 17,500 checking account applicants without this identifying information.
Banks screen potential customers based on reports about prior checking account behavior created by consumer reporting companies. Banks that supply information for those reports are legally required to have proper processes in place for reporting accurate information. Chase did not have these processes in place and didn’t communicate to consumers results of reporting disputes or key aspects of checking account application denials.
“Information about checking account behavior is used to determine who can open a bank account,” said CFPB Director Richard Cordray. “Because Chase did not have the required processes to report this information accurately, and kept consumers in the dark about reporting disputes and application denials, the Consumer Bureau is imposing a $4.6 million penalty and other measures to stop these violations in the future.”
That $4.6 million will go to the CFPB’s civil penalty fund while Chase will be required to report the results of investigations to affected consumers. It will also provide the relevant consumer reporting company name and its contact information to consumers whose applications were denied.