This report is the fourth in a series by The Pew Charitable Trusts examining key checking account terms and conditions. In our first report, in 2011, "Hidden Risks: The Case for Safe and Transparent Checking Accounts", we studied and reported on the disclosures from the 10 largest banks in the United States by deposit volume. Our second report, in 2012, "Still Risky: An Update on the Safety and Transparency of Checking Accounts" expanded the research and examined the disclosures from the 12 largest banks as well as the 12 largest credit unions. In both reports we highlighted our policy recommendations, which urge the Consumer Financial Protection Bureau, or CFPB, to write new rules requiring financial institutions to:
* Summarize key information about terms and fees in a concise, uniform format.
* Provide accountholders with clear, comprehensive terms and pricing information for all available overdraft options.
* Make overdraft penalty fees reasonable and proportional to the financial institution's costs in providing the overdraft loan.
* Post deposits and withdrawals in a fully disclosed, objective, and neutral manner that does not maximize overdraft fees.
* Prohibit pre-dispute mandatory binding arbitration clauses in checking account agreements, which prevent accountholders from accessing courts to challenge unfair and deceptive practices or other legal violations.
This study and our 2013 report, "Checks and Balances: Measuring Checking Accounts' Safety and Transparency", rate the 50 largest banks based on how well their disclosure, overdraft, and dispute resolution practices meet these policy recommendations.