10/27/2011 - “Hidden or unexpected” fees are the No. 1 reason given by the working poor for closing bank accounts, a recent study found.
The study by the Safe Banking Opportunities Project, a project of the Pew Health Group, surveyed 2,000 predominantly low-income, Hispanic households in the Los Angeles area in a two-phase study. Study participants were screened and recruited through a door-to-door, interviewer-administered survey.
The second part of the study, conducted in 2010, found that 32 percent of respondents said fees were the top reason for abandoning traditional bank accounts, followed by a job loss or lack of funds (27 percent). Six percent cited poor customer service. (About a third of newly unbanked individuals did not attribute their decision to end their banking relationship to any option available in the survey.)
The study found that the ranks of the “unbanked,” or those without checking or savings accounts, increased over the course of the study, with more families closing bank accounts (13 percent) than opening them (8 percent).
“This data points to a real need for banks to better disclose their fees in a concise, easy to understand format,” Susan Weinstock, project director for the Pew Health Group, said in a statement.
The health group is urging the new Consumer Financial Protection Bureau to require that banks adopt a one-page disclosure form, to make checking account fees understandable for consumers.
Read the full article, Fees Help Drive Working Poor From Banks, on the New York Times' Bucks blog.
Pew is no longer active in this line of work, but for more information visit the Safe Banking Opportunities Project on PewHealth.org.