The nation’s largest bank, Chase, threatens to charge fees on checking accounts if the government caps fees

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Chase Bank has warned the company’s 86 million customers that checking accounts may no longer be free in the future if the federal government enacts legislation to cap overdraft and late payment fees.

Chase is the largest consumer bank and one of the largest credit card issuers in the U.S. It is now planning to charge fees for services that were once free to cover the loss of revenue from fee caps.

Marianne Lake, CEO of Consumer & Community Banking, said: “Wall Street Journal” believes that if the regulations are passed, other banks will follow suit.

Under the new proposal, the cost of an overdraft could drop to just $3. Chase Bank currently charges a $34 overdraft fee for transactions that exceed your balance by more than $50, with up to three fees per day. That means the maximum amount you can currently be charged for an overdraft in a business day is $102.

The proposed rules are being led by the Consumer Financial Protection Bureau and would restrict banks from charging customers only the amount it would cost them to break even in the event of an overdraft. One version of the proposed rules would set an $8 limit on late payment fees on credit cards and a $3 limit on overdraft fees.

Lake said services that are currently free to bank customers — such as wealth management tools, credit score trackers and checking accounts — could become more expensive if the government introduces fee caps.

“The changes will be broad, radical and significant,” she said, noting that those least able to afford such services will feel the brunt of Chase’s decision to pass on the costs of regulation to consumers.

Lake warned that “we can expect the industry to make radical changes to the way it offers and prices products and services” if the legislation is passed.

She added that getting credit will become “significantly more expensive, and free checking accounts may be available only to the wealthiest Americans.”

Banks are expected to fight the regulations and could challenge any regulatory measures all the way to the Supreme Court, according to “Wall Street Journal”.