Thursday, November 12, 2015

Screening Methods for Checking Account Applicants

If your credit union uses consumer-screening methods for opening a checking account, you may want to pay attention to a letter sent by New York Attorney General Eric T. Schneiderman last month to nearly 100 banks operating in New York.

The letter called on the banks revise their consumer-screening protocols to ensure that more consumers receive access to standard checking accounts.

According to the letter, the use of consumer-screening agencies like ChexSystems, Inc. and Early Warning Services, LLC has caused some banks to unnecessarily reject thousands of applicants for minor financial missteps, thereby denying them access to mainstream financial services.

This letter echoes the language from an October report by the National Consumer Law Center, a liberal consumer advocacy group.

While the letter is only for banks operating in New York, it is only a matter of time before credit unions are subject to the same oversight. In fact, the Consumer Financial Protection Bureau has signaled its intention to examine this issue more closely.

Rea the press release.

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