Study shows most American banks fail to offer safe, affordable checking
Thursday, March 29, 2018
By University of Kansas
Across the country, affordable checking is becoming a thing of the past. Bank of America recently ended its free online checking account offer, but “main street banks” and small institutions are taking similar measures. A report co-authored by University of Kansas researchers shows that a majority of American banks are failing to offer safe and affordable checking accounts, missing industry standards and shutting some out of the financial mainstream.
Terri Friedline, assistant professor of social welfare and director of financial inclusion in the Center on Assets, Education and Inclusion in KU’s School of Social Welfare, led a study to assess whether banks are offering safe, affordable checking to all consumers. The results show that very few do, while many charge high rates and overdraft fees. The study also found that bank staff are often allowed to use discretion in whether to charge overdraft fees. The study assessed if low- to moderate-income consumers could afford checking accounts and if banks were meeting 2017-18 Bank On National Account Standards.
“In terms of guidelines for safety and affordability, banks rate pretty low,” Friedline said. “Only about nine percent meet these safety and affordability guidelines. And these aren’t just the big Wall Street banks. They’re also small-town, main street banks like those that Congress just voted to protect by scaling back Dodd-Frank regulations.”
Photo courtesy of reynermedia.