Elizabeth Warren shames big bank CEOs for charging overdraft fees during the pandemic
Sen. Elizabeth Warren (D-MA) 071614 [YouTube]

Sen. Elizabeth Warren on Wednesday publicly shamed JPMorgan Chase CEO Jamie Dimon and three other big bank chief executives for raking in a collective $4 billion from overdraft fees during the coronavirus pandemic.

The Senate Committee on Banking, Housing, and Urban Affairs held a virtual hearing Wednesday that featured testimony from Dimon as well as Charles Scharf of Wells Fargo, David Solomon of Goldman Sachs, Jane Fraser of Citigroup, Brian Thomas Moynihan of Bank of America, and James Gorman of Morgan Stanley.

While questioning the Chase CEO, Warren (D-Mass.) also took aim at Wells Fargo, Citi, and Bank of America. She contrasted "generous" pandemic-era policies of bank regulators with those that banks had for their customers, as millions of people struggled with the economic consequences of the public health crisis.

Warren highlighted that as regulators delayed compliance for some rules and let banks to avoid paying overdraft fees for Federal Reserve accounts, they also recommended that banks waive overdraft fees for their customers.

Citing research from Pew Charitable Trusts, the senator noted that such fees disproportionately impact "working people making less than $50,000 a year, African Americans, Hispanics—people who are struggling to get by."

She told Dimon, "You are the star of the Overdraft Show. Your bank, JPMorgan, collects more than seven times as much money in overdraft fees per account than your competitors."

Dimon said that his bank's Fed account was never negative and that customers who needed relief from overdraft fees could submit a request. He also told Warren, "I think your numbers are totally inaccurate, but we'll have to sit down privately to go through that."

She responded that "these are public numbers." According to Warren, JPMorgan collected $1.463 billion dollars in overdraft fees from its customers in 2020.

"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?" Warren asked.

Dimon replied that "we waived the fees for customers upon request if they were under stress because of Covid."

Warren told him, "I appreciate that you want to duck this question," and asked again; he reiterate his previous answer.

"The answer is your profits would have been $27.6 billion dollars. I did the math for you," Warren said. "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," she continued. "Mr. Dimon, will you commit right now to refund the one-and-a-half billion dollars you took from consumers during the pandemic?"

His response was concise: "No."

Warren then put the question to the other CEOs: "Will any of you agree to refund the overdraft fees that you collected?"

In the face of silence, she said, "I didn't think so." The senator concluded by adding that "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."

Sens. Sherrod Brown (D-Ohio) and Cory Booker (D-N.J.) in March 2020 unveiled legislation that would temporarily ban bank overdraft fees for the duration of the pandemic—but it didn't go anywhere. The following month, the pair sent letters to 15 big bank CEOs, urging them to voluntarily enact such policies.

Brown, who chairs the U.S. Senate on Banking, Housing, and Urban Affairs, declared Wednesday that "Wall Street is on notice. The days of these banks and their allies controlling this committee are over."

"The CEOs that came before us are the most powerful economic actors in the country and the signals they send to other companies influence workers at companies all over the country, not just their own employees," Brown said. "They can't say they value their workers and then pledge to fight employees who want to form a union. They can't say they are focused on lending to small businesses and growing the economy while spending billions on stock buybacks."

"They can't say they put their customers first while charging them overdraft and late fees during a global pandemic," he continued. "And they can't say climate change is a threat to the entire economy, while dragging their feet when it comes to investing in new technology and the jobs of the future. We need an economy that reflects our values not Wall Street's. These CEOs have a lot of work to do."

After the hearing, Warren appeared on CNBC's "Closing Bell."

"To me," Warren explained, "it's partly about overdraft fees and who has to pay them, but it's partly about how you think about bank regulation. When you give banks help and say to them, 'as your regulator, I'm urging you to help your customers in a time of a pandemic,' and the banks don't do that, that tells me that the only way you're going to get these banks to act is by having aggressive, detailed regulation."