Chase simplifies checking account disclosures
New York • Chase is making its checking account easier to understand.
The bank said last week it will start providing a three-page disclosure that helps consumers quickly identify the key terms of its basic checking account, such as the monthly fee and conditions customers need to meet to have that fee waived.
Chase, part of New York-based JPMorgan Chase & Co., will be the first major bank to adopt a version of the consumer-friendly disclosure developed by The Pew Charitable Trusts earlier this year. As it stands, Pew says disclosures are often more than 100 pages and bury the fees and terms of most interest to consumers.
The model disclosure developed by Pew in April is just one page and highlights terms such as the ATM withdrawal fee and overdraft policy.
The Pentagon Federal Credit Union and North Carolina State Employees' Credit Union adopted versions of the form in November. Chase said its version of the form will be available online and in branches immediately.
The bank said the disclosure was tested in focus groups to identify any jargon that might confuse customers.
"What surprised us most was that some of the words we tend to use just weren't clear to customers," said Ryan McInerney, CEO of Chase's consumer banking unit.
For example, the order in which a bank clears a customer's transactions is important because it can affect how many times the account incurs an overdraft fee. This process is often referred to as "posting order" in the industry, but McInerney said that term was met with blank stares in focus groups.
Chase's disclosure now explains the process in a section called, "How Deposits and Withdrawals Work."
The push for clearer disclosures comes at a time when banks have been revamping their checking accounts, in many cases by raising or introducing new fees. The newly created Consumer Financial Protection Bureau has also made it a priority to simplify the dense forms that accompany a variety of financial products.
Last week, the agency unveiled a simplified credit card agreement. It is also working on improving mortgage disclosure forms as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.