Schakowsky and Harkin Introduce Bicameral Legislation Will Increase Consumer Freedom in Banking

Washington, DC — Legislation introduced in both the U.S. Senate and U.S. House today would provide consumers with increased freedom in their banking decisions and protect consumers against unfair fees and bank practices that can create obstacles to switching banks. The legislation was offered by Congresswoman Jan Schakowsky (D-IL) and Senator Tom Harkin (D-IA).

"I am proud to join Senator Harkin in reintroducing the Freedom and Mobility in Consumer Banking Act, which was first introduced by, my good friend and tireless advocate for consumer rights, Brad Miller. This bill would make sure bank customers are able to transfer their business if and when they decide to do so, eliminating obstacles and ensuring transparency in the banking system," said Rep. Schakowsky. "I've heard from many of my constituents who still have problems moving their money to a new bank, but this bill would end that problem. I look forward to working in a bicameral effort to pass this common-sense, consumer-focused legislation as soon as possible."

"It should be easy for consumers to place their money in a financial institution of their choice. But, today, too many hardworking families, in particular those of modest means, do not have the flexibility to close an existing account and move institutions," said Harkin. "The commonsense legislation we are introducing today will allow consumers to easily and fairly move their money, which will also help make our banking system more competitive."

A 2012 report by Consumers Union, "Trapped at the Bank," found consumers can encounter myriad problems in switching banks accounts such as delays and uncertainty regarding automatic transfers, fees, or banks reopening closed accounts. The report also found that bank disclosures typically fail to contain even rudimentary information to help consumers in closing an account.

The Freedom and Mobility in Consumer Banking Act would restore real choice and competition in the market for consumer bank accounts by creating clear rules of the road for how to close an account and move to a new institution. The bill would direct the Consumer Financial Protection Bureau to issue rules to:

• Give consumers the right to close an account without a fee, regardless of the remaining balance;
• Give consumers a choice of how to receive their funds upon closing their accounts, including a check or electronic transfer;
• Protect consumers from having old accounts reopened without their consent;
• Protect consumers from being charged any account fees after requesting to close the account;
• Require banks to provide clear account closing procedures; and
• Require banks to provide a list of all the automated transactions, such as direct deposit and bill payments, that go in and out of a consumer's existing account to help consumers reroute those transactions to a new account.

Among the national groups supporting this legislation are: American for Financial Reform (AFR), The Center for Economic Justice, CFA, Consumer Action, Consumers Union, The National Fair Housing Alliance, The National Consumer Law Center (on behalf of its low- income clients), and U.S. PIRG.

###