Pew asks new consumer bureau to clear up banks' checking account disclosures
August 03, 2011
The Pew Safe Checking project is asking the new Consumer Financial Protection Bureau to require banks to do a better job of revealing the fees they charge for a basic checking account.
The call for more transparency in terms, conditions and fees comes on the heels of a new Pew study that Americans of all political persuasions think banks should be more forthright with their customers, even if it means tighter federal regulations.
A report in April from the Pew Safe Checking in the Electronic Age Project found that the median length of a disclosure statement for a checking account is 111 pages. That report also found that overdraft charges are expected to cost consumers $38 billion in 2011--twice as much as in 2000, and an all-time high despite Congressional restrictions on how banks can levy overdraft fees.
Pew's new survey found that Democrats, Republicans, Independents and Republican Tea Party members all favor more transparency by banks. Even those who generally oppose government regulation think U.S. regulatory agencies can do a better job to make checking account rules more easily understood.
Here are some other findings from the study:
- 70 percent want banks to process transactions in chronological order, instead of the common practice of clearing the largest transactions first, which often leads to higher overdraft fees as smaller transactions are charged against an account.
- Nearly 80 percent think banks should give you a one-page summary about their checking accounts to make it easier to compare one account to another.
- 83 percent would like a summary of overdraft options to help them decide what is best for them.
The Consumer Financial Protection Bureau was created as part of financial reform laws passed in the wake of the collapse of the housing market. The bureau opened in July and doesn't have a director yet, but it is responsible for protecting consumers from fraud and providing an outlet for complaints about financial matters, from savings and money market accounts to mortgages and student loans.