According to a brand new report, big banks are still utilizing hidden fees to make up for earnings lost to regulatory efforts.
Additional hidden charges regardless of regulation
A ton of banks are still misleading customers about costs and putting in hidden costs, according to a Pew Charitable Trusts report. The report looked at 12 major banks during the last 18 months.
The report looked at practices in Bank of America, Chase bank, Citibank, Wells Fargo, Capital One, Regions Bank, HSBC Bank USA, Branch Banking and Trust Business, TD Bank, PNC Bank, U.S. Bank and SunTrust Bank.
Still charges hidden in pages
There are hidden charges in the confusing language found in bank disclosures, though the average disclosure is only 69 pages this year instead of 111 last year.
It also found, in some cases, that pertinent terms and conditions of some goods were not revealed on the institutions’ web sites, requiring consumers to drop by a branch or request mailed documents to get full-disclosure.
Regulations limit debit card charges
There were limits put on debit card swipe fees, which meant banking institutions lost a lot of revenue. Wells Fargo itself lost 32 percent in revenue because of the change.
It is more costly to keep deposits too since getting insurance from the Federal Deposit Insurance Commission costs more now.
Lenders, says Pew, then started applying more hidden charges to customers to make up for the lost revue. Charges for ATM withdrawals and for overdraft protection was among the most widespread ways banking institutions tried to recoup losses on the backs of depositors.
Don’t have some inherent right
However, as President Obama said of banking institutions in an interview with ABC News last year:
You don’t have some inherent right just to get a certain amount of profit if your customers are being mistreated.”
The Pew report showed that consumers are getting unfair charges that are inflated to make up for lost revenue from laws which were supposed to make it easier on customers. Banks say they are charging fair costs.
Getting the required legislation
In order to keep banking institutions from hurting consumers to get more cash, the CFPB is encouraged by the report to bring more regulation.
According to the report:
An efficient market requires informed consumers who can make choices based on the product that best meets their needs. This is particularly important for an item as fundamental and significant as a checking account.”
Sources
Pew Trust
Wall Street Cheat Sheet
NBC
