Big banks fighting credit card late fee cap as they report record profits

Big banks charge as much as $41 on a single credit card late fee, not because they need to – JPMorgan Chase, Wells Fargo and Bank of America are all reporting record profits – but rather, to further line their pockets.

“Big banks’ own massive profit reports show they do not need to nickel and dime everyday families with excessive and hidden fees,” said Liz Zelnick, the director of the economic security and corporate power program at Accountable.US, a nonpartisan, 501(c)3 organization that shines a light on special interests that too often wield unchecked power and influence.

A new report from the government and financial watchdog spells out just how much big banks are profiting from credit card late fees.

JPMorgan Chase, year-to-date through September, had raked in over $3.4 billion from credit card late fees, adding to the staggering $5.2 billion the bank gained from those fees in 2022.

The haul in 2022 came in what JPMorgan Chase reported was a “somewhat surprisingly” “strong year,” the fifth straight year of record revenue alongside $37.7 billion in profits while spending over $16.6 billion to reward its shareholders through a combination of share buybacks and cash dividends.

JPMorgan Chase Chairman and CEO Jamie Dimon pocketed $34.8 million in total compensation.

Wells Fargo, year-to-date through September, had raked in over $3 billion in credit card late fees, after seeing more than $4.7 billion in revenue from these fees in 2022 – as Wells Fargo used $6 billion of its more than $13.2 billion in profit to reward its shareholders with stock buybacks and cash dividends in 2022.

The megabank also saw its net income climb 49 percent during the first nine months of 2023 to more than $15.6 billion.

As of Sept. 30, Wells Fargo had a remaining $29 billion remaining on its share buyback program.

Finally, to Bank of America, which year-to-date has made over $2.6 billion from its credit card late fees, after pocketing $4.2 billion from these fees in 2022.

In 2022, Bank of America saw $27.5 billion in profit and spent a total of $13.6 billion on its shareholders through a combination of stock buybacks and cash dividends.

In the first nine months of 2023, Bank of America has rewarded its shareholders with $10.6 billion as its net income has climbed 14 percent to $23.4 billion YoY.

You’re going to be shocked to read that these three banks are leading the charge to fight a proposed rule from the Consumer Financial Protection Bureau to lower costs for everyday Americans by capping credit card late fees at $8, which is a lot less than $41.

“The Biden administration’s work to lower costs for Americans by capping these fees is badly needed because megabanks have no intention of self-regulating their greedy behavior,” Zelnick said. “Meanwhile, many Republicans in Congress make excuses for junk fees from the same banks with so much extra profit that they’re able to reward a small group of wealthy investors with billions in new handouts.”