No More Free Services: Bank Hints at Plan to Start Charging Customers for Their Accounts
- Multinational finance company JP Morgan Chase is set to impose new bank account charges for its over 86 million customers
- According to the United States' biggest retail bank, the decision is based on new regulations limiting overdraft and late fees
- If implemented, this will put an end to previously free services like checking accounts and wealth management tools
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 impose fees on customer accounts soon.
These forthcoming charges will affect approximately 86 million customers of the global financial service provider.
Source: UGC
The development comes months after Jamie Dimon, the CEO of JP Morgan, reiterated his view on Bitcoin, labelling it as a "public decentralized Ponzi scheme."
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 customer backlash.
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.
JP Morgan reveals Nigeria’s actual forex reserve
Meanwhile, Legit.ng had reported that JP Morgan Chase revealed that Nigeria’s net forex reserve had declined to around $3.7 billion.
The financial institution disclosed this in its latest report on Nigeria titled “Nigeria: Reform pause rather than fatigue."
The bank also noted that the lower-than-reported FX reserve resulted from larger currency swaps and borrowings against the FX reserve.
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However, it clarified that it arrived at the $3.7 billion by making some assumptions, which, if incorrect, would change the figure in its estimates.
Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
