Customers with Chase checking accounts or at other major banks face high costs if they decide that closing a checking account is the best move for their money, according to a new survey released by Consumers Union.
As a result, a policy and advocacy group is asking government officials to step in and set new customer protection laws and policies for the nation’s largest banks.
Closing a Chase Checking Account Could be Costly
Consumers Group conducted its survey to examine the practices of the 10 largest banks in the country — including JPMorgan Chase, Bank of America, Wells Fargo and Citibank. The survey found customers often choose to stick with their banks rather than closing a checking account in order to avoid penalties for switching to other institutions.
Customers who want to transfer funds to another bank are charged on average up to $10 for a certified check and up to $30 for a wire transfer. None of the banks surveyed offered free same-day electronic transfers.
The report also found that banks charge fees if customers want to close their accounts within a specific time frame. For instance, BB&T and Citibank charge a $25 fee to close an account within 90 days, while HSBC, PNC Bank and US Bank charge $25 to close an account that has been open for fewer than 180 days.
A reopened zombie account restarts monthly maintenance and minimum balance fees. Customers who are unaware that their accounts have been reopened can mount hundreds of dollars in penalties.
Congress Urged to Create Consumer Protection Laws for Banks
To increase customer protection laws for bank patrons and enhance consumer choices, Consumers Group is calling on Congress and the Consumer Financial Protection Bureau (CFPB) to consider requiring banks to:
- Bear responsibility for transferring a customer’s automatic payments and deposits from the old account to a new account within 14 days.
- Provide same-day electronic fund transfers at no cost to consumers.
- Reduce check hold times so consumers can quickly access deposits in new accounts.
- No longer assess unfair fees for closing accounts.
- No longer reopen accounts after consumers close them.
- Provide clear and accessible account closing procedures.
Also, Consumers Group is asking regulators to examine the feasibility of portable bank accounts to facilitate easier bank switching. All of these changes would require banks to implement fairer practices for their customers.
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