Changing checking accounts can be a painful process, and one has to doubt the effectiveness of any regulation that claims to make that process easier. With all of the recent hysteria in the market over Bank of American’s new debit card fee, the topic of consumer switch costs was bound to get raised. It’s doubtful that Rep. Miller (D-NC) will get many takers as political capital is dear in a presidential election year, but some might give him an A for effort.
Miller’s bill, which so far has no cosponsors, would prohibit financial institutions from levying fees or charges once they received a request to close an account. It also requires institutions to notify consumers of preauthorized and recurring debits that hit their account for 30 days after a qualified account is closed. Also, the financial institution must give consumers at least 30 days to make a payment for an account that is closed with a negative balance before the institution can initiate any collection activity, or reporting to a third party.