- The four major Wall Street banks collected a combined $4 billion in overdraft fees during the pandemic.
- Sen. Warren said Chase was “the star of the overdraft show,” charging customers nearly $1.5 billion.
- Warren asked the four banks’ CEOs if they would refund the fees. All said no.
- See more stories on Insider’s business page.
Senator Elizabeth Warren singled out JPMorgan CEO Jamie Dimon during a banking committee hearing, grilling him over Chase’s decision to continue collecting nearly $1.5 billion in overdraft charges from customers during the pandemic.
Joining Dimon were the CEOs of Citibank, Bank of America, and Wells Fargo, which took in a combined $4 billion in fees from checking customers who had no money in their accounts during the pandemic, against the recommendations of bank regulators.
At the start of the pandemic, Warren explained, the bank regulators told financial institutions that they would not be charged a fee if their accounts at the Federal Reserve were overdrawn. The regulators also recommended the banks extend the same automatic protection to their customers.
Senator Elizabeth Warren asked the CEOs to raise their hands if they had followed that guidance.
—Elizabeth Warren (@SenWarren) May 26, 2021
“I’m not seeing anyone raise a hand, and that’s because none of you gave the same help to your customers that the bank regulators extended to you — help that the regulators recommended that you give,” Warren said.
Instead, the four leading Wall Street banks, which handle tens of millions of retail checking accounts, charged customers a combined $4 billion in fees during the pandemic when their balances hit zero.
According to the Pew Charitable Trusts, those customers were more likely to be African American or Hispanic, or be earning less than $50,000 per year. Figures from the Consumer Financial Protection Bureau show that just 8% of account holders are responsible for three-quarters of overdraft fees.
Singling out Jamie Dimon of JPMorgan, whom she called “the star of the overdraft show,” Warren asked if waiving the nearly $1.5 billion it collected in overdraft fees would have put the bank into financial trouble.
“We waived the fees every time a customer asked because of Covid,” Dimon replied.
“Your profits would have been $27.6 billion,” Warren said. “I did the math for you.”
“Mr. Dimon, will you commit right now to refund the $1.5 billion you took from consumers during the pandemic?” she continued.
“No,” he said.
The other three executives also declined Warren’s request.
“Last year, when customers said they were struggling, we waived fees on over 1 million deposit accounts, including overdraft fees – no questions asked,” Chase spokesperson Amy Bonitatibus said in a statement to Insider.
A previous study found Chase charges more than average for overdraft fees, generating more than $35 per account, compared with Citi, which charges less than $5 per account, according to Aaron Klein, a senior fellow at the Brookings Institution.
“Overdraft is an expensive fee they charge only on those people who run out of money that goes straight to short-term profits,” Klein told the New York Times in April.
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