Senators Elizabeth Warren and Jack Reed are calling out seven major US banks for allegedly raking in massive profits while paying savers next to nothing in interest. The senators accuse Bank of America, Citibank, JPMorgan Chase, US Bank, PNC Bank, Truist, and Wells Fargo of prioritizing their own bottom line over their customers.
Record Profits, Low Savings Rates
In 2023, these seven banks collectively reported a staggering $1 trillion in profits. The senators argue this windfall comes from charging borrowers high interest rates while offering extremely low rates on savings accounts. They claim the difference between what the banks earn and what they pay savers is far greater than at smaller regional banks.
Broken Promises?
The senators point out that the CEOs of these banks previously testified before the Senate, promising to increase savings account interest rates. However, according to Warren and Reed, these promises have gone unfulfilled.
JPMorgan Chase in the Spotlight
Senator Warren and Reed specifically highlight JPMorgan Chase CEO Jamie Dimon. They note that while Chase quickly raised interest rates on loans like mortgages and credit cards, the interest rate on savings accounts remained at a paltry 0.01%, despite the bank earning significantly more on its own Federal Reserve balances.
Other Banks Under Fire
The senators similarly criticize Wells Fargo, Bank of America, and Truist for offering similarly low savings rates (0.01%), and PNC, Citi, and US Bank for rates of 0.02%, 0.03%, and 0.05% respectively, all while earning substantially more on their Federal Reserve accounts.
The Bottom Line
The senators accuse these banks of “profiteering,” essentially making huge profits at the expense of their customers. They argue that the banks should be sharing more of their record profits with savers by offering higher interest rates on savings accounts.
