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Major consumer bank Chase suggests rising costs for consumers on everyday banking services
Major consumer bank Chase suggests rising costs for consumers on everyday banking services
Marianne Lake, Head of Chase Banka division of JPMorgan Chase & Co. (NYSE:JPM), issued a warning to its 86 million customers: prepare for possible new charges on your bank accounts.
Lake noted that proposed regulations aimed at limiting overdrafts and late fees will lead to significant increases in the costs of everyday banking services.
Read too: US banks raise dividends after successful Fed stress test.
Chase, the nation’s largest consumer bank and one of the largest credit card issuers, plans to pass the costs of these stricter regulations on to its customers.
Lake noted that currently free services, such as checking accounts and wealth management tools, may soon incur fees. “The changes will be broad, sweeping and significant,” she stressed, noting that those most affected will be those individuals who can least afford the additional expenses.
The proposed regulations, led by the Consumer Financial Protection Bureau, include an $8 cap on credit card late payment fees and a $3 cap on overdraft fees.
Additionally, the Wall Street Journal report he adds There are plans to limit debit card fees and charges for software companies like Venmo and CashApp to access customer data.
New capital rules could also make lending harder for banks by requiring them to hold more reserves for mortgages and credit card loans.
Some consumer advocates argue that this scenario reflects the post-financial crisis era, when banks threatened to impose fees after regulatory limits but refrained mainly due to consumer backlash.
However, banks now say the scope of the new regulations could force them to implement these fees.
Lake predicts that the range of free services, such as credit score trackers and financial planning tools, may not remain free if the rules are enforced.
She highlighted how previous regulations on debit card fees had already increased costs for consumers and predicts a similar outcome with the new regulations.
Quoting a consulting partner in PricewaterhouseCoopersThe WSJ report adds that while large banks may be able to absorb the impact through their wealth management and investment banking divisions, smaller banks may struggle.
He also warned that the competitive environment for retail deposits could force banks to keep services free to retain customers.
Disclaimer: This content was produced in part with the help of AI tools and was reviewed and published by Benzinga editors.
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