Yesterday, OSPIRG released a new report about bank fees. The report, "Big Banks, Bigger Fees - A National Survey of Bank Fees and Fee Disclosure Policies" shows that nationally, 24% of bank branches surveyed failed to provide undercover consumers with a list of bank fees as required by the Truth in Savings Act. These results are similar to what the GAO found in their 2008 investigation on the same topic.
This list of fees, their "fee schedule", is important for consumers to be able to shop around to get the best deal on a bank account. We list 18 different tips for consumers shopping for a bank account in the report, and on our blog today.
Of the bank branches we surveyed in Oregon, most complied with the law, although a couple didn't provide the fee schedule on first request - we had to ask more than once for it. But at three branches of Wells Fargo in Portland, we NEVER received the information, even after several requests. Therefore, we gave them an "F" for all three branches in our report.
Wells Fargo didn't like this, as indicated in the report at the Portland Business Journal. But their response indicated that they don't seem to understand the Truth in Savings Act that they must operate under. Their spokesman said "I can’t speak to what happened when any of the OSPIRG researchers walked into our branches, but I can tell you with absolute certainty that if they told a banker they wanted to actually open an account, the banker would have given them the 60-page account guide."
That's a big whoopsie on their part. The Truth in Savings Act specifically states that the fee schedule must be "made available to any person upon request," and NOT just to those interested in opening an account. Besides, a 60 page guide? The fee schedule is supposed to be a short document, not some tome you need to go over with your attorney.
The same undercover consumers had no problem getting fee schedules from Portland branches of Umpqua and U.S. Bank, and were also able to get one from Bank of America after a couple requests. Why didn't Wells Fargo provide it? Do they not understand federal regulations? Do they not care?
There's one big reason why compliance with this law is so poor.
Lack of enforcement.
Since the Truth in Savings Act was enacted, the bank regulators have largely turned a blind eye to enforcing it. However, soon that may be a problem of the past. The Consumer Financial Protection Bureau (CFPB) is getting ready to launch in July, and they will have jurisdiction to enforce this law. Since their only charge is to protect consumers, they are more likely to enforce this law more aggressively. However, the new Congress has been threatening to weaken this new agency before it even gets up and running.
We can't let them do this. We need a strong CFPB that will ensure consumers have all the information they need to make good decisions and enforce the laws that protect them.
In the meantime, we urge the local branches of Wells Fargo to look again at the requirements of the Truth in Savings Act and ensure their policies fully comply with the law.