Five of the Top 12 Biggest Banks Adopt Pew's Consumer-Friendly Summary of Checking Terms & Fees Pew Commends Bank of America and Others for Taking Recommended Action
WASHINGTON, Aug. 29, 2012 /PRNewswire/ -- Bank of America is among the latest banks to announce they will voluntarily adopt Pew's disclosure summary for checking accounts. With these additions, five of the top 12 banks in America – representing over one-quarter (27 percent) of total deposit volume in the country – have adopted Pew's recommendation.
With the goal of making checking account terms and fees more transparent and easier for consumers to understand, The Pew Charitable Trusts created a short and concise model disclosure form as a guide for financial institutions to implement. Webster Bank of Waterbury, Conn., the Cape Cod Five Cents Savings Bank of Harwich Port, Mass., and Fifth Third Bank of Cincinnati, Ohio, also recently introduced this simple disclosure to their customers.
"With the addition of Bank of America, five of the top 12 banks are demonstrating they understand the importance of being transparent with consumers," said Susan Weinstock, director of Pew's Safe Checking in the Electronic Age Project. "Now, millions more Americans can obtain essential financial information in an easy-to-understand format. We urge other financial institutions to follow suit."
Currently, most financial institutions do not summarize key information in a simple, user-friendly way, making it cumbersome for consumers to find important policies and fees. In fact, Pew's latest research, Still Risky: An Update on the Safety and Transparency of Checking Accounts, found disclosure documents among the nation's 12 largest banks have a median length of 69 pages. A single, standardized form, such as Pew's model disclosure box, as a preface to the larger document, allows customers to comparison shop and determine which checking account best meets their needs.
"Our customers want clear and easily accessible information about their accounts so they can make the choices that are right for them," said Susan Faulkner, Bank of America Consumer and Small Business Products Executive. "We listened to customers and made enhancements that help make it easier for them to understand and control their finances. Our commitment to clarity is not new, but we continue to look for ways to improve our customers' experience."
Pew welcomes these reforms to bank disclosures as the Consumer Financial Protection Bureau (CFPB) begins to study the impact of key banking practices on consumers. Pew urges the CFPB to enact the following reforms by requiring financial institutions to:
- summarize information about checking account terms and fees in a concise, uniform format;
- provide account holders with clear, comprehensive terms and pricing information for all available overdraft options;
- make overdraft penalty fees reasonable and proportional to the financial institution's costs in providing the overdraft loan; and
- post deposits and withdrawals in a fully disclosed, objective, and neutral manner that does not maximize overdraft fees.
Citibank, TD Bank, Chase, Capital One, Illinois' Town and Country Bank, Illinois' Inland Bank, University of Illinois Employees Credit Union, Tennessee's Eastman Credit Union, North Carolina State Employees' Credit Union, and Pentagon Federal Credit Union all voluntarily adopted Pew's model disclosure in the past year.
The Safe Checking in the Electronic Age Project aims to restore transparency, fairness, responsibility, and free market principles to one of the most common consumer financial products – the checking account.
The Pew Charitable Trusts is a nonprofit organization that applies a rigorous, analytical approach to improve public policy, inform the public, and stimulate civic life.
SOURCE The Pew Charitable Trusts