Big Banks Still Hiding Big Fees

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Sonia Ashe

New Survey Shows Free Checking Widely Available at Small Banks – But Big Banks Are Still Hiding Fees from Consumers

Iowa PIRG Education Fund

A survey of hundreds of banks and credit unions in Iowa and 23 other states found that free checking remains available at more than 6 out of 10 small banks and credit unions but was only found at one-quarter of surveyed big banks (those with over $10 billion in deposits). The survey released today by the Iowa Public Interest Research Group also revealed that fewer than half of branches surveyed obeyed their legal duty to fully disclose fees to prospective customers on the first request, while 12% provided no fee information at all. 

The report, Big Banks, Bigger Fees: A National Survey of Bank Fees 2012, includes consumer tips and a local comparison shopping guide.  Today, Iowa PIRG volunteers shared this shopping guide with Wells Fargo customers – the bank with some of the least transparent fees. 

“Consumers should reject the myth that the days of free checking are gone,” said Sonia Ashe, Iowa PIRG Advocate. “Consider moving your money to a small bank or credit union to avoid those big fees at the big banks.”

Surveyors visited 250 bank branches in 17 states, including Iowa, to compare fees and determine whether banks were complying with the 1991 Truth In Savings Act, which requires disclosure of all account-related fees to prospective customers. In 2008, the U.S. Government Accounting Office (GAO) issued a report finding that researchers “could not obtain” complete fee schedules at 22% of bank branches visited. PIRG found identical results in its 2011 report and some improvement in 2012.The report also compiled bank fees from an examination of the online websites of a total of 330 banks in a total of 24 states and the District of Columbia. The survey found that full fee disclosure information was “often hard to find” online and only available at 62% of big banks surveyed and just 29% of small banks.

“Despite progress in regulating bank ‘gotcha fees’ consumer’s continue to struggle with getting information when shopping around for the best bank fee structure,” said Drake law professor, Cathy Mansfield. “To fix this problem, regulator’s must require more transparency and extend fee disclosure to the internet.” 

Among the findings of Big Banks, Bigger Fees:

  • Only 48% of banks visited provided researchers with fee schedules as required by law on their first request. After two or more requests, eventually a total of 72% complied with the law.
  • More than 1 in 10 (12%) never complied and refused to provide fee information, claimed that they didn’t have it, or told researchers to “go online.”
  • Researchers found a wide variety of free or low-cost checking options, with 63% of small banks and 60% of credit unions providing totally free checking. Although the biggest banks have recently tightened requirements to obtain free checking (available at 24%), it is still available at more than half of big banks with a regular direct deposit (59%).
  • The survey found that that small banks had lower average checking account fees, overdraft fees and foreign or off-use ATM fees, as well as lower balance requirements to avoid checking fees, than big banks.
  • None of the three biggest banks surveyed in Des Moines offer free checking without direct deposit. In comparison, 87% of the smaller local banks continue to offer free checking and 57% of credit unions offer free checking. 
  • Of the banks surveyed in Iowa, Wells Fargo was the only bank that would only provide partial information on fees. Only one of the big banks, US Bank, provided a complete fee schedule upon first request. 
  • Researchers in Iowa found that 50% of the smaller local banks in Iowa complied with the law and provided fees upon first request. Of the public credit unions surveyed, 75% made their fees available right away. 

A shopping guide included in the report compares banking options, directs consumers to free and low-cost checking choices, and provides a list of fees that consumers should look out for when picking a bank. The group urged consumers to vote with their feet when they found that bank fees were too high.

“Big banks are doing what they always do – raising fees – but trying to blame regulation for it,” said Ashe, “But free checking is still there for consumers who look for it and there are lots of ways to avoid high bank fees.”

Iowa PIRG also made a series of recommendations to the Consumer Financial Protection Bureau, which took over most consumer rule-writing for banks and other financial firms in July 2011. The CFPB also took over supervision of all big banks. It called on the CFPB to enforce the Truth In Savings Act, and to require banks to post fees on the web in searchable formats and make fee disclosures in a clear, tabular format – not buried in cumbersome multi-page brochures hidden deep inside websites.

“Big banks have found ways to skirt our regulations for years, and everyday Iowans are the ones who suffer,” said Matthew Covington, organizer with Iowa CCI. “Banks like Wells Fargo who continue to use shady practices and hide their fees don’t deserve our business, and need to be held accountable.”


Iowa PIRG, the Iowa Public Interest Research Group, is a non-profit, non-partisan public interest advocacy organization that takes on powerful interests on behalf of its members, working to win concrete results for our health and well-being. For more information, visit: