On Aug. 8, the Pew Charitable Trusts released its most recent report in a series focused on checking accounts, and the results will no doubt be of interest to college students — and their parents.
“Student Checking Accounts: Are They Worth It?” looked at student accounts offered by the 12 largest U.S. banks and 12 largest credit unions. Pew found that these accounts typically contained only minor differences from other “basic accounts” offered to everyone and that these differences were not always helpful to students. Moreover, the differences were often buried in more than 90 pages of disclosures and agreements. Pew’s policy arm — the Pew Center on the States — wants the Consumer Financial Protection Bureau to mandate basic “fact boxes” for all checking accounts, including student accounts.
“These things are very long, text-heavy and full of legalese. What we need is a nutrition label for checking accounts. It needs to be clear and uniform, the way it is on a can of soup,” says Susan K. Weinstock, the director of Pew’s Safe Checking in the Electronic Age Project.
In focus groups, researchers discovered that college students were disproportionately affected by overdraft fees. Two specific overdraft fees associated with these accounts have gone up in the past two years: extended overdraft penalties and overdraft transfers.
“Right now, if you want to shop for a checking account, you can look at where the branches are and where the ATMs are, but that’s pretty much it,” says Weinstock. “We want people to be able to shop on the things that really matter — what it’s going to cost them.”
Of the 12 major banks featured in Pew’s report, these received the highest rankings for “Accessibility of Important Account Information.”
1. Bank of America
2. Wells Fargo Bank
3. JP Morgan Chase Bank
These banks received the lowest rankings:
1. Capital One
2. Regions Bank
3. HSBC Bank