Since the 2008 financial crisis and the big bank bailouts, consumers have grown wary of the biggest banks in the U.S. trying to squeeze them with new fees or reduced services. (Remember that BofA $5 debit fee they tried to pin on their customers?)
But a lot of consumers have stayed put at the big banks. Why? There could be a lot of reasons, but one of them is definitely this: it takes time and money to move your money. If you have automatic deposits and debits set up, it can be a nightmare transferring it all over to a new account. In the meantime, you may have to keep two accounts open at once, and have enough money to make sure you can pay bills from at least one of them. And even if you close your old account, some banks may reopen it if a stray credit or debit hits it.
Based on extensive research looking at the policies of the top ten retail banks in the U.S., our new report identifies the obstacles to switching bank accounts, discusses what other countries are doing to try and address the problem, and makes some commonsense recommendations for how the U.S. can enhance competition in the marketplace and make it easier for consumers to change banks:
- Banks should bear the responsibility to transfer the automatic credits and debits from old to new accounts.
- Banks should provide same-day electronic fund transfers at no cost to consumer.
- Checkhold times should be reduced so that consumers can quickly access deposits in their new accounts.
- There should be no punitive fees to close an account.
- Banks should not reopen accounts after consumers close them.
- Account closing procedures must be transparent and easy to locate.
- The feasibility of bank account number portability should be examined.
Have you tried to move your money? If so, please share your story with us.