During this same period, the portion of  depository institutions revenues derived from noninterest sources— including, but not limited to, fees on savings and checking accounts— increased somewhat. Federal regulators’ examination procedures for Regulations DD and E do  not require examiners to evaluate the reasonableness of fees associated  with checking and savings accounts. In analyzing complaints  specifically about checking and savings accounts from 2002 through 2006,  we found that, on average, about 10 percent were related to fees, and 3  percent were related to disclosures. Collectively fee and disclosure complaints represented less than 5 percent  of all complaints received during this period. On average, this is about 335 instances annually among the  nearly 17,000 depository institutions that these regulators oversee. Despite Federal Regulations and Compliance Examinations, We Experienced Difficulty Obtaining Fee Information

The results of our requests for information on fees or account terms and  conditions at depository institutions we visited, as well as our visits to  institutions’ Web sites, suggest that consumers may find it difficult to  obtain such information upon request prior to opening a checking or  savings account. Further, federal banking regulators’  examination processes do not assess whether potential customers can  easily obtain information that institutions are required to disclose. Smaller percentages had information on fees for overdrafts and insufficient  fund fees. Changes in both consumer behavior, such  as increased use of electronic forms of payment, and in the terms and  conditions of accounts offered by depository institutions may be  influencing these trends in fees, but available data do not permit  determining their exact effects. However, even  under the revised procedures, the regulators’ examinations do not  determine whether consumers actually receive required disclosure  documents before opening an account. We were unable to  obtain detailed information about fees and account terms and conditions at  over one-fifth of the branches we visited and, in many cases, we found  inconsistencies among branches of the same depository institution. Objectives, Scope, and Methodology

Our report objectives were to determine (1) the trends in the types and  amounts of fees associated with checking and deposit accounts since 2000;  (2) how federal and selected state banking regulators address checking and  deposit account fees in their oversight of depository institutions; and (3)  the extent to which consumers are able to obtain account terms and  conditions and disclosures of fees, including information about specific  transactions and bank practices that determine when such fees are  assessed, upon request prior to opening an account. We reviewed the federal Truth-in-Savings Act (TISA) and  Regulation DD, which implements TISA, to determine what disclosure  documents depository institutions were required to provide to new and  potential customers. Some bank fees have increased since 2000, while a few, such as monthly  fees, have decreased.
Why GAO Did This Study

In 2006, consumers paid over $36 billion in fees associated with checking and savings accounts, raising questions about consumers' awareness of their accounts' terms and conditions. GAO was asked to review (1) trends in the types and amounts of checking and deposit account fees since 2000, (2) how federal banking regulators address such fees in their oversight of depository institutions, and (3) the extent that consumers are able to obtain account terms and conditions and disclosures of fees upon request prior to opening an account. GAO analyzed fee data from private data vendors, publicly available financial data, and information from federal regulators; reviewed federal laws and regulations; and used direct observation techniques at depository institutions nationwide.

What GAO Found

Data from private vendors indicate that average fees for insufficient funds, overdrafts, returns of deposited items, and stop payment orders have risen by 10 percent or more since 2000, while others, such as monthly account maintenance fees, have declined. During this period, the portion of depository institutions income derived from noninterest sources--including fees on savings and checking accounts--varied but increased overall from 24 percent to 27 percent. Changes in both consumer behavior, such as making more payments electronically, and practices of depository institutions are likely influencing trends in fees, but their exact effects are unknown. Federal banking regulators address fees associated with checking and savings accounts primarily by examining depository institutions' compliance with requirements, under the Truth in Savings Act (TISA) and its implementing regulations, to disclose fee information so that consumers can compare institutions. They also review customer complaints but do not assess whether fees are reasonable. The regulators received relatively fewer consumer complaints about fees and related disclosures--less than 5 percent of all complaints from 2002 to 2006--than about other bank products. During the same period, they cited 1,674 violations of fee-related disclosure regulations--about 335 annually among the 17,000 institutions they oversee. GAO's visits to 185 branches of 154 depository institutions suggest that, despite the disclosure requirements, consumers may find it difficult to obtain information about checking and savings account fees. GAO staff posing as customers were unable to obtain detailed fee information and account terms and conditions at over one-fifth of visited branches and also could not find this information on many institutions' Web sites. Federal regulators examine institutions' written policies, procedures, and documents but do not determine whether consumers actually receive disclosure documents. While consumers may consider factors besides costs when shopping for accounts, an inability to obtain information about terms, conditions, and fees hinders their ability to compare institutions.