Consumers call for end to checking account mystery fees
August 15, 2011
Do you have trouble understanding the terms of your checking account?
A recent poll by the Pew Charitable Trust suggests that a majority of Americans struggle with understanding the fees and conditions associated with their checking accounts, and would support new rules requiring more concise disclosure of those terms.
The results raise new questions about whether people know what they are paying for checking accounts, and whether last year's Dodd-Frank banking regulations went far enough. Perhaps the most remarkable thing about the poll results was the extent to which the call for clearer bank disclosure cut across political party lines.
Common ground on checking accounts
It seems that in these divisive times, one of the few things that Democrats, Republicans, independents, and Tea Partiers all agree on is the call for more clarity in checking account disclosures.
When asked whether they support reforms that would require a one-page summary of checking account terms, a majority of respondents with each of those political affiliations said yes. 81 percent of Democrats, 66 percent of Republicans, 65 percent of independents, and 62 percent of Tea Partiers went along with the proposal.
Besides favoring more concise disclosure, a majority of poll respondents also supported limits on bank overdraft fees, and rules on transactions processing that would prevent high-to-low prioritization, which can maximize the overdraft fees charged to a customer.
Checking account regulation in context
The poll results are especially interesting in today's political context. Bank lobbyists and some Republicans are working persistently to roll back many of last year's Dodd-Frank reforms. Their argument is that those reforms went too far; the Pew poll suggests that many Americans think they didn't go far enough.
In fairness to the banks, perhaps the companion questions that should have been asked about proposed new rules on checking accounts include whether people would be willing to pay higher fees in exchange for more regulation, and/or whether they would accept reduced availability of services in a more highly regulated banking environment.
There's an even more fundamental question raised by all of this: are checking account fees that hard to understand? Tell us what you think.