Chase warns of adoption of new federal rules

JPMorgan Chase is warning that banking customers may soon have to pay for many of the services they now receive for free.

Proposed federal rules limiting insufficient funds and overdraft fees could have a “profound” effect on ordinary Americans, the banking giant says.

What do you need to know

• Bank customers may soon have to pay for many of the services they now receive for free, according to JPMorgan Chase
• In January, the Consumer Financial Protection Bureau proposed rules aimed at eliminating so-called wasteful fees that the agency says cost Americans billions of dollars each year.
• The proposed rules would cap credit card late payment fees at $8 and overdraft fees at $3.
• If the rules are adopted, credit will become more expensive and free checking would be achievable only by the wealthiest Americans, the bank said.

“The industry is facing a barrage of regulatory changes and potential legislative changes,” Marianne Lake, CEO of Consumer and Community Banking at JPMorgan Chase, said in May during the bank’s investor day.

In January, the Consumer Financial Protection Bureau proposed rules aimed at eliminating so-called junk fees that the agency says cost Americans billions of dollars each year. One rule would reduce the overdraft fees that banks charge consumers from $35 to $3. According to the agency, about 23 million U.S. households pay overdraft fees annually. The rule change would save those consumers about $150 a year.

The CFPB also proposed banning insufficient funds fees on transactions that were “declined without significant discernible delay after the consumer initiated the transaction,” including those involving debit cards, ATMs and some peer-to-peer payment apps. The new rule classifies such fees as abusive practices under the Consumer Financial Protection Act.

Credit card late payment fees may also be capped at $8.

Lake said the proposed rules have not been adequately researched and will affect consumers “who can least afford them.”

If the rules are adopted, she said, “it is reasonable to expect the industry to make radical changes in the way products and services are offered and priced.”

Credit will become “much more expensive and free checking accounts may only be accessible to the wealthiest Americans,” she said.

Chase, the consumer and commercial banking arm of JPMorgan Chase, has about 80 million consumer customers and 6 million small businesses in the United States.

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