CONSUMERS should be aware of three major changes underway at banking giants including Chase, Bank of America, and Wells Fargo that are impacting their money.
As these financial institutions update their rules and regulations, Americans may be hit with hefty fees and see their valuables at risk, and on a more positive note, have expanded access to credit.
Chase, Bank of America, and Wells Fargo have three big changes underway[/caption]
Consumers should be aware as the banking giants switch-up their rules and regulations[/caption]
Chase, Bank of America, and Wells Fargo are three of the biggest commercial banks in the country, offering a number of crucial banking, investing, and financial services to consumers, small businesses, and large corporations.
These banking giants operate via extensive branch and ATM networks, as well as online and mobile platforms, serving millions of customers in the US and internationally.
Read on to learn more about three key changes in the works at these institutions that may be impacting your savings.
JUNK FEES
Banks charge overdraft fees when a customer spends more money than they have in their checking account, with these fees averaging around $35 per transaction.
Congress voted this spring to overturn a rule that would have limited overdraft fees to $5 at financial institutions with over $10 billion in assets, such as Bank of America and Chase, starting in October.
These banks or credit unions would have been subject to the new rule unless they were able to justify a higher fee or treat it as a credit product under the Truth in Lending Act.
Trump signed the resolution into law in May, retracting the Consumer Financial Protection Bureau (CFPB) rule established during Biden’s term that aimed to limit overdraft fees.
Quick Q&A: The Overdraft Fee Reversal
- What just changed? New legislation has struck down a rule that would have limited bank overdraft fees to $5 per transaction.
- Why does it matter? Banks can continue charging fees that often average $35. The CFPB estimates this costs consumers $5 billion annually compared to the proposed cap.
- Who supported this change? The reversal was backed by banking industry groups and Congressional Republicans, who argued the original rule restricted financial services.
The former president called these fees “exploitative,” finalizing the rule capping these charges in December, part of the White House’s campaign to reduce the so-called junk fees Americans are hit with on everyday purchases.
“The Biden administration’s ill-conceived rule imposing new price controls on overdraft services… harmed the very consumers the CFPB is supposed to protect,” said Republican Senator Tim Scott of South Carolina in a statement.
“The rule would have reduced access to credit and important financial services and resulted in more unbanked Americans.”
On the other hand, the CFPB supported the rule, arguing that it would have saved consumers $5 billion annually in overdraft fees, or roughly $225 per household that typically experiences the charges.
KEY SAFETY FEATURE
Safe deposit boxes are locked containers in bank vaults or other financial institutions that people rent to protect their valuable items like jewelry and important documents from risks such as home break ins.
A number of major banks are scaling back on this service or even eliminating it entirely due to high maintenance costs and reduced consumer demand.
For example, Chase is currently working to phase out all of its safe deposit boxes.
In 2021, Chase stopped offering the service to new clients only, with existing ones not necessarily impacted, a Chase representative told The U.S. Sun.
However, the bank is now completely eliminating its safety deposit boxes, even for existing customers.
How to contact your bank
WITH bank scams running rampant, it is important to know how to reach out to your bank without risking fraud.
There is of course the foolproof method of going to your bank in person, but you are likely going to be directed to a customer care phone line.
In order to ensure that you are contacting the bank, make sure to use a phone number given to you by the representative or off of the bank’s website.
Some banks also have online helplines that can securely connect you with a representative.
Conversely, if you think the bank is reaching out to you with an account issue – make sure to verify the concern by calling a bank contact that you know is legitimate.
Scammers commonly mascarade as bank representatives to steal information from frightened customers.
“As our customers continue to look to us for advice and financial solutions, we have decided to phase out all remaining safe deposit boxes across the country,” said the representative.
“Doing so allows our bankers to spend more time helping clients.”
The spokesperson did not share an exact timeline for the phase out or how long clients will be given to retrieve their valuables.
Aside from Chase, huge banks like Capital One, PNC, Santander Bank, and Citizens Bank have also cut back on offering safe deposit boxes.
BANK BUFFER CUTS
Back in June, US regulators unveiled plans to slash a key capital requirement for the nation’s biggest banks, marking the most dramatic rollback of rules since the financial crisis in 2008.
If passed, it would change the enhanced supplementary leverage ratio (eSLR), a rule that requires the largest US banks to hold additional minimum capital based on their size.
The largest lenders in the country, such as JPMorgan Chase, Bank of America, Goldman Sachs Group, and Morgan Stanley, currently have to retain their eSLR ratios at 5%.
The regulators’ proposal would reduce the requirement by 1.4%, or roughly $13 billion.
The goal of tweaking the capital ratio is to make it easier for banks to lend more freely.
With less capital locked up, major banks could expand credit, such as by offering more mortgages, auto loans, and small business lending.
There is also a possibility that interest rates on loans would ease slightly if these banks were to pass along the flexibility provided by the new proposal.
The Federal Reserve governors approved the proposal in June, with regulators currently accepting feedback.
As these three changes roll out, Chase customers are being urged to “double check” their credit card statements after a mysterious $4.19 surcharge.
Meanwhile, Chase, Wells Fargo, and Bank of America are closing branches across the US as more than 105 shut in a month, leaving customers stranded.
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