Chase Bank to refund unpopular credit card fee
NEW YORK -- The bank says it will refund a total of $3.3 million in fees and related finance charges to more than 300,000 cardholders. Chase, however, will still require these cardholders to pay a minimum of 5% of their monthly balance, rather than the 2% required before the policy took effect.
New York Attorney General Andrew Cuomo has urged Chase to do away with the fee and give consumers a refund. Cuomo, in a Monday statement, said he was pleased that Chase had "reconsidered its ill-advised, illegal decision."
Chase spokeswoman Stephanie Jacobson says the bank changed its policy because of "customer feedback" rather than Cuomo's demands.
Chase still faces a handful of class-action lawsuits related to its higher minimum payments.
Chase's fee was unusual because of its size and because the bank added it to borrowers' monthly balances, where it accrued interest. The policy targeted consumers with low promotional rates who carried a large balance for more than two years and made little progress paying it off, says Jacobson.
Other banks, including Citibank, Bank of America and Washington Mutual, now a part of Chase, have also raised credit card fees or interest rates this year.
The actions come as toxic assets have threatened banks' financial health, requiring an unprecedented government bailout to stimulate bank lending and consumer spending.
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