Warren Slams CEOs of the Nation's Largest Banks: You Got Breaks from the Government but Refused to Offer Just a Little Help to Struggling Families During the Pandemic
Video of Hearing Exchange (Youtube)
Washington, DC - In a Senate Banking, Housing, and Urban Affairs Committee hearing today, United States Senator Elizabeth Warren (D-Mass.) slammed the CEOs of four of the nation's largest banks -- JPMorgan, Wells Fargo & Co, Citi, and Bank of America -- for taking a collective $4 billion in overdraft fees from people during the pandemic. Senator Warren also urged the CEOs to refund the billions they took from struggling consumers during the pandemic: not agreed to do so.
As the pandemic swept across the country, bank regulators helped banks. They delayed compliance for important regulations and even allowed banks to avoid paying overdraft fees on their accounts at the Federal Reserve had a negative balance. Bank regulators also issued joint guidance that recommended banks waive overdraft fees for their own customers. While big banks got complete protection from overdraft fees at the Federal Reserve, none of the banks at today's hearing gave the same help to their customers by automatically waiving their overdraft fees.
This disproportionately hurt working people making less than $50,000 and Black and Latinx households while the banks made a $61.7 billion combined profit.
Senator Warren pointed out that JPMorgan collected more than seven times as much money in overdraft fees per account than its competitors. If JPMorgan had listened to the bank regulators by automatically waiving the nearly $1.5 billion in overdraft fees it charged consumers, the bank would have still made a profit of $27.6 billion in 2020.
Ultimately, none of the CEOs responded affirmatively to Senator Warren when asked if they would refund the money they took from struggling Americans. She highlighted that the big banks could have passed on some of the breaks each got from regulators to people who were actually struggling. Instead, the banks made a $61.7 billion profit during a recession.
Transcript: Annual Oversight of Wall Street Firms
Senate Committee on Banking, Housing, and Urban Affairs
Wednesday, May 26, 2021
Senator Warren: Thank you, Mr. Chairman.
As the pandemic swept across our nation, bank regulators worried about the health of our biggest banks. So the regulators were generous. They gave the banks all kinds of help. They delayed compliance for important regulations. They relaxed standards. They even allowed banks to avoid paying overdraft fees if their accounts at the Federal Reserve had a negative balance.
Now, when asked why they were being so generous to the banks, the regulators explained that the banks would, in turn, help their customers. So how exactly did that work out?
At the start of the pandemic, bank regulators issued joint guidance that recommended that banks waive overdraft fees for their own customers. In other words, if someone was laid off, for example, and bounced a check, the regulators recommended that the banks automatically waive the fees and let people get caught up without paying $35 every time they stumbled-the same way the bank could do at the Fed if it overdrew its account.
So let me ask the CEOs of the four banks-Citibank, Bank of America, Chase, and Wells Fargo-the four banks that collectively manage tens of millions of checking accounts for customers: while you automatically and at no cost got complete protection from overdraft fees at the Federal Reserve, could you please raise your hand if you gave the same automatic protection to your customers and automatically waived all their overdraft fees?
Okay. I'm not seeing anyone raise a hand, and that's because none of you gave the same help to your customers that the bank regulators extended to you-help that the bank regulators recommended that you give.
So let me focus in on this just a little bit here. Let me start with you, if I can, and ask the question about whether or not any of you, you didn't automatically weigh. I just want to take this on down. So, let's take a look at who actually paid these fees. According to Pew Charitable Trusts, it's disproportionately working people making less than $50,000 a year, African Americans, Hispanics-people who are struggling to get by.
And how much did they pay in overdraft fees? They paid a combined $4 billion dollars.
So, let me start with you. Mr. Dimon, you are the star of the Overdraft Show. Your bank, JPMorgan, collects more than 7 times as much money in overdraft fees per account than your competitors.
So Mr. Dimon, how much did JPMorgan collect in overdraft fees from their consumers in 2020?
Mr. Dimon: So I-- Your-- I think your numbers are totally inaccurate, but we'll have to sit down privately to go through that.
Senator Warren: So these are public numbers.
Mr. Dimon: And I also want to point out we did not overdraft our Fed account.
Senator Warren: Can you just answer my question?
Senator Warren: How much did JPMorgan collect?
Mr. Dimon: We did not overdraft to the Fed account and at any request when someone said they--
Senator Warren: So whenever. I'm sorry Mr. Dimon. That wasn't--
Mr. Dimon: They needed COVID relief. They got $120 million dollars in covid relief.
Senator Warren: Mr. Dimon, that was not the question.
Mr. Dimon: Upon request.
Senator Warren: Did you-- You had an automatic protection. So I'm asking: you were recommended, the regulators recommended you offer that same kind of protection to your customers.
Mr. Dimon: And we did.
Senator Warren: How much, in fact--
Mr. Dimon: And, and, and we did.
Senator Warren: --did JPMorgan collect in overdraft fees from their customers in 2020? Do you know the number?
Mr. Dimon: I don't have the number in front of me, but we actually upon-- upon request-- upon request we waived fees.
Senator Warren: Well, I actually have the number in front of me. It's $1.463 billion dollars. That's nearly $1.5 billion dollars that you collected from your customers.
Now do you know how much JPMorgan's profit would have been in 2020 if you had followed the recommendation of the regulators and waived overdraft fees to help struggling consumers? In other words, without that overdraft money, would your bank have been in financial trouble?
Mr. Dimon: We waived the fees for customers upon request if they were under stress because of COVID.
Senator Warren: You know. I appreciate that you want to duck this question. Do you know how much your profits would have been if you actually waived the fees as the regulators recommended?
Mr. Dimon: We waived the fees every time the customer asked due to COVID.
Senator Warren: The answer is your profits would have been $27.6 billion dollars. I did the math for you.
So here's the thing: you and your colleagues come in today to talk about how you stepped up and took care of customers during the pandemic, and it's a bunch of baloney. In fact, it's about $4 billion dollars worth of baloney. But you could fix that right now.
Mr. Dimon, will you commit right now to refund the $1.5 billion you took from consumers during the pandemic?
Mr. Dimon: No.
Senator Warren: Right now?
Mr. Dimon: No.
Senator Warren: No. That's right. Over the past year, you could have passed on the breaks that you got from the Fed to your customers, but you didn't do it. Everybody else here. Those other three bankers. Will any of you agree to refund the overdraft fees that you collected?
I didn't think so.
So no matter how you try to spin it, this past year has shown that corporate profits are more important to your bank than offering just a little help to struggling families-even when we are in the middle of a worldwide crisis.
Thank you, Mr. Chairman.
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