At Banking Committee Hearing on Consumer Protection, Schumer Gets Unanimous Commitment from Consumer and Business Leaders to Support Drive for Concise, Easy-To-Read Checking Fee Disclosure Statement
Schumer Announced in May That He Will Introduce Legislation to Require Clear Fee Disclosure After Pew Report Revealed that Current Docs Are Usually Twice as Long as Shakespeare's Romeo and Juliet and Much Harder to Understand
Schumer: Today's Hearing Is Step Forward In Finally Making Checking Account Applications Clear for Consumers
U.S. Senator Charles E. Schumer today, at a Senate Banking Committee hearing, secured an agreement from leaders of the major business and consumer groups to support his drive for concise, easy-to-read checking fee disclosure statements on all checking account applications, similar to the "Schumer Box' disclose statement now found on credit card applications. During the hearing today, Schumer secured unanimous agreement from the Center for Responsible Lending, the Truliant Federal Credit Union and the Jacksonville Area Legal Services, as well as Albert Kelly, Jr., the President and CEO of SpiritBank (testifying on behalf of the American Bankers Association) and Andrew Pincus, a partner at law firm Mayer Brown LLC (testifying on behalf of the U.S. Chamber of Commerce), for his legislation requiring the disclosure box, which he announced in May. Adam Levitin, a Georgetown Law Professor who specializes in consumer finance law, also endorsed the proposal. Schumer's announced his legislation on the heels of a report released by the Pew Charitable Trusts which noted that half of all checking fee disclosure statements provided to new customers from the ten largest banks in the United States run over 111 pages, more than twice the volume of Shakespeare's Romeo and Juliet, and Schumer said that today's announcement was a major step forward in providing consumers with the disclosure they deserve.
"Consumers have a right to know what fees they may have to pay before they sign up for a checking account, and now leading business and consumer groups agree," said Schumer. "With today's commitment from leading consumer and business leaders to support clear, easy-to-read disclosure of banking fees, I'm hopeful that we can finally make signing up for a checking account as clear and easy as it should be."
Banks in the United States are currently required to provide disclosure to consumers of all fees they charge to customers, such as fees required to maintain accounts, overdraft charges, and ATM fees. As the Pew Report points out, however, those disclosures are often buried in a volume of information in densely printed text that is difficult for even the most sophisticated customers to understand. There are seven different terms used by the 10 largest US banks to describe overdraft fees, making it difficult for consumers to compare banks' overdraft policies, and half of all banks have more than 49 different fees buried in their disclosure statements. It is expected that consumers will pay over $38 billion in overdraft fees in 2011 alone. In order to make disclosure of fees more concise and easy to understand for consumers, the Pew Report recommended the creation of a Schumer Box for checking account applications. Enacted into law in 1988, by then-Congressman Charles Schumer, the Schumer Box requires credit card companies terms be clearly outlined in any promotional material.
At today's Senate banking hearing, Schumer today got a commitment from representatives of leading business and consumer groups to support his proposal, announced in May, to require uniform disclosure statements on checking account applications and promotional materials in an easy-to-read and concise format so that consumers can compare banking institutions before deciding to sign up for any particular checking account. Schumer's disclosure box will be based on the box proposed by Pew, which was designed with the feedback of checking account customers across the country, and will allow consumers to easily compare account terms and conditions across banks so they can choose the account and bank that's best for them.