Following last week’s cancellation of Bank of America’s planned $5 monthly debit card fee, a few Democratic senators today called on all financial institutions to be more transparent, making it easier for customers to read the fine print.
Sens. Dick Durbin, D-Ill., and Jack Reed, D-R.I., called on national financial institutions to voluntarily adopt and post publicly for each bank account a clear ”fee disclosure box” – an easy-to-read form so that people can avoid, or at least know about, fine-print fees like those cancelled by Bank of America.
“We want to inform and empower consumers all across America,” Durbin said.
According to the Pew Charitable Trusts, nine in 10 Americans have checking accounts, making it the most widely used financial product. And yet, Pew found in October 2010 that the average checking account disclosure document from the 10 largest banks in the United States was 1,100 pages.
That is something that senators want to change.
As proposed by the senators today, there would be a single, consistent form that all banks and financial institutions could use to lay out more clearly fees and key terms associated with their checking accounts.
“This is an extraordinarily important document in its simplicity and the fact that it gives the consumers and banking customers all across America the basic banking information you need to know to make a choice,” Durbin said. “So we are reaching out to consumer financial protection to ask them to make this a standard across the banking industry of America.”
Both Durbin and Reed stressed the importance of having informed financial consumers.
“Empower the consumers. Give them knowledge and they will protect themselves and make the market stronger and better for all,” Reed said.
As of today, two of the three largest credit unions, Pentagon Federal Credit Union and the North Carolina State Employees Credit Union, have posted the disclosure form on their websites.
Although Durbin and Reed would like to see banks use the form voluntarily, they have sent a letter to Raj Date, the acting director of the Consumer Financial Protection Bureau (CFPD), asking that it require financial institutions to post the disclosure box on their websites.
Similar to the push by the White House recently, the senators today also once again pushed for the confirmation of Richard Cordray to head the new bureau.
“It would function more effectively if it had a confirmed director like Richard Cordray, who is superbly qualified,” Reed said. “That’s who we need to run this organization. The faster he’s in place the better off we’ll all be.”