Sunday, October 20, 2013

Another Viewpoint On Chase Wire Transfer Limitations From Forbes


Halah Touryalai
Halah Touryalai, Forbes Staff
I stalk Wall Street. Stopping short of phone hacking, of course.
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10/17/2013 @ 1:46PM |19,621 views

No, JPM Isn't Banning International Wire Transfers, No Limits On Withdrawals Either

Is JPMorgan Chase JPM +0.17% trying to control customers’ money by preventing wire transfers and limiting withdrawals?
NEW YORK, NY - MAY 14:  A man uses his cell ph...That’s the fear after a couple of reports from Drudge and Zero Hedge noted a change in the bank’s withdrawal and wire transfer policies for small business checking accounts.
Chase says the fear is unfounded.
The reports are referring to a new $50,000 limit on monthly cash activity being imposed on small business checking accounts and a ban on outgoing international wire transfers on those accounts.
Small business customers received letters from the bank stating that the changes are effective November 17. “These changes will help us more effectively manage the risks involved with these types of transactions,” the letter states.
One report dubs Chase’s new rules “a war on cash and a war on small business and individuals” and says the new rules will lead to “a total cashless society that destroys all privacy and allows them to fine and fee the general population into serfdom.” Scary stuff.
The fear is that banks, and indirectly, the federal government have too much control over individuals’ money which sits in the form of deposits. Limiting withdrawals and keeping people from sending money overseas feels like capital control–a government attempt to prevent money from flowing out of the country. Think Iceland and Cyprus.
JPM says that’s not what’s happening here.
First, a quick visit to the bank’s business bankingwebsite shows that international transfers are still available–you just have to pay up for them.
The bank’s basic business account, Chase Total Business Checking, does not allow outgoing international wire transfers (it does allow them to come in) and cash activity is indeed limited to $50,000 per month. Cash activity means withdrawals and deposits. The account has a $10 monthly fee which is waived with a $1,500 minimum daily balance.
Need to withdraw or deposit more than $50k? You can but you’ll have to pay more in monthly fees to do so.
Upgrade to Chase’s Performance Business Checking and there’s no cash activity limit. Plus, you get two domestic wires transfers per month at no charge and international wires are available for an additional fee. Of course, there’s a $20 monthly fee that’s waived if you can maintain $50,000 balance.
Upgrade even higher to the Chase Platinum Business Checking and get four outgoing wires per month at no charge and reduced pricing on additional wires. Again, no cash activity limit here but the Premium account has a whopping $95 monthly fee that is waived if deposit balances are $100,000 or more.
But let’s get back to that basic business account. Chase says you can still exceed the $50,000 cash activity limit but do it four times in a rolling calendar year and you’ll get automatically upgraded to the next level account.
So, no, there is no cash activity limit in the Performance Business and Platinum level accounts but you’ll have to maintain higher balances to avoid the larger monthly fees.
It looks like theses changes are more about Chase looking to generate more revenue from fees than an attempt to control capital.

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