Banks may undergo increased government oversight as Senator Schumer calls for direct and simple account fee disclosures on checking accounts.On May 1, U.S. Senator Charles Schumer (D-NY) said he will be introducing legislation that requires banks to simplify fee disclosures for checking accounts, similar to the disclosure currently seem in credit card applications.
The Schumer Box is the display layout that credit card applicants often see when they check the card’s terms and disclosures. Enacted in 1988, legislation by Schumer required card issuers to clearly present interest rates, annual fees, and transaction fees.
Schumer wants information on checking account fees be disclosed in the same manner.
“Consumers have a right to know what they are signing up for, before they get hit with surprise fees,” said Schumer. “A disclosure box, in simple and easy-to-understand language will allow consumers to make better choices on where they decide to bank and force these financial institutions to provide more competitive checking account offerings.”
A recent study by the Pew Health Group revealed that customers had to dive through an exorbitant number of pages of checking accounts disclosures that were cluttered with financial and legal jargon.
Checking account disclosures at the 10 largest U.S. banks were found be an average of 111 pages long – noted as being twice as lengthy as the popular Shakespeare classic Romeo and Juliet.
“It’s absurd to require banking customers to sift through a tomb of highly technical legalese to unmask dozens upon dozens of banking fees,” said Schumer in response to the study. “If bank aren’t willing to provide clear, easy-to-read, up front information on the fees that come along with the checking accounts they offer, then we will federally require they do so.”