Capitalizing on the consumer unrest over debit card fees, two Senators push for banks to use a simpler checking account fee disclosure form.
Last week, U.S. Senators Dick Durbin (D-IL) and Jack Read (D-RI) have issued a statement that calls all U.S. financial institutions to voluntarily adopt a one-page fee disclosure form for checking accounts.
It comes after Bank of America®, Chase, Wells Fargo, SunTrust, and Regions Bank decided to not charge for using debit cards to make purchases. Big banks planned to impose the new fee to counteract the revenue loss from new debit card swipe fees rules, which were part of a legislation proposed by Senator Durbin.
The industry pullback was the result of customer anguish, Occupy Wall Street protests, and the threat of Bank Transfer Day.
In anticipation of banks introducing new, hidden fees to offset debit card fee plans, the two lawmakers aim to take advantage of the momentum already in place and convince the financial industry to maintain transparency.
However, financial institutions are only being asked by the Senators to adopt such a disclosure policy on their own.
The Senators have also sent a letter to Raj Date, the acting director of the newly formed Consumer Financial Protection Bureau, to requesting the agency to act quickly in making it a law for banks to post a standardized, consumer-friendly disclosure form.
In May, Senator Charles Schumer (D-NY) proposed a new legislation that would require banks to simplify fee disclosures for checking accounts in the same way that the Schumer box is used with credit card terms and conditions.
According to a Spring 2011 report by the Pew Health Group, the median length of checking account disclosures found at the 10 largest banks was a whopping 111 pages.
The group also designed a model fee disclosure form where account fees, terms, conditions, and overdraft options are clearly laid out on a single page. The model form has received the support from Senators Durbin, Reed, and Schumer.