As interest rates climbed, major banks charged borrowers more for mortgages and car loans but never increased payments to savers, two U.S. senators said in a letter to seven chief executives. Tell legislators they will.

In March 2022, the Federal Reserve began raising the federal funds rate, and banks followed suit, raising interest rates on mortgages, auto loans, and credit cards. But lawmakers said those increases are not consistent with high interest rates on savings accounts at banks including Bank of America, Citigroup, JPMorgan Chase, PNC Bank, Truist, U.S. Bank and Wells Fargo.

“This strategy—charging borrowers more, paying savers a small fee, and pocketing the interest paid by the Fed—enabled U.S. banks to earn record profits of $1 trillion, with JPMorgan Chase alone Achieve record profits of $49.6 billion in 2023.” The letters were written by Senators Elizabeth Warren (D-Mass.) and Jack Reed (D-Rhode Island). At the same time, "savers have struggled to keep up with inflation," they added.

JPMorgan CEO Jamie Dimon and peers from six other financial institutions testified before the Senate Banking Committee in September 2022 that their respective banks expected to raise interest rates for depositors, albeit at a slower pace. Lawmakers said that while the interest rate on JPMorgan's accounts with the Federal Reserve rose from 3.15% to 4.65%, JPMorgan clients would still earn 0.01% on their savings.

“These banks went before the U.S. Congress promising that they would meaningfully pass on higher savings rates to customers after raising loan costs to increase profits. Families across the country are struggling with inflation—these CEOs need True to his word, don't double dip at the expense of your customers' savings, Warren told CBS News in an emailed statement.

"Experts refer to large banks' current net interest income as a 'Goldilocks situation,' in which banks benefit from higher interest rates from the Fed and keep deposit rates low," Warren and Reed noted in the letter. ." The letter calls on CEOs to explain which portion is interest income. Part of their pay was based on the bank's "profiteering on interest rates over the past two years".

Wells Fargo declined to comment, and the other six banks did not respond to requests for comment.