WASHINGTON, D.C. — SubPrime Auto Finance News learned Wednesday that JP Morgan Chase & Co. has settled some challenges raised by the Office of the Comptroller of the Currency over its auto finance credit tactics and credit tactics at two other business lines.

In working with the OCC, Chase agreed to a penalty of $2 million and also took action to reimburse customers almost $25 million.

More specifically, the OCC wrote in its statement Wednesday, "The Office of Comptroller of the Currency announced today that it has imposed a civil money penalty of $2 million against JPMorgan Chase Bank N.A. related to the marketing and sales of a credit protection product by Chase Auto Finance, a division of the bank, during January 2008 through May 2009.

"Chase Auto used written scripts together with oral high-pressure sales tactics that included statements which were materially false, deceptive or otherwise misleading in violation of the Federal Trade Commission Act. The bank, without admitting or denying any wrongdoing, consented to an order imposing a civil money penalty of $2 million based on the violations," the OCC continued.

"In addition and in consultation with the OCC, the bank initiated and completed a plan to take appropriate remedial actions to fully address and correct the violations of law and/or other deficient practices identified in Chase Auto and two other business lines, including distributing nearly $25 million to affected customers," according to the statement.

Mike Fusco, a spokesperson for Chase, told SubPrime Auto Finance News Wednesday, "We are pleased to have resolved this matter with the OCC. We have reimbursed affected customers and have revised our sales scripts and marketing materials for our payment protection products.

"Additionally, we've implemented and enhanced more extensive controls to ensure that we are treating our customers fairly," he said.

He identified the other two business lines impacted as credit card and home divisions.

Chase Auto Finance appears to be in the process of expanding its market presence to better serve dealer partners. Last week, the brand announced it has expanded its custom finance office in Des Moines, Iowa, to better meet the subprime financing needs of dealers in the Midwest area.

The new office at 6601 Westown Parkway, Suite 120, currently houses a team of nine underwriting, funding and collections professionals. 

The company plans to hire additional employees at the center over the next several years. 

Matt Reed, with more than 17 years of auto industry experience, is the center manager.

The Des Moines office will serve the Iowa and Nebraska markets, which were previously handled by the Chase Custom Finance Center in Minneapolis.

The company's auto finance division purchases retail installment contracts and originates loans across the continental United States as well as in Hawaii and Alaska. Its Custom Finance division serves more than 15,000 dealers throughout the country through 43 business centers.

For Midwest dealers interested in establishing a relationship or ramping up volume, Reed can be reached at (515) 222-3201.