Large credit unions and banks can be blamed for elevating overdraft fees and implementing inconsistent checking account disclosures and practices, putting consumers at risk of high, unexpected costs.

That's the key finding from the just-released Pew Safe Checking in the Electronic Age Project's “Still Risky: An Update on the Safety and Transparency of Checking Accounts,” a report produced by the Philadelphia- and Washington, D.C.-based public policy non-profit Pew Charitable Trusts.

Pew's survey results reveal the U.S.'s 12 largest credit unions and 12 largest banks, by deposit value, are engaging in practices that have the potential to negatively affect nine out of 10 American adults with checking accounts.

Susan Weinstock, the project's director, said these less-than-ideal practices include putting out checking account disclosures at median lengths of 69 pages, failing to clearly lay out overdraft options and increasing overdraft fees in the past year.

“Consumers are expected to wade through long, confusing documents and may be subject to steep, unexpected fees to access their own checking accounts, which are the cornerstones of household financial management,” Weinstock said. “Consumers must have understandable, transparent information that enables them to make educated choices when comparing one checking account's costs and benefits to another.”

Pew recommends the Consumer Financial Protection Bureau or Congress make regulatory changes to help prevent unexpected checking account-related costs to consumers.

Weinstock outlines four regulatory change recommendations as follows: require financial institutions to make a disclosure box that outlines key checking account terms and conditions available in branches and online, mandate clearly laid out overdraft options, require overdraft fee amounts to be reasonable and proportional, and prohibit transaction reordering that maximize overdraft fees.

Instant Insights /

Pew: Checking Account Practice Improvement Needed at 12 Largest Credit Unions

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