August 19, 2015
Do you know how much your bank charges in fees? If not, could you find out easily, or would you have to wade through a confusing mess of commercial jargon on the bank's website?
WalletHub decided to find out which banks provide the clearest, most accessible information on their fees in a study on checking account transparency.
With more than 100 million active checking accounts in the U.S., banks stand to make a big buck off fees – in fact, the industry collects more than $30 billion in overdraft fees each year.
The study analyzed checking account applications on the websites of the 30 largest banks and five largest credit unions and then scored those banks on three categories: visibility, accessibility and clarity. That means that the fee information was featured prominently on the website or was easy to find and that it written as clearly as possible.
Capital One, Ally Bank and Charles Schwab topped the rankings, each with transparency scores of more than 90 percent. At the bottom of the list were Bank of the West, KeyBank and the Boeing Employees Credit Union, which all had transparency scores of 65 percent or less.
You might guess that online-only banks would have better websites than traditional banks, but the reverse was true. Traditional banks had an average transparency score of 85.3 percent, while online-only banks had an average score of 76.4 percent.
One big issue that WalletHub emphasized is that there's no uniformity in how checking account fees are presented. Credit card offers have to follow a uniform disclosure format called the Schumer Box, but checking account offers don't have to follow that kind of regulation.
"Unfortunately, checking account disclosure practices resemble the Wild West," the report said.
The study advised consumers to read the bank's fee schedule thoroughly. It also said to remember that not all fees are disclosed before a consumer applies for a checking account, so be on alert for statements like, “A full/complete fee schedule will be provided after sign-up.”