New law would make it easier to switch banks
Hasbro
Switching banks is something a lot of people resolved to do last year because of new fees and being fed up with banks' behaviors. Even so, a lot of people didn't switch because of all the hassle involved. Now, just as the banks look to be raising fees again, a new law in Congress would make it easier to switch banks by letting you keep your account number -- just like you can now keep your phone number.
While Bank of America (BAC) and other major banks backed down over plans to charge a fee just for having a debit card, other fees look to be on their way. In a weak economy, banks are looking to make extra money any way they can, so new and more expensive charges are almost a certainty. Consumers can look forward to new checking account fees, higher fees on out-of-network ATM's, costlier paper checks and safe deposit price hikes.
Some banks are even charging you to stop doing business with them. Chase (JPM) and PNC (PNC) are just two of the firms already charging a $25 fee just to close certain accounts.
Although 14 percent of customers are expected to switch banks this year (a five-year high), this is believed to be just a fraction of the number who would do so. The more services you use at your bank, the less likely you are to switch. Just 1.5 percent of checking customers who use direct deposit, online banking and electronic bill payments switch banks each year, compared with 20 percent who have a checking account alone, according to Celent, a financial consulting firm. Most bank customers use some if not all of those services. More than half of use direct deposit and nearly 40 percent use online bill pay, according to AlixPartners, a global consulting firm.
That's because having to do all the paperwork to dump your bank is daunting. It can involve notifying companies that send electronic bills straight to your bank, changing account numbers for your direct deposit, and maintaining the old accounts until all transactions have cleared.
Those problems wouldn't exist if you could take your account numbers with you, like you do with a phone number. Congressman Brad Miller (D-NC) has introduced a bill that would let you do just that. The Freedom and Mobility in Consumer Banking Act would "make it simpler to close accounts, and for 30 days following the closure, any direct deposits would have to be transferred to the new bank free of charge," Miller says.
"During that period, banks would also be obligated to notify customers when a recurring debit occurs. This measure wouldn't completely remove all the hassles of switching banks, but would protect consumers from unnecessary fees and grief," Miller adds.
Not only would the bill force banks to compete harder for customers, it also has technology on its side as well. The mechanisms to transfer accounts are already in place. The FDIC uses them whenever it takes over a failing bank and transfers accounts to a new bank. This technology is well-tested and work seamlessly.
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If the author did as bad a job as you say, giving us misinformation rather than fact, how does he get away with it? Have you sent an email to "the management"?
This guy is a freelancer, so his longetivity must depend on his credibility.
As you said in your comment, and I realized immediately, account number portability is useless unless you can keep the routing number as well, which definitely wouldn't work.
So, the author is guilty of misinformation at best and lack of subject knowledge and analytic skills at worst. Either way, poor reporting, fact checking and editorial review.
But, it did get me to click on the link, so I guess that is all that matters on the web.
You don't get to keep your account number at all. On the face of it keeping your account number wouldn't work anyway as you'd still have to contact all of your companies and change the routing number.
This bill has several goals...
* to make it easier to close an account.
* To make it more difficult for the bank to report you to credit reporting agencies for having an overdraft on your account when you close it.
* To make it so that they can't charge you for closing an account.
* to make it so the bank can't reopen your account to pay further debits.
* to force the bank to remind you that you've got reoccurring transactions still taking place.
* to force the bank to forward your money from any direct deposits to your new account for free (for 30 days).
You still have to contact all of the companies you do business with to change your banking information. This article is very poorly written.
That said...I'd still vote for this bill to pass.
After the third attempt at trying to decipher what the author way trying to say--I wanted to make sure that the gibberish that passed for information wasn't just in my head.
You don't get to keep your account number at all. On the face of it keeping your account number wouldn't work anyway as you'd still have to contact all of your companies and change the routing number.
This bill has several goals...
* to make it easier to close an account.
* To make it more difficult for the bank to report you to credit reporting agencies for having an overdraft on your account when you close it.
* To make it so that they can't charge you for closing an account.
* to make it so the bank can't reopen your account to pay further debits.
* to force the bank to remind you that you've got reoccurring transactions still taking place.
* to force the bank to forward your money from any direct deposits to your new account for free (for 30 days).
You still have to contact all of the companies you do business with to change your banking information. This article is very poorly written.
Well then, why can't they do the same thing with your personal information? Keep your personal info in a locked personal data account that you gives you the control of your personal info and how it's distributed to other people and companies?
...silence...crickets chirping....
Why is the entire system upside down where Corporations rip off your information and puts the onus on you to tell them they can't have it? Even IF you tell them they "can't have your personal information" guess what? There is no system that actually checks them to ensure they don't have your info on their servers or to ensure they wipe their servers and everyone else they sold your info too.
No personal freedom or privacy. It's all about taking care of our #$@ing corporations.