Senators Take Aim at Bank Accounts' Fine Print
That's way too much fine print, say Sens. Dick Durbin (D-Ill.) and Jack Reed (D-R.I.). Last week, the two called on all banks to make those disclosures just one page long.
They offered as an example a one-page disclosure that Pew designed. On Monday, Durbin pressed banks in Illinois to adopt the new disclosure box.
"Consumers have demonstrated that they will no longer stay with banks and credit unions that disrespect them by failing to charge fees in an upfront and fair manner," Durbin wrote in a letter to the financial institutions, reported The Hill.
The cost of not reading and understanding those disclosures adds up to big costs for bank customers. A 2009 study of 917 consumers found that households paid a median of $43 a month in credit card and checking account fees, including credit card interest, ATM and overdraft fees.
The new proposed disclosure format outlines all the basic checking account terms and conditions -- including interest rates, ATM fees, overdraft penalties and account closing fees -- in clear terms, using a uniform reporting style across all financial institutions.
The senators also asked the new Consumer Financial Protection Bureau to lend a hand on enforcement, and require banks and credit unions to post this disclosure on their websites, the Los Angeles Times reported.
Two large credit unions are already on board -- the Pentagon Federal Credit Union and North Carolina State Employees Credit Union -- the Washington Times reported. The Consumer Bankers Association is also supporting fee disclosure simplification.