Just as most banks are increasing fees, JPMorgan Chase is moving in a different direction. In a letter sent to customers this week, the bank announced it is lowering a number of fees, including the cost of overdraft transfers and stop payments.
Chase's overdraft protection transfer fee--the charge for moving funds from one Chase account to another to cover an overdrawn account--will be $10, down from $12. Requesting a stop payment, which prevents a delivered check from being cashed, through a teller will cost customers $30, decreased from $34. If done on the phone or online, the charge for stop payments will be $25, lowered from $27. The new fees will be implemented on March 19.
But a few lowered checking fees doesn’t mean Chase isn't making money in other ways. The bank said it plans to focus on wealthier clients worth at least $100,000, according to a presentation made by JPMorgan Chase executives to investors two weeks ago. According to the bank, customers valued at less than $100,000--70 percent of its customer base--will be unprofitable due to new regulations that curb the amount of fees banks can charge, as reported by Bloomberg.
As the bank solicits higher-net worth clients, certain fees--like those related to overdrafts--might become a less significant source of revenue. Economic research firm Moebs Services found that about 10 percent of banking customers--who are mostly low-income--pay around 90 percent of overdraft fees, reported The New York Times.
The news about Chase’s lowered fees comes as other major banks are instituting new charges. Last week, Wells Fargo announced a $7 monthly checking fee in six states starting in May. Citibank increased its minimum balance to avoid a $20 fee for checking from $6,000 to $15,000 in December.
Bank of America confirmed earlier this month that it plans to charge customers monthly fees for its "Essentials" checking accounts, despite backlash against its attempted debit card transaction charges last fall. The bank has been experimenting with checking fees in Arizona, Georgia and Massachusetts.
The fee hikes are meant to compensate for revenue lost through recent banking regulations, including restrictions on how much banks can earn from debit-card swipes.