What’s New With Checking Accounts?

  • JPMorgan Chase hacked and they have over 30 million checking accounts (HuffPost):

The bank, the nation’s largest by assets, disclosed last week that 76 million households were affected by the breach, which took place over the summer.

  • Online checking accounts and credit unions beat out traditional banks according to WalletHub study (Consumerist):

For its latest Banking Landscape Report, WalletHub researchers looked at the fees and features of around 2,000 different checking and savings accounts — both branch-based and online — and found that consumers looking for accounts with the lowest fees and the most features may benefit from going online or looking at a credit union.

Here’s chart showing average checking account fees by institution type:

  AverageFeesCheckingAccounts

  • Another data service, Moebs Services indicates that free checking more prevalent at credit unions also (Journal Gazette); oh, also found out that you can’t call it free checking if it has minimum balance.

Moebs Services collects information from more than 2,000 banks and financial institutions and sells it to a list of clients that includes some federal agencies.   Moebs said 48 percent of banks nationwide offer free checking, and almost 80 percent of credit unions do.  Banks aren’t allowed to call it free checking if there’s a minimum balance required. That rule and others are spelled out in the 1993 Truth in Savings Act.

  • How are consumers using checking accounts (TD Bank survey, FinancialBrand.com)?  Good survey to share with your students to see how consumers are currently using their checking accounts, the services they deem essential and what their preferred payment methods are.   This chart shows the frequency of usage per month as well as what percentage of checking account holders use a specific service:

frequency_of_consumer_banking_behaviors

  • This chart shows preferred payment methods for consumers:

consumers_preferred_payment_method

  • Consumers research checking products online then sign up at local branches (Financial Brand):

Today, about 70% of consumers shopping for deposit products do some or all of their research online. Despite their affinity towards online research, most of these online shoppers will end up opening their accounts at branches. Why? Most believe it’ll be more convenient. Not surprisingly, these shoppers usually choose a bank or credit union with a branch near where they work or live.

  • Report on payday loans released by Pew Charitable Trusts (Ars Technica):

Online payday loan operators threaten their customers, promote loans designed for long-term indebtedness, and charge exorbitant interest rates, according to a study by the Pew Charitable Trusts.  “Lump-sum loans online typically cost $25 per $100 borrowed per pay period—an approximately 650 percent annual percentage rate,” Pew said.

The report, “Fraud and Abuse Online: Harmful Practices in Internet Payday Lending,” (PDF) comes a month after the Federal Trade Commission halted an only payday scheme that the government said “allegedly bilked consumers out of tens of millions of dollars by trapping them into loans they never authorized and then using the supposed ‘loans’ as a pretext to take money from their bank accounts.”

  • Wal-Mart has a new checking product (see NGPF blog post for details)