The Blubber

JPMorgan, $JPM, warns customers: prepare to pay for checking accounts

A top JPMorgan Chase executive has warned the bank's 86 million customers that their currently free checking accounts may soon carry a fee, according to a report.

Marianne Lake, CEO of consumer and community banking at JPMorgan Chase, attributed the potential fee to Washington regulators. These regulators have introduced an $8 cap on credit card late payment fees and a $3 cap for overdrafting bank accounts.

The Consumer Financial Protection Bureau passed these new caps in March, but a coalition of bank industry groups has sued to stop them before they become law.

“The changes will be broad, sweeping, and significant,” Lake told the Wall Street Journal. “The people who will be most impacted are the ones who can least afford to be, and access to credit will be harder to get.”

Lake expects other banks to pursue similar actions to recoup lost revenues if the new law is implemented.

“The banks say that their only option is to pass on their costs to customers, but that’s not true,” Dennis Kelleher, president of Better Markets, an economics think tank supporting the proposed bank regulations, told the Wall Street Journal. “Yet again, banks are dressing up their attempts to maximize their own profit under the guise of what’s good or bad for customers.”

However, banks argue that the new rules, combined with new capital requirements that require banks to hold more reserves, might impact their bottom lines. Some have started appeals, many in the North District of Texas.

Big banks will generally be able to manage the dent in profits better than smaller banks, according to Dan Goerlich, a consulting partner at PricewaterhouseCoopers who advises bank clients.

“Any change in regulations that would cap fees will create opportunities for institutions that are highly efficient,” Goerlich told the Wall Street Journal.