In a letter to JPMorgan Chase CEO Jamie Dimon sent Thursday, Democratic lawmakers are calling on the bank to rethink imposing new fees on its 80 million retail customers, including potentially hiking checking account fees on tens of millions of them.
Sens. Elizabeth Warren (D-MA) and Chris Van Hollen (D-MD) expressed concerns over recent comments by Marianne Lake, Chase’s CEO of consumer and community banking, who said the bank would consider increasing checking account fees to make up for the lost revenue related to a proposed cap on overdraft fees.
In an interview with the Wall Street Journal last month, Lake said that the new rules proposed by the Consumer Financial Protection Bureau (CFPB) would make banking more expensive for consumers, especially for low-income customers, because banks would be forced to impose new fees on services that are currently free to make up the lost revenue. Speaking with investors earlier this year, Lake said the changing regulatory environment could mean that “free checking may only be attainable for the most affluent Americans.”
Lake did not say how much the checking account fees might be or what accounts they would apply to in the WSJ interview. Chase declined to comment on the letter.
The fee-for-checking plan isn’t sitting well with Warren and Van Hollen, who sit on the Banking, Housing, & Urban Affairs subcommittee on financial institutions and consumer protection.
“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,” the senators’ letter, obtained by Fortune, reads. “JPMorgan Chase should put a hold on any plans to levy additional charges on working Americans.”
Warren and Van Hollen are now asking Dimon and JPMorgan Chase to answer questions related to the overdraft fees the bank collects, what new fees it plans to impose on customers, and how it plans to protect low- and middle-income consumers.
JPMorgan Chase collected $1.1 billion in overdraft fees in 2023, the most of any U.S. bank. Still, Warren’s letter notes that if the bank hadn’t collected any, its profits would be reduced by just 2%, and questioned whether that cut would “justify” imposing new fees on customers. The senators suggest other avenues for JPM to make up some of the loss.
“Will JPMorgan Chase reduce its stock buybacks instead of imposing new fees on its customers?” the letter asks. “Will JPMorgan Chase reduce executive pay instead of imposing new fees on its customers?”
The CFPB—which Warren established—has proposed capping overdraft fees to as low as $3, which the agency estimates will save consumers at least $3.5 billion each year. Currently, Chase charges a $34 overdraft fee per transaction that overdraws an account by more than $50 (up to three per day).
And checking accounts at Chase can currently come with a monthly fee attached, but it is often easy to skirt if a customer meets certain requirements, like maintaining a direct deposit into the account.
Lauren Saunders, associate director of the National Consumer Law Center, previously told Fortune that customers should “take their business elsewhere” if Chase ups the checking account fees.
There are plenty of banks, including online-only institutions like Ally, that offer fee-free accounts, as well as much smaller overdraft fees than Chase (if they charge the fees at all).
“Chase is more reliant on overdraft fees than other banks and so they’re looking to squeeze consumers in another way,” Saunders said. “Hopefully other banks who have made more significant changes to their overdraft practices can see a sustainable way to have bank accounts without big monthly fees.”
