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Banks' Checking Account Disclosure Forms Miss Key Information

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Citibank debuted a streamlined summary for checking account fees and features in July.
Citibank debuted a streamlined summary for checking account fees and features in July.

If you want to know how to close your bank account, you'll still have to wade through dozens of pages of the traditional account information form. That's just one piece of key information left out of the new simplified checking account disclosure forms that have emerged as a fresh trend among the big banks.

In the last six months or so, several big banks have created new forms to summarize their most common fees in an easy-to-read short format. Last week, Citibank became the latest one to release its own version of the short guide to fees, called Plain Talk. The bank joins JPMorgan Chase, TD Bank and Wells Fargo in providing customers a streamlined account guide. Bank of America is expected to debut simplified forms later this year.

Overall these new forms do provide useful easy-to-read outlines of the most common fees, including monthly service charges, ATM fees, overdraft fees and information about deposit processing and availability times. Their failure, however, to include information about how to close an account is a serious omission. Before one opens a bank account, it's always helpful to know how to close it.

As The Huffington Post has reported, consumers can get caught up in a wave of overdraft fees when they try to close a bank account. Banks' policies vary in how account closures are handled.

Viewed together, the four banks' new disclosure forms reveal less about their fees and more about the complexity of checking accounts. Each bank has different rules, caveats and exceptions related to basic checking account use; these might give each institution specific competitive advantages but can create headaches for comparison shoppers.

Such complexity has been an ongoing complaint for consumer groups who want checking accounts to be more user-friendly, with clearer disclosures and lower overdraft fees. Earlier this year, Pew Charitable Trusts' Safe Checking in the Electronic Age Project released a report that showed that the fine print accompanying a typical checking account ran 69 pages on average.

But using the simpler disclosure forms of these four banks to compare their checking accounts still involves a tough homework assignment. Consumers must hunt for information like whether online bill paying is free (free at Citibank as opposed to $3 per month at Wells Fargo) or the maximum number of overdraft fees that can be charged in one day (three at Chase vs. five at TD Bank). Chase, Citibank and Wells Fargo all offer ways to avoid a monthly maintenance fee and list them on their new forms. But the variations add to the confusion of comparing accounts.

The layout and labels on the disclosure forms are similar but not uniform from bank to bank. That makes it especially challenging to compare some of the more obscure fees, like the charge for using a debit card in a foreign location.

Citibank's two-page form is a page shorter than those of the other banks, yet that appears to be because the font size is much smaller and there is less white space. Wells Fargo will be the only bank to offer a simplified disclosure form in Spanish, when it rolls it out later this month.

Consumer comparison sites, like NerdWallet.com, offer some basic tools for comparing fees and interest rates at major banks and credit unions, but their information is far from complete. For consumers, shopping around for a checking account is still not an easy task.

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