Justice Dept. sees $13 billion JPMorgan deal as a template for future bank settlements
By Danielle Douglas and Sara Horwitz
The Justice Department plans to use its tentative $13 billion settlement with JPMorgan Chase as a blueprint for reaching similar deals with other banks in probes related to bad mortgages and the 2008 financial crisis, a law enforcement official familiar with the negotiations said Monday. If such an effort is successful, it could usher in an era of high-priced settlements throughout the banking industry. While other banks may not pay as much as $13 billion, Justice Department officials said it is not going to be cheap for firms to settle civil cases, especially since JPMorgan is not considered the worst actor of the financial crisis. “The industry is worried about the shift in mood from the more cooperative, lenient approach to enforcement actions to this much more aggressive and punitive one,” said Karen Shaw Petrou, managing partner of the Washington-based research firm Federal Financial Analytics. JPMorgan and Justice Department officials declined to comment on the status of the deal, which has yet to be finalized.