JPMorgan Chase (JPM) agreed to pay the federal government $45 million to settle a lawsuit accusing big banks of charging military veterans excessive fees on government-backed loans, attorneys for the plaintiffs said Tuesday.
Two whistleblowers filed the original case against Wells Fargo Bank (WFC), Bank of America (BAC), CitiMortgage (C), Suntrust Mortgage (STI), Washington Mutual Bank, PNC Bank, Countrywide Home Loans, Mortgage Investors Corp. and First Tennessee Bank.
JPMorgan Chase declined to comment, but said the settlement stipulates the agreement is not an admission of wrongdoing on the bank's part. The law firm of Butler, Wooten & Fryhofer represented the plaintiffs in the case and confirmed the settlement Tuesday.
To date, JPMorgan Chase is the only lender to settle.
The original lawsuit, which dates back to 2006, alleges the banks violated the federal False Claims Act and provisions of the Interest Rate Reduction Refinancing Loan Program by over-charging veterans on fees not allowed under the IRRRLP program. The IRRRLP refinancing program is available to homeowners with Veteran's Administration loans and allows them to refinance at lower rates.
The complaint claims the banks overcharged veterans on fees and then hid those details when applying to get insurance on those loans from the federal government. The plaintiffs claim taxpayer backing on the loans would not have been granted if the federal loan program had known about the excessive fees charged.