On the heels of Bank of America’s announcement that it will impose a monthly fee on debit card users, the Consumer Financial Protection Bureau (“CFPB”) has signaled that it will work toward increasing transparency regarding checking account fees and might require more simplified checking account disclosures. Raj Date, special advisor to the Secretary of the Treasury on the CFPB, recently issued a statement noting that “checking accounts often come with a wide variety of unexpected costs that can quickly add up for consumers.”
Bank of America is not the only financial institution that is imposing new fees or raising existing ones. Citibank recently announced that it will charge customers $20 per month if their combined midlevel Citibank accounts do not total $15,000 or more. In addition, Citibank will charge customers $15 per month if they do not maintain a minimum balance of $6,000 in their EZ Checking accounts. Wells Fargo and JPMorgan Chase are also imposing debit card fees on customers in some states. Each of these institutions also imposes fees on customers with basic accounts who do not maintain certain minimum balances.
The new fees have stirred controversy with some customers, who have threatened to close their accounts and move their money to local banks or credit unions. Congress has also taken note. U.S. Rep. Brad Miller (DNC) recently introduced “The Freedom and Mobility in Banking Act” to streamline the opening and closing of personal bank accounts. Rep. Miller stated, “As megabanks flirt with menus of new fees, an increasing number of Americans will want to switch banks.” In addition, five U.S. House Democrats have asked Attorney General Eric Holder to investigate whether the banks violated antitrust laws by colluding to raise fees.
According to Date, “Different banks give different names to the very same fee,” which could cause confusion, noting that “[i]deally, consumers would have a simple way to evaluate checking account costs.” Citing a recent poll showing that three-fourths of Americans with checking accounts want increased clarity and disclosure, Date noted that “[t]he CFPB has the ability to simplify checking account disclosures.” Doing so would permit consumers to compare fees between banks, according to Date, which “is good for consumers and good for competition.”