In a letter sent Friday to the president and CEO of JPMorgan Chase, the senators called a plan to raise fees on checking accounts "outrageous," claiming the $4.1 trillion-asset New York bank would be harming its 86 million customers.
Last month, Marianne Lake, the CEO of consumer and community banking at Chase Bank, warned that if regulations reduce overdraft and credit card late fees, the bank would have to raise fees on banking products such as checking accounts to offset the lost revenue. Lake acknowledged that JPMorgan would be imposing "broad, sweeping and significant" new costs for a host of free services — checking accounts, credit score trackers, and wealth management tools — once new regulations are finalized and go into effect.
"JPMorgan Chase should put a hold on any plans to levy additional charges on working Americans," the senators wrote in the letter. "JPMorgan Chase's potential imposition of new costs on its customers in response to legal and long-overdue efforts to limit abusive fees — at a time when the then bank is making record profits and funneling those profits straight into the pockets of its executives — is outrageous."
A spokeswoman for the bank declined to comment.
In January, the Consumer Financial Protection Bureau proposed dramatically cutting overdraft fees at the largest 175 banks by setting a price cap from $3 to $14 depending on the banks' costs and disclosures. Banks have said they would be forced to restrict credit, impose higher minimum balance requirements on bank accounts and limit the availability of free or low-cost checking accounts. Banks also have said they would challenge the proposal once it is finalized because competitors with less than $10 billion in assets would be exempt.
Warren and Van Hollen said in their letter to Dimon that JPMorgan collected $1.1 billion in overdraft fees last year, calling the bank "the industry leader when it comes to usurious overdraft fees."
Last year, JPMorgan earned a record $49.6 billion and announced a $30 billion buyback program, which the senators claimed amounted to a giveaway to wealthy investors.
"There is no justification whatsoever for imposing new fees on working families when your bank is hugely profitable," the letter stated. It listed five questions for the bank to answer by August 28.
The lawmakers asked how much Chase would collect in overdraft fees if a $3 cap were imposed by the CFPB. The senators also questioned whether a 2% cut in profits would justify higher fees and if the bank would make efforts to protect low- and middle-income consumers. The senators asked Dimon if he would reduce stock buybacks or executive pay instead of imposing new fees on its customers.
"Major banks like JPMorgan Chase use these overdraft fees that disproportionately hurt low-income Americans to inflate their already substantial earnings," the senators wrote.
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