Last April, as the Earth hurtled face-first into a combination pandemic and global recession, the Federal Reserve Board announced it would generously waive overdraft fees for big banks while giving them increased access to credit. The board explained its magnanimity as a way “to support the flow of credit to households and businesses and to mitigate the disruptions from COVID-19.”
It was a lovely sentiment. The only problem, as Sen. Elizabeth Warren noted during a hearing with Wall Street banks on Wednesday, was that banks failed to extend the same courtesy to their customers that the Fed offered them.
Warren took particular issue with the bank JPMorgan Chase, which, she said, collects more than seven times the amount in overdraft fees as its competitors — a total that amounted to almost $1.5 billion dollars in the last year alone. If the bank had instead waived the fees last year, Warren said, it still would have generated a cool $27.6 billion in profit.
Longtime JPMorgan CEO Jamie Dimon disputed Warren’s figures, but did not offer a correction.
I would watch Elizabeth Warren pummel Jamie Dimon all day. pic.twitter.com/S1XPzMriZf
— Sawyer Hackett (@SawyerHackett) May 26, 2021
“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,” Warren said. “Will you commit right now to refund the $1.5 billion you took from consumers during the pandemic?”
“No,” said Dimon, who takes home $31.5 million annually, or roughly 900 times what the financial institution’s lowest-paid employee makes. (Dimon shrugged Wednesday when Ohio Sen. Sherrod Brown asked why he’s paid such an astronomical sum. “My compensation is set by the board,” Dimon said.)
A report published by ProPublica last year found that a JPMorgan Chase software glitch caused nearly 170,000 customers to incur overdraft fees by mistake — and the bank was not penalized by regulatory bodies.
It wasn’t the first time Warren and Dimon have exchanged barbs. Dimon once said of Warren, who conceived of the Consumer Financial Protection Bureau, “I don’t know if she fully understands the global banking system.”
Warren later shot back: “The problem is not that I don’t understand the global banking system. The problem for these guys is that I fully understand the system, and I understand how they make their money — and that’s what they don’t like about me.”