New York Democratic Members of Congress Push JPMorgan to Refund Overdraft Fees Collected During COVID-19
Earlier this month, Democrats representing New York in the House of Representatives sent a letter to Jamie Dimon, JPMorgan Chase CEO and Chairman, urging the bank to refund the $1.5 billion it collected in overdraft fees throughout the pandemic back to its customers.
“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,” they wrote. “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.”
The letter was signed by Representatives Carolyn B. Maloney, Kathleen Rice, Gregory Meeks, and Tom Suozzi.
“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,” it reads.
The lawmakers asked JPMorgan to also change its overdraft policies and stop charging them in the future, noting that the fees typically hit the most vulnerable populations. Those with low balances, low monthly deposits, low incomes, and communities of color usually suffer from overdraft charges.
Additionally, Senator Elizabeth Warren (D-Mass.) asked Dimon to return overdraft fees collected during the pandemic at a Senate Banking Committee hearing in May. Dimon refused, and Warren later tweeted that Dimon was “the star of the overdraft show.”
Other large banks also collected mass amounts in overdrafts throughout the course of the pandemic. Bank of America made $1.1 billion and Wells Fargo collected $1.3 billion from the fees. Since the Great Recession, collective overdraft fees have steadily risen, peaking at $11 billion in 2019, nearly 5 percent of total bank revenue.
Karen Webster, founder of PYMNTS.com, wrote that the overdraft issue shows that “we can’t have it both ways… selectively targeting some for providing and monetizing services that consumers want and use, without considering if those services are suddenly taken away, regulated out of existence or made too costly for service providers to support.”