Industry Scan: B of A, JPM to Set Right Credit Reports

Bank of America pops up in Friday's news for several reasons, none of them flattering.

Over at the New York Times, a news article reveals Bank of America and JPMorgan Chase have agreed to scrape debts discharged in bankruptcy from consumers' credit reports within the next three months. The move comes in response to a set of lawsuits in Federal Bankruptcy Court that allege the banks, along with Citigroup and former GE financing arm Synchrony Financial, "effectively" hold "borrowers' credit reports hostage" in an attempt to collect on debt that's already been wiped out.

A separate opinion piece in the Times from columnist Gretchen Morgenson questions the distribution of Bank of America's $16.7 billion mortgage settlement. The bank is required to forgive or reduce borrowers' mortgage debt as part of the settlement and the amount of relief it provides is then deducted from the bank's total tab. There's just one problem: according to Morgenson, the bank is sending some borrowers notices that is forgiving debt that's already been discharged. This goes against the intent of the settlement, she says, since forgiveness is meant to go to borrowers in need of help — not those who've already found it.

Finally, the Wall Street Journal reports a third of shareholders voted against reelecting board member and corporate governance committee head Thomas May — a marked turn from the 98% "yes" votes he received a year ago. This is a sign of shareholders' continued dissatisfaction with the bank's decision to override a 2009 rule and appoint Brian Moynihan to the dual role of chairman and CEO, according to the paper.