Although it seems like every week banks are ratcheting up fees charged to customers with low account balances, the largest U.S. bank by assets is changing up the game.
Beginning July 22, JPMorgan Chase will no longer charge overdraft fees incurred by purchases that cost $5 or less, according to the bank's checking disclosure notice. The new policy will prevent customers from wracking up outsized fees for small purchases -- like a $34 overdraft fee for a $3 slice of pizza. [Hat tip: Bucks Blog]
Chase is not the only bank to let smaller charges fly under the overdraft fee radar. US Bank, which announced it was raising the price on fees for big-ticket items earlier this month, does not collect an overdraft fee for charges that are less than $10. SunTrust, which recently announced that it will also be upping a number of fees associated with its checking accounts, does not levy an overdraft fee on items that are less than $5.
Under Chase's current policy, overdrawn customers are charged $34 per overdraft, no matter the size of the purchase. Chase has a set maximum of three overdraft fees per day, or a total of $102.
Chase now stands out among the sea of banks that are increasing charges for everything from overdrafts to ATM withdrawals. Earlier this year, the bank lowered other fees, including the cost to transfer money from one account to another to cover a potential overdraft, and lowered the cost to stop a check payment.
On June 27, when Fifth Third increases its overdraft fees, the Cincinnati-based bank will win the award for most expensive single day overdraft fee. Customers will be charged $25 for the first overdraft of the year and $37 per subsequent transaction. Under the new policy, a customer could incur up to $370 in charges in one day.
Chase's game-changing move comes at the tail end of a few weeks of really bad PR for the financial institution. Jamie Dimon, JPMorgan Chase's CEO, has been in the limelight defending the bank's loss of anywhere from $3 billion to $8 billion from trading credit derivatives.
Earlier this year, JP Morgan Chase agreed to pay $110 million to settle a lawsuit alleging the bank charged customers excessive overdraft fees.
Check out the following list of bank fees compiled by 24/7 Wall Street:
Online Disclosures: 9 of 9 Information Available on Account Webpage: 3 of 9 Information Unavailable Online or at Branch: 0 of 9 Revenue: $21.4 billion Minneapolis-based U.S. Bancorp (NYSE: USB) is among the top three banks when it comes to disclosure transparency. All of the disclosures are available online. The bank places its minimum deposit to open an account and monthly fee information right on the account webpage, and it was one of only a handful of banks to place its information regarding the extended overdraft penalty fee online. Unlike many of the larger money-center banks on this list, U.S. Bank operates in only 25 states. The firm does not have the massive investment banking, M&A and trading operations that larger banks have. U.S. Bank has $341 billion in assets and is the fifth-largest commercial bank in America. The bank has substantial mortgage and credit card operations. Read more at 24/7 Wall St.
Online Disclosures: 9 of 9 Information Available on Account Webpage: 3 of 9 Information Unavailable Online or at Branch: 0 of 9 Revenue: $110.84 billion Large banks often gets a bad rap for not being upfront with customers about checking accounts. But Chase, the largest U.S. bank in terms of assets, has all of the disclosures available online, a few of them even available directly on the account holder's webpage. In March, the company also became one of only a few banks to adopt Pew's disclosure box, which places all the information in an easy-to-read schedule. JP Morgan has been considered the best-run bank in the United States since the credit crash of 2008. CEO Jamie Dimon was able to steer the firm's activity away from many of the derivative credit instruments that so badly damaged Bank of America and Citigroup. JP Morgan's management tarnished its reputation recently when it was forced to announce that it had lost at least $2 billion in trades done in its London office. Those losses are expected to rise. Read more at 24/7 Wall St.
Online Disclosures: 9 of 9 Information Available on Account Webpage: 5 of 9 Information Unavailable Online or at Branch: 0 of 9 Revenue: $115.37 billion Bank of America infuriated many customers last fall when it attempted to implement a $5 fee for using a debit card. It comes as a surprise then that the bank is the most transparent one out of the 12 banks in the survey. All the disclosure information Pew looked for is available online. In fact, Bank of America spelled out the extended overdraft penalty fee directly on the account webpage, the only institution to do so. Although Bank of America has not adopted the same schedule as Chase Bank, Weinstock said it has been receptive to Pew's recommendations. Bank of America has been considered the worst-run of the large banks. Its buyout of Merrill Lynch in late 2008 cost the bank billions of dollars in losses. It still uses the Merrill brand for much of its brokerage and personal financial operations. Bank of America also bought mortgage lending giant Countrywide Credit in early 2008. Losses from Countrywide's large prime-prime mortgage portfolio further damaged Bank of America's balance sheet. Read more at 24/7 Wall St.
Online Disclosures: 5 of 9 Information Available on Account Webpage: 3 of 9 Information Unavailable Online or at Branch: 1 of 9 Revenue: $18.53 billion Information about monthly fees and minimum deposits at Capital One are readily accessible on an account holder's webpage. But if customers want to find out about fees for nonsufficient funds, overdrafts and overdraft transfers, they will have to take a trip to the local branch. "The problem is it's very hard to comparison shop between bank branches," Weinstock said. Worse yet, information about the existence or the amount of the extended overdraft penalty fee is not available online or at a branch. Capital One specializes in a number of retail banking businesses, particularly mortgages, credit cards and auto loans. Capital One significantly expanded its online banking business when it bought ING DIRECT, USA from a large Dutch financial-services firm in February. The buyout cost Capital One $9 billion and added approximately $80 billion to its deposit base. Read more at 24/7 Wall St.
Online Disclosures:3 of 9 Information Available on Account Webpage: 3 of 9 Information Unavailable Online or at Branch: 0 of 9 Revenue: $10 billion Branch Banking and Trust, or BB&T as it is known to the public, stays true to its name -- at least to the branch part. While all the disclosures measured are available somewhere, six would require a visit to a brick-and-mortar location -- more than any other bank measured. In fact, none of the disclosures involving overdrafts are available online. The North Carolina-based bank is also one of only three banks -- with PNC and SunTrust -- that does not have its posting order placed online. BB&T specializes in wealth management, retirement planning, mortgages and insurance. It business and corporate banking operations are of only modest size compared to those of the large money center banks like Wells Fargo and Citigroup. The firm does most of its business through approximately 1,800 financial centers in North and South Carolina, Virginia, West Virginia, Kentucky, Georgia, Tennessee, Maryland, Florida, Alabama, Indiana, Texas and Washington, D.C. Read more at 24/7 Wall St.
Online Disclosures: 3 of 9 Information Available on Account Webpage: 2 of 9 Information Unavailable Online or at Branch: 4 of 9 Revenue: $94.80 billion (Entire HSBC) Getting checking account information from HSBC is incredibly difficult. While all other banks have most or all of the information available online or at a branch, four of the nine disclosures are not available for customers at HSBC. Even the minimum amount required to open an account is nowhere to be found. "We don't know if that means (the bank) doesn't charge these fees or not," Weinstock said. "But if they are free, let's put that out there." Two of the remaining five disclosures require a trip to the local branch, which is problematic because the London-based bank cut back on the number of branches in the United States last year. HSBC's U.S. operations are only a modest part of the parent corporation. Its largest divisions are in Mexico, Hong Kong and Europe. The company's corporate financial operations do business with large global companies and governments. HSBC has among the largest bond and equity trading operations in the world. Read more at 24/7 Wall St.
Clarification: The story has been revised to clarify that Fifth Third will have the highest potential overdraft charge that can be incurred in one day.