When it rains it pours, and JPMorgan Chase (NYSE:JPM) is in the middle of a monsoon. Bloomberg is reporting the superbank itself is predicting it will soon face even more regulatory enforcement action, this time over credit card related practices.
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In a May 8 Securities and Exchange Commission filing, JPMorgan said it "expects that its banking supervisors will in the future continue to take more formal enforcement actions against the firm." Collections practices and add-on products in particular are going to take center stage.
According to Bloomberg, both JPMorgan and Bank of America (NYSE:BAC) "stopped offering such add-on products entirely in the face of regulatory scrutiny," so it's not entirely clear what the Consumer Financial Protection Bureau will be going after. But apparently JPMorgan feels sure enough about the issue to make an official announcement.
The end is nigh ... maybe
If credit card related enforcement action against JPMorgan sounds all too familiar, that's because news broke just this past Thursday that California's attorney general would be filing suit against the superbank for engaging in "widespread, illegal robo-signing [and] debt-collection abuses against approximately 100,000 California credit card borrowers over at least a three-year period."
So maybe that solves part of the above-mentioned mystery: JPMorgan may have stopped certain credit card related practices, but that's no guarantee regulators won't take action against the bank for past practices.
However you want to look at it, though, JPMorgan just can't seem to catch a break. But the rubber finally meets the road at this year's shareholder meeting, now less than a week away, with Dimon facing a proxy vote to strip him of his position as chairman. The vote is non-binding, but a majority "yes" could compel the board to take the proposed action anyway.
If Dimon survives this vote -- what has become a referendum on his tenure at JPMorgan -- investors at least will be able to relax, secure in the knowledge that their bank remains in the hands of the CEO and COB that has delivered three straight years of record profits and brought their bank out of the financial crisis arguably stronger than any other big bank out there.
Of course, Jamie Dimon staying put won't necessarily stop regulators from pursuing the bank -- potentially the opposite, in fact. A Dimon win might egg them on in their pursuit. Buckle up, Fools. The next week or two is going to be a very interesting time for JPMorgan watchers and investors.
This is a crucial time for the country's biggest bank, and may even be a tipping point: one I think the bank is going to emerge from stronger than ever.