WASHINGTON - A consumer group's attack on bank fees last week is rekindling a long-running debate on disclosure, just as Congress considers whether to reduce reporting requirements.

A study by U.S. Public Interest Research Group, an organization affiliated with consumer activist Ralph Nader, found that transaction account fees are rising at twice the rate of inflation.

The Nader group and other organizations argue that those fees justify additional regulation.

On the flip side, banks argue that fees are unlikely to fall while Washington continues to pile on new rules. Along with pushing fees higher, the cost of compliance saps a bank's ability to make loans, bankers contend.

Illustrating the debate is the Truth-in-Savings Act, which demands banks disclose all fees, penalties, and charges associated with a deposit account. A recent two-year survey from the American Bankers Association claims an average bank spent $30,000 just to implement Regulation DD. Day- to-day compliance costs more.

Truth-in-Savings is one of the laws that would be scaled back under regulatory relief legislation making its way through Congress. The House Banking Committee has already passed a regulatory relief bill, and a similar version is making its way through the Senate Banking Committee.

The bills also would ease the compliance burden on banks by relaxing the Truth-in-Lending and Community Reinvestment acts.

Banks support the bills, but the U.S. Public Interest Research Group is suspicious of banks and vehemently opposes regulatory relief legislation.

Ed Mierzwinski, consumer program director of the Nader group, said he would consider easing his attack on the bill if bank fees more closely reflected the institution's actual costs. Mr. Mierzwinski wants the government to create a consumer watchdog group to keep an eye on the industry.

But that's exactly what the banks do not want: more regulation. And, according to Karen Thomas, senior regulatory counsel for the Independent Bankers Association of America, hope for regulatory relief is dimming.

"At the beginning of the year, the chance of getting some regulatory relief looked promising," Ms. Thomas said. "Now it seems iffy."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.