Checking Accounts: High Fees, 69-page Disclosures

Consumers are still getting hit with unexpected fees and aren’t receiving clear information about the costs involved with their accounts, according to a report by the Pew Safe Checking in the Electronic Age Project. The study examined the information on 274 checking accounts offered by the nation’s 12 biggest banks and credit unions.

Story length: 842 words

Access the full story here. (Also contains 2.18 minute video clip.)

John Dowd (Bowling Green State University) suggests some key “Takeaways” on the story:

Weber’s theory of bureaucracy lays out several characteristics of a particular (or ideal) organizational form. This article effectively highlights many of these characteristics, and demonstrates the power that bureaucratic organizations posses to limit the rights of many of their stakeholders. It also shows how bureaucratic power can frustrate attempts to redress concerns or complaints leveled against bureaucratic organizations.

According to Weber (1947), rules are a vital component for any organizational process. Furthermore, in order for bureaucratic organizations to function effectively, the rules must be systematized and firmly established in written form. In addition to the centrality of written rules, Weber (1968) argues that the most prevalent form of power within bureaucracies (and societies) is based upon “rational-legal authority” (pp. 215-216). This form legitimates institutional behavior enthymematically, through the taken-for-granted assumptions that are funded by legal authority and consent.

As a bureaucracy par excellence, the banking industry is legitimated through a multiplicity of regulatory bodies and legal standards. This article reveals several examples of banks using rational-legal authority to impose penalties and fees on customers, without clear explanations as to how the process works. For example, “opt-out” strategies work by automatically enrolling customers into overdraft protection when opening new accounts. However, “over-draft protection by default” and the consequent fees associated with it, are buried within page-after-page of legalese and other banking jargon designed to obfuscate (and legally sanction) unethical business practices. As the article points out, these practices can range from lack of disclosure, to reordering transactions in a blatant attempt to push accounts into overdraft more quickly. This again, is the power of bureaucracy. Thus, the main challenge is finding effective ways of navigating such firmly entrenched, institutional bureaucracy.

A couple questions to ponder:

  • In the spirit of the above, how can we navigate institutional bureaucracy, when its most potent characteristics are obfuscation and legality?
  • Should legality be the standard by which we assess organizational activity?
  • What would a humane, institutional ethics model look like? And how might we enact it?


Weber, M. (1947). The theory of social and economic organization. T. Parsons (Ed.). New York, NY: Free Press.

Weber, M. (1978). Economy and society. G. Roth & C. Wittich (Eds.). Berkeley, CA: University of California Press.

Read more “Takeaways” from John and other scholars here.

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