November 7, 2011
While recent reforms have helped bring transparency to the system of debit card swipe fees, more has to be done in order to stop hidden fees and make sure consumers understand what they are getting when it comes to banking services, U.S. Senators Dick Durbin (D-IL) said today. Durbin called on Illinois’ financial institutions to voluntarily adopt a bank account fee disclosure form designed to make checking account terms and fees transparent and easy to understand.
Today, Durbin sent letters to the Illinois Bankers Association, the Illinois Credit Union League, and the Community Bankers Association of Illinois asking them to voluntarily join him in this effort to keep consumers informed about the fees associated with their checking accounts.
“I write to ask that you encourage your member institutions to provide their customers with a standardized, concise and consumer-friendly disclosure form listing the fees and key terms associated with checking accounts,” Durbin wrote. “Not only is being honest with customers about fees the right thing to do, it is also the smart thing to do in the current business environment. 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. Your member institutions can prove their value to current customers and win new business by satisfying this consumer demand for fair and honest treatment.”
Following the sensible decision by Bank of America, Wells Fargo and other banking giants to roll back or cancel planned debit card usage fees, consumers are now at risk from new, hidden fees being issued in their place. The Pew Charitable Trust has already created a clear and simple form for financial institutions to adopt. A copy of that form is attached. Two of the nation’s largest credit unions, Pentagon Federal Credit Union and the North Carolina State Employees’ Credit Union, have already announced that that they are voluntarily adopting the Pew form.
“Transparency and competition are the two pillars of a strong free market economy. Those are the rules that Main Street American businesses live by, but for years, big banks have tried to play by a different set of rules,” Durbin said. “But American consumers deserve to be treated fairly. Today I’m calling on all of Illinois’ financial institutions to adopt a one-page, easy-to-read model disclosure listing the fees and key terms for their checking accounts. Giving consumers information clear, upfront and accurate information about the fees that they will be charged will allow consumers to shop around and make sound financial decisions.”
Last week, Durbin was joined by Senator Jack Reed (D-RI) in sending a letter to Raj Date, Acting Director of the Consumer Financial Protection Bureau, asking the consumer watchdog to quickly require financial institutions to post on their websites a standardized, concise and consumer-friendly disclosure form that lists the fees and key terms associated with checking accounts.
“In recent weeks, American consumers have made clear their desire for honest information about banking fees. Simply put, consumers have had enough of banks that try to sneak fees past them that are hidden in fine print or imposed with no notice at all,” the Senators wrote. “While we recognize that the CFPB is still in its formative stages and that it has many important tasks currently underway, we urge you to prioritize this matter and to use your regulatory authority to quickly ensure transparency for checking account fees.”
– Pew Charitable Trusts’ Model Fee Disclosure Form (Download PDF)
– Letter to Illinois Bankers Association, Illinois Credit Union League and Community Bankers Association of Illinois (Download PDF)
– Letter to Acting Director of the Consumer Financial Protection Bureau Raj Date (Download PDF)