Durbin Calls on Illinois Colleges and Universities to Help Protect Students from Hidden Bank Fees
[EDWARDSVILLE, IL] – Colleges and universities should take a leading role in promoting transparency in checking account fees, U.S. Senator Dick Durbin (D-IL) said today at Southern Illinois University-Edwardsville. Durbin called on Illinois schools to encourage their partner financial institutions to voluntarily adopt a bank account fee disclosure form designed to make checking account terms and fees transparent and easy for consumers to understand. College students – many of whom open checking accounts for the first time – are particularly vulnerable to hidden fees and terms.
“College students opening their first checking accounts should not have to worry about hidden fees. They should be able to focus on their studies rather than spend their time wading through endless pages of fine print,” Durbin said. “It is time that financial institutions, especially those that serve student populations and advertise on campus, adopt a one-page, easy-to-read form that lists the fees and key terms for their checking accounts. Giving student consumers clear, upfront and accurate information about the fees that they will be charged will help them make sound financial decisions.”
The Pew Charitable Trusts has created a clear and simple form for financial institutions to adopt. Last week, Durbin sent letters to the Illinois Board of Higher Education and the Federation of Independent Illinois Colleges and Universities asking them to join him in this effort to keep their students informed about the fees associated with their checking accounts. In response, the University of Illinois Employees Credit Union announced that they would be adopting the Pew Form.
“I request your assistance in ensuring that all college and university students are given access to a concise, consumer-friendly disclosure form listing the fees and key terms for student checking accounts that are promoted by your member colleges and universities,” Durbin wrote. “This checking account fee transparency is particularly important for college and university students, many of whom open a new account when they matriculate. Many colleges and universities partner with financial institutions, allowing them to advertise student checking accounts on campus or to link their checking accounts to student ID cards. Please urge your members to ensure that their financial institution partners provide students with a simple, easy-to-read disclosure form based on the Pew model. Adoption of such a form will decrease the chances of students being confused or deceived by checking account fees and terms, and also will enable budget-conscious students to more easily comparison shop to find the financial institution that best serves their needs.”
Following the sensible decision last year by Bank of America, Wells Fargo and other banking giants to roll back or cancel planned debit card usage fees, consumers are now at risk from new, hidden fees being issued in their place. Last year, Durbin sent letters to the Illinois Bankers Association, the Illinois Credit Union League and the Community Bankers Association of Illinois urging them to ask their membership to adopt a disclosure form designed to make checking account terms and fees transparent and easy for consumers to understand. As a result, many of the nation’s largest banks and credit unions – including Chase Bank, the largest bank operating in Illinois – announced that they would voluntarily adopt the fee disclosure form, and Durbin has continued to urge other financial institutions to follow their lead.
The text of the letter that was sent to the Illinois Board of Higher Education and the Federation of Independent Illinois Colleges and Universities is copied below.
January 3, 2012
Carrie J. Hightman
Chairwoman
The Illinois Board of Higher Education
David W. Tretter
President
The Federation of Independent Illinois Colleges and Universities
Dear Ms. Hightman and Mr. Tretter:
I request your assistance in ensuring that all college and university students are given access to a concise, consumer-friendly disclosure form listing the fees and key terms for student checking accounts that are promoted by your member colleges and universities.
There have been widespread reports in recent months of efforts by financial institutions to charge new checking account fees or increase existing fees with little warning or with notice that is buried in pages of fine print. If financial institutions are not transparent, upfront, and honest about their fees and terms, student consumers cannot make informed financial decisions. I have urged banks and credit unions to adopt a model disclosure form developed by the Pew Charitable Trusts to provide this needed transparency for checking accounts. Pew’s disclosure form was carefully designed and tested to provide customers with a comprehensive summary of fees and terms in a simple, easy-to-read format. Commendably, several of the nation’s largest banks and credit unions have already agreed to voluntarily adopt this disclosure form and make it available to all their customers.
This checking account fee transparency is particularly important for college and university students, many of whom open a new account when they matriculate. Many colleges and universities partner with financial institutions, allowing them to advertise student checking accounts on campus or to link their checking accounts to student ID cards. Please urge your members to ensure that their financial institution partners provide students with a simple, easy-to-read disclosure form based on the Pew model. Adoption of such a form will decrease the chances of students being confused or deceived by checking account fees and terms, and also will enable budget-conscious students to more easily comparison shop to find the financial institution that best serves their needs.
There are many pressing issues currently facing the higher education community, yet your member colleges and universities should recognize the importance of ensuring transparency for the financial products sold to students on their campuses. Illinois’s colleges and universities can help the national effort to promote the transparency of these financial products. Our students and our communities will benefit as a result.
Thank you for your attention to this matter, and thank you for all you do to educate our nation’s students. Please do not hesitate to contact my office if you would like to discuss this matter further.
Sincerely,
Richard J. Durbin
United States Senator