Two years ago I reported on the Pew Charitable Trusts' short and concise disclosures for checking accounts. Pew's press release did a good job at explaining why this simplified checking account disclosure was needed:
Important policies and fee information are often hidden in long, highly technical banking literature, according to Pew’s research of more than 250 checking accounts offered online by the nation’s 10 largest banks. The median length of disclosure documents is 111 pages and includes account agreements, addendums, fee schedules, and pages on the banks’ Web sites.
Ally Bank jumped on the bandwagon today by introducing its Straight Talk Product Guides. Ally’s press release explains about these guides:
In keeping with its straightforward, customer-friendly approach to banking, Ally Bank, the direct banking subsidiary of Ally Financial Inc., today announced it has implemented Straight Talk Product Guides for its Ally Interest Checking, Online Savings Account and Money Market Account that incorporate The Pew Charitable Trusts' short and concise disclosure box for checking accounts. Guides for the entire portfolio of Ally Bank products are underway for posting online by the first quarter of 2014.
Developed by Pew as a model for banks and credit unions, this simple format is designed to provide consumers with clear and concise information about the key fees, terms and conditions on their checking accounts. The short format also helps consumers understand banking fees and important policies when comparing bank accounts.
Unfortunately, they are still working on the CD and IRA guides. According to Ally’s press release:
Straight Talk Product Guides for Ally Bank's Certificates of Deposit and Individual Retirement Accounts are also in development and scheduled for publication by the first quarter of 2014.
As I mentioned in my 2011 post, savers need a simple and standard disclosure for CDs. We don’t want to see anymore institutions like Fort Knox FCU and CEFCU surprise their CD customers with early withdrawal penalty changes on existing CDs. The simplified CD disclosure should include a section for early withdrawal. The section should clearly specify the amount of the early withdrawal penalty, whether partial withdrawals of principal are allowed, whether approval by the bank is required for early withdrawal, and if the bank reserves the right to change the early withdrawal penalty on existing CDs before maturity. There should be no other small print buried in any other disclosures that allows the bank to change the rules.
In 2011 I asked readers to give their opinions about what they would like to see in a standard and simplified CD disclosure. DA member cumulus and another reader provided their suggestions. If you have any additional suggestions, please leave a comment.