New York's attorney general has sued JPMorgan Chase, alleging that a unit now owned by the banking giant fraudulently sold mortgage-backed securities in the run-up to the 2008 financial crisis.
The civil lawsuit filed Monday by state Attorney General Eric Schneiderman is the first to be brought by the RMBS Working Group – the task force formed by President Obama in January to pursue alleged wrongdoing at the time of the financial crisis.
In simplified form: A bank takes deposits from savers, and pays them a low interest rate. Then it lends that money out to borrowers at a higher interest rate. The bank's profits come from the difference between the rates.
Along with saying, again, that his bank "let a lot of people down" when it lost more than $2 billion, JPMorgan Chase CEO Jamie Dimon added this prediction during his testimony before the Senate Banking Committee this morning: