During a six-month survey of 392 bank and credit union branches in 21 states (as well as 12 online banks), U.S. PIRG found that fewer than 40% of them complied with the Truth in Savings Act to promptly divulge bank fees and rates.The report, "Big Banks, Bigger Fees: A National Survey of Bank Fees and Fee Disclosure Policies," examined the a number of consumer-related questions, including the ease of comparison shopping among banks, the availability of free or low-cost checking accounts, and how the newly created Consumer Financial Protection Bureau can improve transparency in the financial marketplace.
According to the Truth in Savings Act, banks are required to disclose the following:
- Maintenance fees, such as monthly service fees
- Fees required to open or to close an account
- Fees related to deposits or withdrawals, such the use of ATMs
- Fees for services such as stop-payment, balance inquiries, verification of deposit and returned checks.
The report also found that free checking was available at 50% of the surveyed banks, with an additional 29% offering free checking with direct deposit. Although free checking accounts were more prevalent among small and regional banks and credit unions, some big banks still provide this service, particularly when coupled with regular direct deposit.
The new Consumer Financial Protection Bureau, the report said, should strive to improve the transparency of account fee information by enforcing the current law and strengthening the law's disclosure requirements. Among its recommendations was one calling for banks to publish all fees and disclosures online.
The report also contained a number of tips for consumers to help them avoid or reduce bank fees, including these:
- Choose a local or regional bank. Smaller banks tend to be more consumer-oriented, and many offer better rates than big banks.
- Look for "free checking" options. You may be able to get free checking if you have your paycheck direct deposited into your account, and you can almost certainly get it if you keep a minimum balance.
- Bank electronically. Some banks charge less if you have your statements "sent" to you via email. If you're comfortable banking online, you can save money.
- Consider online banks. Banks without physical branches usually offer lower fees.
- Sign up for alerts. Some banks will send a text message to your phone or an email to let you know when your balance drops below a certain limit.
- Combine bank accounts. If you have more than one type of bank account or product (checking, savings, CD), ask if the amounts can be combined and counted toward your required minimum balance.
- Read your mail. New regulations require banks to notify you of new fees, and banks are scrambling to come up with new ways to boost profits. What looks like junk mail could be an important notification.
- Beware of new debit card fees. Some banks plan to start charging monthly fees for debit cards. Make sure yours isn't one of them.
- Don't be afraid to haggle. The new banking rules are going to make the marketplace more competitive, so your bank may be willing to cut deals to hang onto its customers.
- Comparison shop. There are several websites where you can compare what banks offer, including bankrate.com, moneyrates.com, findabetterbank.com, bankfox.com and mybanktracker.com.