Big U.S. banks are making improvements in how they disclose information to their checking account customers, how much detail they give and also how they resolve disputes – but the efforts are not enough, according to a new Pew Charitable Trusts report unveiled Tuesday (May 12).
In its third annual report grading 45 of the largest U.S. retail banks, titled “Checks and Balances 2015 Update,” Pew found some levels of improvement from last year’s findings, yet still repeated its call for consumer protection initiatives. Pew developed a one-page disclosure form four years ago, and according to this year’s report, 28 of the 45 big banks in the study had adopted such a disclosure box. Another five banks got partial credit.
“I think the disclosures have definitely improved a lot,” Susan Weinstock, head of Pew’s consumer banking initiative, told American Banker in an interview published Tuesday.
“It’s like a food label,” Weinstock added. “The FDA mandates that every can of soup should have a food label. The CFPB should do the same.”
Pew is also pressing the CFPB to limit the size of overdraft fees and ban the reordering of transactions from high amount to low, a practice that can lead unwary customers to rack up charges, American Banker reported.
Among the key takeaways in the report was that 62 percent of large banks have adopted model summary boxes for disclosures and fees. But 58 percent of respondents levy extended overdraft fees for customers if they do not repay an overdraft within a certain number of days. The median overdraft fee charged by the big banks was $35 — a rate commensurate with earlier years.
“This product continues to be laden with terms that put consumers at risk,” Weinstock said. “And our data show that the market is not going to make this product safe.”
Ally Bank finished first in Pew’s rankings, adhering to all 18 of Pew’s practices that are endorsed. Conversely, E-Trade Bank had the lowest score in Pew’s rankings.