If you've opened a checking account, chances are you've skipped reading the mile-long account agreement that comes with it. Thanks to the Safe Checking Project from the Pew Charitable Trusts, those lengthy documents are starting to get shorter.
This week, TD Bank decided to condense its account terms into a document that everyday account holders can actually understand. My colleague, Claes Bell, covered the efforts to simplify bank info at Chase last year, and TD's recent announcement makes it the second big member of the banking industry to proactively address the issue of cumbersome checking account agreements.
I traded notes with Susan Weinstock, the director of the Safe Checking Project, this week. The project's mission is straightforward: replace documents that have an industry-wide average length of 111 pages (yes, you did read that correctly) with one-page breakdowns of fees and rules.
Weinstock says that a total of seven financial institutions have voluntarily adopted the project's model disclosure box. Seven? With more than 14,000 banks, savings associations and credit unions in the country, I would expect a total that at least cracked the double-digits.
Here's a look at the institutions that have taken Pew's recommendations to heart:
- TD Bank.
- Inland Bank.
- University of Illinois Employees Credit Union.
- Eastman Credit Union.
- Pentagon Federal Credit Union.
- North Carolina State Employees Credit Union.
While I commend these banks and credit unions for their early adoption of Pew's model, the fact that more institutions haven't taken steps toward more transparency is discouraging.
As an account holder, you shouldn't be forced to wade through loads of text to understand what fees you might pay for your financial products. It's contradictory to the position that so many financial institutions take when promoting mobile and online banking tools: They want to make your life easier.
Weinstock is encouraged that the CFPB has begun to focus on checking account overdrafts, but she also highlights that the bureau will need to dig deeper to ensure that all customers receive fair explanations of all fees.
What do you think? Why haven't more banks and credit unions adopted Pew's recommendations for simple account disclosure documents? Should the CFPB force financial institutions to address the issue?