Head Of Chase Bank Warns Customers: Era Of Free Checking Is Likely Over

Head Of Chase Bank Warns Customers: Era Of Free Checking Is Likely Over

The ‘problem-solving’ elites in Washington, DC, who advocate interventionist policies and overregulate the economy into oblivion, often cause unintended consequences. The latest example comes from the head of America’s largest retail bank, which has a warning for its 86 million customers: The era of free checking is likely over. 

Marianne Lake, head of Chase Bank, a division of JPMorgan Chase, was quoted by The Wall Street Journal as saying the bank is preparing to charge customers for now-free services, including checking accounts and wealth-management tools, if new rules pushed by politicians in Washington are enacted. These rules include capping overdrafts and late fees. 

“The changes will be broad, sweeping, and significant,” Lake said, adding, “The people who will be most impacted are the ones who can least afford to be, and access to credit will be harder to get.”

Agencies such as the Consumer Financial Protection Bureau have proposed an $8 cap on late credit card payment fees and a $3 cap on over-drafting fees. There are also talks of placing limitations on debit card fees and the amount banks can charge CashApp and Venmo for accessing and using their customers’ data. 

In March, the CFPB passed a rule capping credit card late fees, but a series of bank industry groups sued to stop it before it became law. The law is now pending an appeal before a judge.

Even though the credit card late fee cap is in the hands of a court, some credit card companies are already preparing to pass costs to their respective customer bases. 

“Chase has already sketched out plans to ratchet up interest rates and take a more conservative approach to underwriting credit card loans, according to an investor presentation,” according to WSJ. 

Dan Goerlich, a consulting partner at PricewaterhouseCoopers who advises banks, noted that mega banks will “make up for a dent in consumer banking revenues with profit from their wealth management and investment banking arms.” 

However, Goerlich warned, “Smaller and regional banks will struggle to make up for that.”

Limiting what a bank charges deadbeat customers for not paying bills on time is essentially a failed progressive policy that ends up forcing everyone else to pay more. 

WSJ pointed out, “It is possible some of the rules could be watered down, or not become law at all, if Donald Trump takes the White House in November.” 

Trump has not released a detailed economic plan but has advocated for deregulation to address what he describes as Joe Biden’s broken economy.

Voters might have found another reason to vote for Trump instead of the current president, whose plummeting mental acuity worsens by the day

Tyler Durden
Fri, 07/05/2024 – 15:00

https://www.zerohedge.com/markets/head-chase-bank-warns-customers-era-free-checking-likely-over