JPMorgan Chase Bank (JPM) is contemplating a major change that will put extra strain on customers’ wallets in response to a recent crackdown by the U.S. government.
The bank, which has roughly 86 million customers, is reportedly planning to charge customers for a plethora of services, that have historically been free, such as having checking accounts or access to wealth management tools, according to a recent report from the Wall Street Journal.
Related: U.S. government’s crackdown on bank overdraft fees just got a bit more serious
“The changes will be broad, sweeping and significant,” said Chase CEO of Consumer and Community Banking Marianne Lake, while speaking to the Journal. “The people who will be most impacted are the ones who can least afford to be, and access to credit will be harder to get.”
The move from Chase comes after the government announced last year that it aims to cap the amount banks can charge customers overdraft fees, which currently exceed $30 at multiple banks. Chase currently charges customers $34 if their account is overdrawn by over $50 at the end of the day.
“For too long, some banks have charged exorbitant overdraft fees—sometimes $30 or more—that often hit the most vulnerable Americans the hardest, all while banks pad their bottom lines,” said President Joe Biden in a statement. “Banks call it a service—I call it exploitation.
In January, the Consumer Financial Protection Bureau proposed a rule that would only allow banks to charge overdraft fees that are “in line with their costs or accordance with an established benchmark.” The CFPB’s proposed benchmarks include $3, $6, $7, or $14, which would save families about $3.5 billion every year if passed.
The CFPB also announced in March that it finalized a rule to cap the typical credit card late fee from $32 to $8. This move drew a lawsuit from banking groups that argued that the rule hinders cardholder accountability for late payments.
Lake said in the Journal’s report that “it is not practical for many of the services to be free” if banks are losing profits from those areas, and expects other banks to also adopt the changes Chase is planning to make.
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Chase recently revealed a boost in its profits in its first-quarter earnings report for 2024. During the first quarter, the bank had a net income of $13.4 billion, a 6% increase from what it reported during the same period last year. Its net revenue from banking & wealth management services was $10.3 billion, which is a 3% increase from the first quarter in 2023.
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