Concern as bank plans to charge customers for previously free services

2 months ago 30

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

JP Morgan Chase Bank has announced plans to start imposing fees on customer accounts soon.

These forthcoming charges will affect approximately 86 million customers.

This development comes months after Jamie Dimon, the CEO of JP Morgan, reiterated his view on Bitcoin, labeling it as a "public decentralized Ponzi scheme."

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Decision based on new regulation

According to Fortune, Marianne Lake, CEO of consumer and community banking at JPMorgan, said the decision is driven by new regulatory rules limiting overdraft and late fees.

As a result, Chase will transfer these additional costs to its customers, ending the availability of free services like checking accounts and wealth management tools.

Lake also anticipates that other banks will implement similar measures.

Lake said:

“It is not practical for many of the services to be free if we won’t be able to draw from those profit pools.”

It would be recalled that JP Morgan Chase experienced a rise in second-quarter profits, even though expenses increased slightly due to provisions for bad loans, reflecting the heightened financial strain on lower-income customers.

The possibility of introducing fees for previously free services is not a new concern.

Over ten years ago, numerous banks proposed adding service fees to debit cards due to regulatory changes, but most refrained, fearing backlash from customers.

This situation might repeat itself, especially as consumers grapple with inflation and higher living costs, though the outcome remains uncertain.

The new regulations would limit credit card late fees to $8 and overdraft charges to $3.

In addition, new capital requirements would compel banks to hold larger reserves for mortgages and credit card loans, potentially affecting the availability of consumer loans, according to bank warnings.

Source: Legit.ng

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