May 13--Ally Bank is the friendliest to consumers when it comes to disclosing fees, handling overdrafts and resolving disputes, according to a study released Tuesday by Pew Charitable Trusts.
Pew, in its most recent evaluation of big retail banks, found that about three-fourths of the 32 banks that it has reviewed over the past three years are providing clear and concise disclosures of terms and fees.
In 2013, only a quarter of those banks had a comparable summary disclosure box, Pew said.
Providing transparent disclosures about checking account fees and terms is among the ways that banks can help consumers make "informed choices" about where to keep their money, Pew said.
Banks also should try to reduce the number of overdrafts, end practices that maximize overdraft fees and allow consumers to choose the method by which to resolve a problem, rather than requiring binding arbitration.
Pew found that banks also are becoming less likely to process transactions from the highest to the lowest dollar amount -- a practice that can lead to more overdraft fees. It favors using a more neutral method, such as according to chronological order. Pew found that 56 percent of the banks don't reorder the transactions or don't charge any overdraft fees, up from 41 percent in 2013.
Ally, headquartered in Detroit, was the only bank to get perfect scores on Pew's seven "best" practices -- adopt a summary disclosure box that meets Pew's criteria; don't allow overdrafts at either ATMs or at cash registers; no high-to-low transaction reordering; no mandatory binding arbitration; no class-action waiver clause; and no loss, costs and expenses clause. Loss, costs and expenses clauses require consumers who pursue a dispute about their account to pay their bank's costs, no matter the outcome of the case.
Banks that were deemed to have five of seven best practices included USAA, Bank of America, Charles Schwab Bank and Citibank.
Banks with only one best practice included FirstMerit, an Akron, Ohio-based lender that has been trying to become a bigger player in the Chicago market.
"We are finalizing our customer account disclosure summaries and expect to introduce them by the end of May," FirstMerit spokesman Rob Townsend said.
Mike Moebs, chief executive of Moebs Services, a Lake Forest-based tracker of bank pricing data, found fault with the Pew survey. Among other things, he said credit unions weren't included in the Pew survey, and he noted that only a fraction of the nation's 6,500 U.S. banks and thrifts were evaluated.
byerak@tribpub.com
