A new report shows that approximately 472k Chase customers are now unable to cover emergency expenses, even with a credit card.
A new report from JPMorgan Chase provides insights into how many Americans have the financial means to cover unexpected expenses.
An analysis of 5.9 million households with Chase bank accounts reveals that 8% of these households are entirely unable to pay for a $400 emergency expense, even by using credit cards.
This equates to a total of 472,000 households of the 5.9 million.
The report sheds light on how relatively minor and unanticipated expenses, such as car repairs or medical bills, can pose a significant challenge for many families.
This underscores the financial fragility that exists even among those who utilize major banking services.
Overall, JPMorgan’s analysis indicates that 67% of households have sufficient cash savings to cover a $400 emergency expense, while an additional 20% can do so using a combination of cash and discretionary income.
“Many households are still unable to cover such an expense, including 63% of the lowest-earning households and even 3% of the highest-earning household,” the bank said in its report.
“For the lowest-income households, only 25% can cover a $1,600 expense shock using cash or disposable income; short-term use of credit enables an additional 12% to cover the expense.”
JPMorgan’s sample data spans the years 2021 through 2023.
The bank reports that the proportions have remained stable since the start of 2022, despite the high inflation and interest rate environment.
“This pattern holds true even for larger $1,600 expense shocks: despite fewer households being able to cover these larger expenses, the ability to do so has been consistent throughout our sample period.
However, this situation could change as inflation, interest rates, and labor market dynamics continue to evolve.”
The bank’s sample comprises 5.9 million households, selected based on active checking accounts with a minimum of five non-transfer transactions per month and an annual take-home income of at least $12,000.
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Also Read: Massive Banks Are Now Accused of Cheating Customers Billions
Other Economy News Today
Massive banks are now accused of cheating customers billions of dollars in interest payments according to financial reports.
According to a new report by Financial Times, several major Wall Street banks, including Wells Fargo, Morgan Stanley, and Bank of America, are accused of defrauding customers out of billions of dollars in interest payments.
The U.S. Securities and Exchange Commission (SEC) is currently investigating these banks to determine whether they intentionally steered clients toward “cash sweep” accounts that provided little to no interest earnings, despite the availability of higher-yielding options.
This alleged practice by the banks would amount to bilking customers out of significant sums of interest income that they should have rightfully earned on their deposits and cash holdings.
The SEC’s probe is aimed at uncovering whether this was a deliberate strategy by the banks to boost their own profits at the expense of their clients.
The report in the Financial Times highlights the concerning allegations of widespread misconduct by some of the largest financial institutions on Wall Street.
If substantiated, this could represent a major scandal involving the potential exploitation of customers through the mismanagement of their cash accounts and interest earnings.
The SEC’s investigation will be crucial in determining the full scope and nature of these alleged practices, as well as any potential enforcement actions or penalties that may be levied against the implicated banks.
The revelations have emerged from new Quarterly filings with the SEC.
In those filings, Wells Fargo says it’s in “resolution talks” with the agency over the issue, Morgan Stanley says the agency began asking questions about it in April and Bank of America confirms it’s currently being scrutinized.
All three banks have declined to comment on the matter.
Other financial firms involved in lawsuits related to cash sweep accounts include LPL Financial and Ameriprise.
LPL Financial says it plans to “vigorously” defend itself against the allegations, while Ameriprise has not released a public statement on the matter.
Also Read: The US Treasury Direct is Now Freezing Customer Accounts
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