Sen. Dick Durbin (D., Ill.), whose amendment limiting banks' cut on debit-card transactions triggered a plan by Bank of America to charge a $5 monthly fee for its debit cards and a huge consumer backlash, is trying to address the underlying problem: Most consumers have no idea how they pay their banks for service, which makes it difficult to comparison shop.
Today Durbin embraced a proposal made this summer by the Pew Health Group's Safe Checking Project: requiring banks to provide a simple, one-page disclosure - much like nutrition labels or the "Schumer Box" that identifies key credit-card terms - for key terms such as monthly fees, overdraft fees, and ATM fees on a standardized form (see a sample here) designed to make comparison shopping easier.
Pew, which helped draw crucial attention to bad practices by credit-card issuers in 2008 and 2009, has been trying to do the same with checking-account fees. In a study earlier this year, it said bank disclosures typically overwhelm depositors with an avalanche of paper: an average of 111 pages.
Pew's goal is hard to quarrel with: “a transparent, fair and competitive marketplace," according to Pew's Susan Weinstock, who joined Durbin and Jack Reed (D., R.I.) at a Capitol Hill news conference to promote the idea. Durbin and Reed also urged the simplified disclosure in a letter sent today to Raj Date, who is overseeing the new Consumer Financial Protection Bureau while Senate Republicans block confirmation of former Ohio Attorney General Richard Cordray, President Obama's choice to head the bureau.
Pew said this summer that, according to polling it conducted, the simplified checking-account disclosure should be a bipartisan slam-dunk. It was backed by poll respondents from across the spectrum.
It's as hard as ever to understand - after all the evidence of how bad banking practices led to the housing bubble and financial collapse - why the GOP would want to block basic consumer protection and double-down on Ayn Randian blind faith in an unregulated marketplace.
Are voters' memories really that short?