New Bill in Congress Would Take the Hassle Out of Switching Banks
By Consumers Union on Friday, November 1st, 2013
Have you ever tried to switch banks – only to find that moving your money can be a real hassle?
Banks make it difficult for customers to switch to a competing bank or credit union. Rerouting direct deposits and automatic payments can be a confusing and frustrating process that takes several weeks to complete. Some banks charge high fees to close accounts and transfer funds. This limits consumer choice and insulates banks from more robust competition for customers.
Sadly, too many banks have attitudes similar to the fictional bank “First Money Lending,” which we spoof in our new video. First Money Lending, with its slogan “Your Money is Our Money,” offers “cradle to the grave” bank services for customers, complete with high fees and loans with outrageous interest rates.
That’s why we are fighting to pass the Freedom and Mobility in Consumer Banking Act, currently pending in Congress. If passed, this bill will make it easier for consumers to transfer their money to a different bank. It will direct the Consumer Financial Protection Bureau (CFPB) to develop clear rules on bank-switching to make it easier for consumers. These rules will:
- Give consumers the right to close an account without a fee, regardless of the remaining balance;
- Give consumers a choice of how to receive their funds upon closing their accounts, including a check or electronic transfer;
- Protect consumers from having old accounts reopened without their consent;
- Protect consumers from being changed any account fees after requesting to close the account;
- Require banks to provide clear account closing procedures; and
- Require banks to provide a list of all the automated transactions, such as direct deposit and bill payments, that go in and out of a consumer’s existing account to help consumers reroute those transactions to a new account.
A 2012 Consumer Reports National Research Center survey found that in the previous year, almost one-fifth of those with checking accounts thought about changing banks. The survey results showed that they favored moving their money primarily due to rising banking fees. They elected to not switch due to the difficulty of moving their automatic payments, and other concerns.
Take a minute to share this video with friends, then contact your representatives and demand that they support this bill – and your right to easily switch banks!