WASHINGTON — If Sens. Dick Durbin and Jack Reed get their way, banks will soon be required to adopt a uniform one-page form for checking account fees.
In a letter Thursday to the Consumer Financial Protection Bureau, the two Democratic senators endorsed a form developed recently by the Pew Charitable Trusts, which lays out basic terms and conditions for checking accounts. Durbin and Reed want CFPB to require banks to post the form on their websites.
"This disclosure form lays out comprehensive information on fees and terms in a simple, easy-to-read format," the letter states. "If this disclosure form were adopted by CFPB to apply to financial institutions nationwide, it would make it easier for consumers to comparison-shop across financial institutions and find the deal that best suits them."
At a Capitol Hill press conference, the two senators argued that markets work better when customers are well-informed.
"The better you make the information, the better you make the market for everyone," Reed said.
The Democratic senators were joined by Susan Weinstock, who developed the form for the Pew Charitable Trusts. She said that the largest U.S. banks make it hard for customers who are looking to open an account online to understand the terms of their checking accounts.
"One hundred and eleven pages — that's the median disclosure length from the 10 largest banks in the United States," Weinstock said, referring to online disclosures.
The Pew Charitable Trust has been working with CFPB on the issue of checking account disclosures, according to Weinstock. She also noted that Raj Date, who is serving as the temporary head of CFPB, recently said that he wants to make it easier for consumers to understand the cost of their checking accounts.
"The CFPB has the ability to simplify checking account disclosures — an idea that some consumer groups and some banks have already been developing," Date said in an Oct. 5 written statement. "Making the costs transparent is good for consumers and good for competition. It allows consumers to compare the checking account options from large banks, community banks, and credit unions and pick the one that works best for them."
Durbin and Reed said at Thursday's press conference that they have not been in contact with either the American Bankers Association or the Consumer Bankers Association about disclosure of checking account fees.
But Richard Hunt, president of the Consumer Bankers Association, released a statement afterward that read: "CBA and our member banks support clear and easy to understand disclosures which are meaningful for our customers."
"To that end, we have been working with the CFPB on improving mortgage disclosures. We will continue to work with the CFPB on streamlining and simplifying disclosures to benefit consumers."
Earlier Thursday, Frank Pollack, president and chief executive of Pentagon Federal Credit Union, announced that his institution is adopting the one-page form that Pew Trusts developed.
"We believe the disclosure format created by Pew Trusts represents a better way forward for all financial institutions," Pollack said in written testimony to the Senate Banking Committee, "and we are proud to be a leader in rolling this out."
