Elizabeth Warren takes on JPMorgan CEO as bank collects nearly $1.5bn from overdraft fees in 2020

US Senator Elizabeth Warren sparred with JPMorgan Chase CEO Jamie Dimon over the company’s overdraft fees during the pandemic, kicking off two days of Senate committee hearings with executives from the nation’s biggest banks.

The former Democratic presidential candidate accused banks of dismissing guidance from regulators to waive customers’ overdraft fees during the public health crisis, as the unemployment rate surged to a pandemic high of at least 14 per cent in April 2020 and has struggled to fall back to pre-pandemic levels.

“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,” Senator Warren said.

She asked Mr Dimon and the CEOs of Wells Fargo, Goldman Sachs, Citigroup, Bank of America and Morgan Stanley to “raise your hand” if their banks extended the same overdraft protections to their customers that big banks received from the Federal Reserve, which also increased their access to credit during the pandemic.

“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 gave to you,” she said.

She singled out Mr Dimon as the “star of the overdraft show” and pointed to JPMorgan collecting “more than seven times as much money overdraft fees per account” than its competitors, she said.

“So, Mr Dimon, how much did JPMorgan collect in overdraft fees from their consumers in 2020?” she asked.

“I think your numbers are totally inaccurate, but we’ll have to sit down privately and go through that,” he replied.

“But these are public numbers,” said Senator Warren, as the two continued to speak over one another. “Do you know the number?”

Mr Dimon replied: “I don’t have the number in front of me.”

“It’s $1.46bn,”she said.

Wells Fargo collected $1.3bn in overdraft fees while Bank of America collected $1.1bn.

Mr Dimon defended the bank’s policies, arguing that customers could receive a waiver by request if they were financially constrained due to the Covid-19 crisis.

“I appreciate that you want to duck this question,” the senator said.

She asked Mr Dimon and other CEOs whether they should commit to refunding overdraft fees collected in 2020. He said “no.”

Democratic Senators Cory Booker and Sherrod Brown introduced a bill last year to temporarily block banks from issuing overdraft fees during the pandemic, but the measure languished in a GOP-dominated Congress.

Overdraft fees typically average $35 per charge, totalling roughly $8.8bn in 2020, according to an analysis from S&P Global. Fees collected by banks “increased dramatically” in the second half of the year by 64 per cent from a pre-Covid low, the report found.

“Overdraft giants” reported more in overdraft revenue than they did in net income that year – First National reported $100.3m in overdraft fees and $35.7m in net income, while Woodforest reported $142.4m in overdraft fees and $128.4m in net income, according to the report.