In the News
NEWSDAY: New York lawmakers to JPMorgan Chase: Refund overdraft fees
An open letter from two congresswomen calls for JPMorgan Chase & Co. to refund millions of dollars in overdraft fees collected during the pandemic.
The letter released Wednesday by Reps. Kathleen M. Rice and Carolyn B. Maloney was addressed to chief executive Jamie Dimon. It accuses Chase, the No. 1 U.S. bank by assets, of charging "staggering" overdraft fees on Long Island and elsewhere during the pandemic.
"Last year, JPMorgan Chase (JPM) collected nearly $1.5 billion in overdraft fees, which is more than any other bank," said the letter that was released to the media.
Long Islanders alone were charged nearly $70 million in overdraft fees last year by banks overall, according to the letter.
Chase, with 140 locations on Long Island, accounted for "nearly 40% of the total fees charged to consumers in the region during the pandemic," the letter said.
The congresswomen said in the letter that the bank charged overdraft fees despite March 2020 guidance from bank regulators "recommending that they work with customers and waive overdraft fees during the COVID-19 pandemic."
A spokeswoman for Chase said that as of early Wednesday afternoon Dimon had not received the letter from Rice (D-Garden City) and Maloney (D-Manhattan).
The company, however, took issue with several of the assertions in a copy provided by Newsday.
The spokeswoman said in an email that regulators urged banks to waive fees and defer payments for customers who were impacted by the pandemic and Chase complied.
Chase waived $430 million in overdraft fees nationwide for customers "who said they were affected by COVID, with no questions asked," she said.
Overdraft fees can be levied when account holders spend more money than is available in their account.
The lawmakers' letter said overdraft fees often are paid by consumers who carry low monthly balances and fall disproportionately on "low-income consumers and communities of color."
The congresswomen said they plan to introduce legislation "that would crack down on unfair overdraft fees for all financial institutions."
The letter comes on the heels of a report released last week that took the banking industry to task for charging an estimated $1.6 billion in a variety of fees to New Yorkers since the pandemic erupted in March 2020.
That report, released by the NYS Community Equity Agenda, said that New York City residents paid an estimated $1.27 billion in fees, including nearly $754 million in overdraft fees alone.
Responding to the letter from Maloney and Rice, the Chase spokeswoman said that in recent years the bank had introduced an "overdraft-free, low-cost bank account."
The bank also stopped charging overdraft fees on debit card transactions that are authorized with a sufficient balance, but settled days later on a balance that is overdrawn, she said.By Ken Schachter