Earlier this year, the Pew Charitable Trusts published the results of a study of the nation’s 10 largest banks and found that the median length of checking account disclosures is a whopping 111 pages.
At the time, the nonprofit issued some recommendations for simplifying and streamlining crucial disclosures. But now the results of a new survey show that a clear majority of Americans, across the political spectrum, agree that better disclosures are needed. So Pew is pushing the new Consumer Financial Protection Bureau to rein in the profusion of paperwork on the grounds that it confuses customers and makes it harder for them to get information about account requirements and fees.
Pew’s survey shows that almost 75 percent of Americans say they’d welcome regulations aimed at more comprehensive and clear checking account disclosures. While survey respondents who identified as Democrats had the highest positive response, with 81 percent saying they supported disclosures, roughly two-thirds of Republicans and independents said the same thing. Even 62 percent of respondents who identified themselves as Tea Party supporters said they support increased disclosures.
“You can’t comparison-shop based on minimum balance needed, monthly fees and policies, because you can’t figure out what they are,” says Susan Weinstock, director of the Safe Checking in the Electronic Age project for Pew Charitable Trusts. She adds that Pew has proposed something similar to the “Schumer Box” that credit card companies are required to include in their marketing materials, which spells out major terms and conditions. Since the layout of the box and included information is the same from issuer to issuer, consumers can get a good comparative overview of what different cards offer and require.
Part of the disclosure, she says, would spell out consumers’ options if they overdraw their accounts. Last year the Fed forced banks to make some changes to the way they operated their overdraft programs — namely, they were told to stop the practice of automatically opting customers into the most expensive method for processing overdrafts. But Weinstock says there’s still a lot of confusion among consumers on this topic. (A study done by the Center for Responsible Lending came to the same conclusion.)
Even though the CFPB is currently operating without a director, Weinstock says Pew believes that the agency has the authority to address this issue, because it would build on already existing regulations. She says her team met with the staff of the CFPB as recently as last month, before it officially convened, to plead their case for better checking account disclosures. “We’re pushing them to look at the idea of better disclosures,” she says. “We think they can and should take action to have banks put this on their websites and make it available by hard copy at branches.”