A report from Pew Charitable Trusts found that banks are not doing enough with their disclosures on mobile remote deposit capture.
"Mobile remote deposit capture is a feature of mobile banking that is gaining in popularity with consumers, banks, and prepaid card companies. But Pew identified 10 areas in which either the terms of mRDC products are poorly disclosed or basic features, such as notifications regarding the status of deposited funds, appear to be generally unavailable," the Washington-based think tank wrote.
The Pew report focused on some 50 large banks. No credit unions were included in the findings.
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"Large majorities of banks…disclose some terms and conditions for using mRDC, including the costs, enrollment requirements, deposit limits, and posting policies; however, only one institution discloses all of them," Pew wrote.
According to the report, most banks do not disclose whether mRDC deposits follow funds-availability rules [Regulation CC] that usually apply to checking accounts; of those that do, all say that these rules do not apply.
When funds will be available is typically not clearly disclosed, according to Pew.
"Nearly half of banks (49%) do not disclose or provide details about their funds availability policies to prospective customers," Pew wrote.
Opacity rules throughout the mRDC offering, according to the report.
"Deposit limits for mRDC transactions vary significantly among banks. The minimum limit disclosed is $2,500 per month, and the maximum is $750,000 per month," Pew wrote. "However, 13 of these banks (49%) either do not disclose the existence of mRDC deposit limits or do disclose that they have these limits but do not provide details about them."
There was also considerable silence around rejected items.
"Ten banks (27%) disclose whether they actively notify consumers when a deposit has been rejected, and the remaining 27 banks (73%) do not disclose their policies," Pew wrote.
The survey's findings continued, "One discloses that it does not provide rejection notifications. Six (16%) of the nine banks that notify consumers of rejected mRDC deposits disclose that they may do so via email, and three (8%) do not specify the method of notification."
Some credit union experts contacted by CU Times said the Pew findings present a marketing opportunity.
"Members generally get a better deal on mRDC at a credit union," one expert who asked for anonymity because he was not authorized to comment, said.
Bob Meara, a Celent senior analyst who is recognized as a leading authority on mRDC, said this about the Pew report, "I'll bet the analysts didn't read deposit services agreements – as most consumers probably don't either. They would find, I believe, great transparency therein."
He added, "I found the reference to [Regulation CC] amusing as if consumers know or care about those arcane regulations. I'm no lawyer, but understand that Reg CC availability requirements in fact, don't apply to electronic deposits. Thus, FIs are free to offer different availability for RDC and image ATM deposits."
Robb Gaynor, a co-founder of Austin, Texas-based mobile banking app developer Malauzai, which typically builds mRDC into its apps, said that the trend among credit unions is to offer quicker availability of funds deposited via the remote channel.
He also said that many credit unions are now seeking to incorporate more individualized risk management based upon the profile of a specific member.
The upshot is that for consumers who put a high priority on mRDC, it simply is very hard to comparison shop institutions, Pew suggested.
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