[Congressional Record (Bound Edition), Volume 159 (2013), Part 11]
[House]
[Pages 16092-16093]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       JPMORGAN CHASE SETTLEMENT

  The SPEAKER pro tempore. The Chair recognizes the gentlewoman from 
Ohio (Ms. Kaptur) for 5 minutes.
  Ms. KAPTUR. The greatest power a banker has is to create money. Banks 
can also abuse that awesome power. And it seems like the bigger the 
banks are the more they abuse that power. Let me relate a vivid 
example:
  It was over 5 years ago that America was hit with the great Wall 
Street-induced recession. Five years later, those banks are still 
paying our people--their customers--almost nothing if customers have 
deposits or certificates of deposit with those institutions. That is 
harming seniors across this country. That is harming people who are 
trying to make a go of it. It is harming investors. Meanwhile, banks 
continue to post huge profits, especially the very biggest ones that 
are market controllers--for example, JPMorgan Chase, just in the last 
year, took $21 billion in profit; Wells Fargo, $19 billion; Goldman 
Sachs, $7.5 billion in profits; Citigroup, $7.5 billion; Bank of 
America, $4 billion--while Americans continue to struggle to make ends 
meet and recuperate from that Great Recession.
  Now, it has been reported this week that JPMorgan Chase will agree to 
a $13 billion settlement of the civil suit filed by the United States 
Department of Justice and the Federal Housing Finance Agency in order 
to resolve several investigations into their fraudulent mortgage 
securities business. One question I have with that $13 billion: Are 
they actually going to pay it, or is JPMorgan Chase going to use it as 
a deduction on their taxes as a business expense or some other tax 
dodge that their accountants and lawyers figure out?

                              {time}  1030

  From September 7, 2005, through September 19, 2007, JPMorgan and its 
affiliates knowingly misrepresented the

[[Page 16093]]

value and quality of their mortgage bonds that it sold to the Federal 
Housing Finance Agency. The result of their actions are reverberating 
still throughout our economy, as foreclosure rates in places like Ohio 
continue to go up. They are still above the national average. In 
August, foreclosure starts in Ohio were up 44 percent from the previous 
month, for a total that month of 9,542 foreclosure filings. Tens of 
thousands of people are being affected from coast to coast.
  Minority neighborhoods were especially harmed by the financial 
crisis. A report by the Urban Institute estimates the loss of home 
equity in African American households as a result of the foreclosure 
crisis is at $194 billion. All the wealth that was accumulated since 
World War II vaporized. They were hit very hard.
  Hispanic communities lost $177 billion in home equity during the same 
time period. Awesome.
  Although a settlement has been reached in this particular case, this 
should not be the end of the investigation into Wall Street banks 
because JPMorgan and their brethren have proven to be repeat offenders. 
Criminal charges should be pursued, not just civil.
  This settlement is just one of many recent penalties that JP has had 
to pay. In June 2011, JPMorgan had to pay $153 million in penalties to 
the Securities and Exchange Commission for misleading investors about a 
collateralized debt obligation. In August 2012, the bank had to pay 
$1.2 billion for what it had done to conspire with VISA and MasterCard 
to set the price of credit card and debit interchange fees.
  In July of this year, JPMorgan had to pay $410 million in penalties 
and repayments to the Federal Energy Regulatory Commission for 
revealing that the bank had been manipulating the California and 
Midwest electricity markets from September 2010 to November 2012. 
JPMorgan Chase had to pay a $100 million fine for reckless conduct and 
market manipulation in connection with its 2012 London Whale trading 
scandal.
  The question I have: Can they deduct any of these penalties from the 
taxes they pay, or are they really paying back in full those penalties 
to the government of the United States free and clear to pay back the 
American people for their criminal behavior?
  In the past 3 years, JPMorgan has posted year-after-year record 
profits, driven by their stock prices. Last year, the firm made $21.3 
billion. Therefore, with this recent settlement, it would be about only 
half of their most recent profits. For a frame of reference, there are 
only seven Dow Jones Industrial Average companies that made more than 
$13 billion profits last year.
  We can say to ourselves, would these fines, if they were really paid, 
do any harm to JPMorgan? Think about this. They have $87 billion in 
reserves and their total assets are valued, by their own accounts, at 
over $2.25 trillion. That is a ``wow,'' by any account.
  The result of all of this misbehavior is many Americans have lost all 
of their accumulated equity.
  Mr. Speaker, it is time to restore prudent banking. I ask my 
colleagues to sign on to H.R. 129, the Return To Prudent Banking Act of 
2013. Let's restore the Glass-Steagall Act and the value of our money.

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