JP Morgan Chase & Co wrote off $45.9 billion of consumer credit card debt out of the goodness of its corporate heart. Well, sort of. The company did abandon lawsuits pursuing $45.9 billion of debt collection in New Jersey, New York, California, Florida, and Illinois, according to the Wall Street Journal, but cited 'paperwork' problems that included incomplete documentation and incorrect information. According to one NY state judge who dismissed 150 of the credit recovery lawsuits, paperwork submitted by the bank appeared to be robo-signed -- apparently robo-signing isn't limited to mortgages.
As of March 2011, total US credit card debt is about $780.18 billion, the Federal Reserve reported, on about 610 million credit cards. Fitch Ratings noted that as of January 2011, about 3.2% are in 60-day default. So, writing off $45.9 billion out of $780.18 billion is just under 6%.
The good news is that consumers now have a $45.9 billion windfall to spend (although it is the proverbial drop in a bucket comparerd to the $2.43 trillion in total US consumer debt). The bad news is that the new US Consumer Financial Protection Bureau now has something more to investigate.
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