Massachusetts Democrat Elizabeth Warren has called Jamie Dimon the “star of the overdraft show” because of the billions of dollars JPMorgan Chase & Co. has made from those bank fees. She is now telling Dimon and two of his fellow Wall Street CEOs to stop.
The senator sent letters Wednesday to Dimon, Wells Fargo & Co.’s Charlie Scharf and Bank of America Corp.’s Brian Moynihan, urging them to follow the lead of some rivals and drop all overdraft fees. The letter was also signed by two other Democrats, Sen. Cory Booker of New Jersey and Representative Carolyn Maloney of New York.
“Capital One and Citigroup Inc. have moved to eliminate these predatory fees,” Warren wrote, according to copies of the letter seen by Bloomberg News. “Now is the time for the industry as a whole, and in particular the major institutions that collect these fees, to do the same and protect consumers.”
Earlier this year, Citigroup became the first of the largest US banks to say it would drop charges as politicians, attorneys general and consumer advocates criticize them for harming consumers. low income Bank of America and Wells have said they will stop non-sufficient funds fees and at least reduce overdraft fees, either by lowering fees or giving one-day grace periods, and JPMorgan says it has helped 2 million customers avoid the costs.
In a letter to Booker and four other senators in March, JPMorgan touted those changes, saying the overdraft was a matter of customer choice.
“At Chase, we know our customers want options,” the New York-based bank said in its letter. “We offer accounts that allow you to ‘overdraw’ (often without being charged) to complete a requested payment, as well as accounts that do not offer overdraft services and therefore do not incur overdraft fees.”
JPMorgan and Bank of America declined to comment on the lawmakers’ letter, and Wells Fargo had no immediate comment.
The Consumer Financial Protection Bureau found in December that 9% of consumers pay 10 or more overdraft fees a year, accounting for about 80% of that revenue for banks. The three banks Warren wrote to (JPMorgan, Bank of America and Wells Fargo) generated a combined $3.76 billion in overdraft fees last year alone, in an industry where overdraft and insufficient funds receipts totaled more than $15 billion. in 2019, according to the report.
Revenue from overdraft fees fell during the COVID-19 pandemic, as government stimulus checks helped shore up consumers’ bank accounts and widespread lockdowns curbed spending.
Warren’s letter, continuing a battle she’s been fighting for years, asked banks to contact her in mid-May with answers about how much they’ve charged customers for overdraft fees since making the changes, and what kind of limits do they have? instead.
“In recent months, as several major financial institutions have taken steps to eliminate or reduce overdraft fees, there has been a ‘race to the top’ in establishing more pro-consumer fee policies,” he wrote. “But not all banks were fully involved.”