Maloney, Rice Call on JPMorgan Chase to Return Overdraft Fees Charged During Pandemic

Jun 16, 2021
Press Release
JPM Chase ignored federal recommendation that financial institutions waive overdraft fees during the COVID-19 public health emergency

WASHINGTON – Today, Congresswomen Carolyn B. Maloney (NY-12) and Kathleen Rice (NY-04) were joined by Representatives Gregory Meeks (NY-05) and Tom Suozzi (NY-03) in urging JPMorgan Chase & Co. (JPM) Chairman and Chief Executive Officer Jamie Dimon to refund overdraft fees that JPM charged to consumers during the COVID-19 pandemic and to stop charging these predatory fees going forward. 

 

In their letter to Dimon, the Representatives state, “[d]uring the pandemic, the largest banks in the United States charged billions of dollars in overdraft fees at a time when millions of Americans were struggling financially. Last year, JPMorgan Chase (JPM) collected nearly $1.5 billion in overdraft fees, which is more than any other bank. Recent reporting has also estimated that banks in New York received over $1.6 billion in fees from consumers state-wide since March 2020.”

 

They went on to explain, “[a]s you know, New York was one of the hardest hit states by the COVID-19 pandemic. This included our districts on Long Island and in New York City. We are very concerned by a recent analysis of overdraft fees that revealed Long Island and New York City were also the top two regions hardest hit by these fees in the state.”

 

Last month, Congresswoman Maloney announced during a House Financial Services Committee her intent to reintroduce her Overdraft Protection Act to crack down on unfair, predatory overdraft fees.

 

The full text of the letter sent by Reps. Maloney, Rice, Meeks, and Suozzi to Dimon can be found below and here:  

 

Dear Mr. Dimon,  

  

We write to express deep concern regarding the staggering amount of overdraft fees that JPMorgan Chase charged to consumers in New York and on Long Island during the COVID-19 pandemic.  

  

During the pandemic, the largest banks in the United States charged billions of dollars in overdraft fees at a time when millions of Americans were struggling financially. Last year, JPMorgan Chase (JPM) collected nearly $1.5 billion in overdraft fees, which is more than any other bank.1 Recent reporting has also estimated that banks in New York received over $1.6 billion in fees from consumers state-wide since March 2020.2   

  

As you know, New York was one of the hardest hit states by the COVID-19 pandemic. This included our districts on Long Island and in New York City. We are very concerned by a recent analysis of overdraft fees that revealed Long Island and New York City were also the top two regions hardest hit by these fees in the state. On Long Island, data indicates that banks charged nearly $70 million in overdraft fees. JPM operates one-hundred and forty locations on Long Island, and estimates show that the bank was responsible for nearly forty percent of the total fees charged to consumers in the region during the pandemic.  

  

In March 2020, the federal banking regulators issued guidance to financial institutions, recommending that they work with customers and waive overdraft fees during the COVID-19 pandemic.3 Subsequently, in April 2020, the Federal Reserve announced that it would waive overdraft fees for financial institutions while giving them increased access to credit.4 While banks were able to take advantage of this waiver, the majority of consumers were not afforded the same opportunity by the financial institutions that serve them.   

  

During the worst months of the pandemic, overdraft fees were shouldered by the most vulnerable consumers. The overwhelming majority of overdraft fees are paid by consumers who tend to carry low balances and have relatively low monthly deposits.5 These fees also cause disproportionate harm to low-income consumers and communities of color. It is deeply troubling that financial institutions, including our nation’s largest banks, profited off fees charged to those struggling the most as the COVID-19 economic crisis left many families in severe financial distress.   

  

Therefore, we urge you to refund the overdraft fees JPM charged to consumers during the COVID-19 pandemic and to change JPM’s overdraft practices to stop charging these predatory fees in the future. We also intend to introduce legislation, sponsored by Rep. Maloney, that would crack down on unfair overdraft fees for all financial institutions and would establish fair and transparent practices for overdraft coverage programs.  

  

Thank you for your consideration.  

 

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