Now checking accounts might need some regulations

Most consumers are surprised with the fee that they are charged on their checking accounts and getting information on checking accounts is virtually a painful exercise. Studies conducted recently show just how difficult it is to get proper information on the checking accounts.

There were over 250 types of online checking accounts that were analyzed by the Pew Charitable Trusts and 10 of the major banks in the US were part of the study. These banks account for over 60% of the deposit volumes. In the report titled ‘Hidden Risks – The case of safe and transparent checking accounts’ the findings revealed that the disclosures of these checking accounts ran into 111 pages. This was quite shocking as it was virtually impossible for anyone to read and understand it or obtain any of the cost information.

In yet another study, enquiries were conducted at 392 banks as well as credit union branches spread across 21 states and the online bank fees were reviewed in 12 others. In their report titled ‘Big Banks, Bigger Fees 2011: A National Survey of Bank Fees and Fee Disclosure Policies’ the observations made were as mentioned below:

Less than half which is around 38% of the branches complied with the request of fee schedules (as required by Truth In Savings Act), around 55% of branches did provide fee schedules after two or more requests, and nearly 23% of the branches surveyed simply refused to comply with the requests.

The PIRG received the following responses when they requested for the fee schedules on checking accounts:

• California – The fees were at the back in a binder and all taped up in each teller stand. It had to be taken out, copied and given to the researcher.
• Massachusetts – Fees – listed on wall.
• Georgia – Bank did not have a list and one staff member stated that the list was not with them but wanted to check to see if they can think of something just out of their heads.
• New York – Did not have copies, asked to come back the next day.

But the worst was yet to come for the researchers as nearly 22% of the banks gave the wrong or incomplete information.

As difficult as it was to get out any information on the checking accounts and related fees and costs, the banks were apparently doing a fine job of explaining the so-called ‘benefits’ of the expensive debit overdraft protection programs to their clients.