Consumers paying more to access their own money


Consumers are putting out even more cash to access their own money. Image: Flickr / MoneyBlogNewz / CC-BY

The price for bank customers to access their own money appears to be going up. The federal Truth in Savings Act requires that banks disclose all fees involved with bank accounts. Two recent reports highlight the high cost of everyday financial transactions, all while the Consumer Financial Protection Bureau waits for a director.

The high cost of accessing your own money

The Pew Health Group, a subdivision of the Pew Charitable Trusts, has released a new report on the average checking account in the U.S. According to this study, the average bank checking account has four often-used fees:

  • An opt-in overdraft fee of $35
  • Overdraft transfer fee of $10 per occurrence
  • Extended overdraft penalty of $25 per week
  • A monthly fee of $8.95

Financial research service Moebs estimates that in 2011, banks will make $38 billion from overdraft revenue, 90 percent from “frequent fliers” in the overdraft system.

Lack of transparency in bank accounts

The Credit CARD Act of 2009 was written to help protect consumers from deceptive and non-transparent fee structures. The Truth in Savings Act, passed in 1991, was intended to implement the same kind of reforms in the banking system. The U.S. PRIG advocacy group recently conducted a compliance review of banks and credit unions and found that less than 60 percent of banking institutions surveyed provided the fee and cost disclosures required by the Truth in Savings Act. Full compliance with the TiSA was at about 40 percent.

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau is the federal agency charged with overseeing financial products. The CFPB, however, has yet to find a director that Republicans and Democrats agree on. Currently, House Republicans have threatened to block all nominees for head of the CFBP unless the structure and funding for the agency is changed. Many of the consumer watchdog functions of the CFPB cannot be put into effect until the agency has a director.

Avoiding fees at your bank

When you are trying to decide on a bank or credit union, there are a few things to look for to protect yourself. First, check out local and regional banks and credit unions rather than “big name” banks. You should also ask about free checking options and ask for a clear, concise disclosure about overdraft fees, fines and monthly maintenance fees. You should also sign up for alerts, so you can be informed when there are changes to your bank account.


Washington Post
Pew Trusts

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