Chase Bank’s CEO Marianne Lake has issued a warning to its 86 million customers, urging them to prepare for potential new fees on bank accounts. In an interview with The Wall Street Journal, Lake emphasized that the proposed regulations aim to limit overdraft and late fees, which significantly increase the daily operational costs for banks.
Lake mentioned that currently free services such as checking accounts and wealth management tools may soon come with fees. She stressed, “These changes will be widespread, comprehensive, and substantial.”
She noted that the most affected would be individuals who are least able to afford additional fees.
The Consumer Financial Protection Bureau (CFPB) is a government agency dedicated to ensuring fair treatment of people by banks, lenders, and other financial institutions. It recently proposed an $8 cap on late fees for credit card payments and a $3 cap on fees for overdraft behaviors on bank accounts.
Furthermore, The Wall Street Journal’s report also added that there are plans to limit debit card fees and charges for accessing customer data from software companies like Venmo and CashApp.
Regulatory authorities have long been restricting bank fees, which could lead to additional costs for customers. After the 2008 economic recession, bank customers also received similar warnings that their debit cards might incur additional fees. However, due to public outcry and resistance, these additional fees did not take effect.
However, banks now claim that the scope of the new regulations might force them to levy these fees.
Lake anticipates that if these rules are implemented, a range of free services like credit score trackers and financial planning tools may no longer remain free.
The Wall Street Journal cited a partner at PwC Consulting who said that while large banks may absorb the impact through their wealth management and investment banking divisions, smaller banks could struggle.
He also warned that the competitive environment for small, sporadic deposits could compel banks to maintain free services in order to retain customers.