JPMorgan Chase said Thursday it will not pay $6 billion in fines for its role in a complex mortgage scheme that allowed wealthy investors to buy millions of subprime mortgages at inflated prices, despite admitting in court filings that its sales practices contributed to the market crash.
The bank said in court documents filed in Manhattan that it is also paying a $25 million civil penalty for helping to mislead regulators about the extent of its mortgage-related failures.
The company also agreed to pay $5 million in restitution to regulators and another $25,000 in restitution for fraud.
The bank agreed to “take all reasonable measures to prevent similar conduct from happening again,” the bank said.JPMorgan’s statement did not mention the federal government.
But the bank also acknowledged that it violated a provision of the 2010 Bank Secrecy Act, the federal law that requires the sale of securities that are “designed or likely to be used to commit securities fraud.”
“The U.S. government has been monitoring JPMorgan Chase for years, and the bank has consistently cooperated with federal authorities, including providing information about the mortgage product market collapse, including its sales of sub-prime mortgage securities, for more than two years,” the statement said.
“We are taking all necessary steps to ensure that this does not happen again.”
The bank admitted in court papers that it “engaged in a wide range of frauds” in its residential mortgage business.
The department said that between 2004 and 2013, the bank sold more than $4.5 billion in subprime loans.
In addition to the civil penalty, the Federal Housing Finance Agency (FHFA) will pay $8.5 million to settle charges that it approved more than 200,000 mortgages in which JPMorgan helped make loans that could have caused the housing market to crash.
Jobs lost and homeownership damagedThe statement also said that the bank will make significant changes to its mortgage products to make them more competitive.
The agency has said that it wants to eliminate the subprime subprime mortgage product, which was a major contributor to the 2008 economic collapse.
Josie Joly, a JPMorgan spokeswoman, declined to comment.
The firm also said in a statement that it had agreed to work with the FHFA to “address the root causes of the market failure.”
The FHSA said it had been “deeply concerned” about the JPMorgan conduct, which it said was a “serious violation” of the law.
“The FHA is fully committed to protecting homeowners from mortgage fraud, and we are committed to ensuring that this kind of fraud does not occur again,” it said.
The FHSA said in January that it would be issuing more fines against large banks in connection with mortgage fraud.
It said it will also issue additional penalties against JPMorgan, Bank of America and Wells Fargo, and other banks in the future.
The company also will pay an $80 million civil fine to the government for misleading regulators about mortgage products.
The government said in May that it agreed to settle a lawsuit brought by two former JPMorgan employees.
The settlement was approved by a federal judge.
The Justice Department said in April that it was conducting a wide-ranging investigation into JPMorgan Chase’s mortgage products, including whether the bank played a role in the housing crisis and whether it lied to regulators about how its products affected the economy.