Simpler Checking Disclosures Remove Confusion, Eliminate Hidden Fees
The Financial Brand
October 1, 2012
An analysis by the Pew Charitable Trusts concluded that financial institutions do not summarize policies and fee information in a uniform, concise, and easy-to-understand format for consumers. The study looked at the 12 largest banks and the 12 largest credit unions and a total of 274 different checking accounts. The median length of bank checking account disclosure statements is a staggering 69 pages, and 31 pages for credit unions. Pew says that variations in fee names and disclosure designs make it difficult for consumers to compare options. Bank mergers also can combine account policies, resulting in fees and terms added to fee schedules and account agreements that do not apply to new accounts. Pew found that the median number of additional service fees charged by banks was 26. Four of the 12 banks studied did not disclose the size of overdraft penalty fees on their checking account home page or on the pages that described specific accounts. Two banks -- Fifth Third and Town & Country -- combined disclosures for multiple checking accounts into one document. While it may be more convenient to work with a single document for all accounts, a multi-page and multi-account disclosure can still be cumbersome to navigate. Pew has developed a standardized fee disclosure form, which Sens. Dick Durbin and Jack Reed hope to make into law. They also have sent a letter to the Consumer Financial Protection Bureau, requesting that banks be required to post simpler disclosures on their Web sites.
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