Standing in front of his Springfield, Ill., home, Sen. Dick Durbin called on banks to publish simple, one-page descriptions of all the fees and terms of their checking accounts.
“It’s time for banks to treat customers fairly and disclose what they’re actually charging,” Durbin said, according to the State Journal-Register, Springfield’s local newspaper.
The proposal and press conference were a form of victory lap for Durbin, who became the banking industry’s enemy #1 this year for an amendment he authored that capped debit card swipe fees. A number of banks, including behemoth Bank of America, responded by blaming Durbin for their decision to charge customers $5 a month to make purchases with their debit cards.
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Consumer anger forced Bank of America to retreat from the new fee, and a number of other banks followed suit. That was an important win for consumers, but it opened the door for Bank of America, Wells Fargo and other large banks to find other, more secretive ways to increase fees, Durbin’s office said in a press release.
“Bank of America thought they could make me the villain, and it blew up in their face,” Durbin said during the press conference. “I’m ready for this battle.”
To head off new hidden fees, Durbin called on banks to create a standardized, one-page document detailing all the fees and terms of their checking accounts. Durbin’s model is a form created by the Pew Charitable Trusts. It details all the possible fees that banks commonly try to charge, including monthly fees, ATM and overdraft fees.
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Pew created the form after conducting a survey, which found that most consumers are “surprised” when the terms of their checking accounts are described to them in plain English. Most respondents, especially young adults ages 21-35, had not tried to read their bank disclosure forms, which they found to be impenetrable and confusing.
The average bank disclosure form currently runs to 111 pages, Pew found.
“Banks do not provide important policies and fee information in a concise and easy-to-understand format that allows customers to compare account terms and conditions among institutions,” according to the study.
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Image: straightedge217, via Flickr.com