Sunlight Foundation Reporting Group

Bank fees are up, but disclosure is sorely lacking

As banks continue to raise their fees for consumer accounts, and free checking appears to be going the way of the dodo, banks have a decidedly spotty record on clearly disclosing these fees to their customers--even though they are required to do so by law.

A survey out this week from the site BankRate.com says virtually every way a bank can charge money is up. Sixty percent more noninterest accounts carry fees and balance requirements than they did last year. ATM fees are at an all-time high for the seventh consecutive year. Maintenance fees for checking accounts have increased.

Meanwhile, many consumers will have a hard time getting information from their banks about these very fees. Fewer than half of nearly 400 banks surveyed by researchers at U.S. PIRG, a nonprofit consumer advocacy group, provided paper copies of fee schedules the first time they were requested, according to the group’s report, published last spring. Nearly one out of four did not supply any information at all.

And in this era of the internet, it’s very difficult to find information online.

“You can search on the web for information about PAC donations, or the price of televisions or movie rankings, but there are few aggregator sites where bank fees can be compared,” notes the report.

“Nor do most banks provide decent explanations of their fees on their own sites. Most prominently they compare only a few basic features of the accounts. While fee schedules are sometimes available, they are often buried in links at the bottom of long pages, then downloadable only as ponderous multi-megabyte pdf files.”

Under the 1991 Truth in Savings Act, banks are required to supply customers with a fee schedule of charges. The types of fees banks must report include: maintenance fees, such as monthly service fees; fees to open or close an account; fees related to deposits or withdrawals, such as ATM fees; and fees for special services, such as stop-payment fees.

But in practice it’s hard to hunt down this information. PIRG’s findings are similar to those in a 2008 General Accounting Office (GAO) survey of 185 bank branches which found that one out of four did not provide information on checking and savings account fees.

PIRG is lobbying the newly created Consumer Financial Protection Bureau to make disclosure better, by requiring that banks post fees on the Internet in a searchable, machine-readable format, "which would encourage the establishment of local online bank shopping guides by community groups." The group also asks that the disclosure format be simplified in a tabular format, and that the Federal Reserve should go back to publishing an annual survey of bank fees, among other recommendations.

But in an interview, Ed Mierzwinski, PIRG's federal consumer program director, says that with the fledgling consumer agency under attack in Congress, there has been no action yet. PIRG has reported spending $159,000 on federal lobbying efforts so far this year.

As we wrote earlier this year, information is also spotty on how much money banks make on individual fees, as the quarterly "call" reports they file with federal regulators lump this information into broad categories.

About the data

What: Bank fees on checking and savings accounts

Where: The 1991 Truth in Savings Act requires banks to disclose fees to customers

Availability: Banks are supposed to supply information on fees upon request, but a recent survey showed that fewer than half do. Some post fees on their websites but the information can be difficult to find.

Usability: There is no current requirement that banks supply information in a machine-readable format, so it is difficult to analyze fees among different banks.