Tags: customer | screening | bank | Capital One

Capital One to Limit Customer Screening in Accord With NY

Monday, 16 Jun 2014 01:39 PM

Capital One Financial Corp., with more than 250 branches in New York, agreed to limit its use of customer-screening databases that barred many low-income consumers from getting bank accounts, state officials said.

Capital One will no longer use ChexSystems, a computer program that screens applicants seeking to open checking or savings accounts, to decide whether consumers pose credit risks, New York Attorney General Eric Schneiderman said today in a statement.

Schneiderman has been investigating whether ChexSystems and other fraud-screening tools unfairly exclude poorer consumers and victims of identity theft from getting bank accounts.

Besides McLean, Virginia-based Capital One, letters from the attorney general’s office went to Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and JPMorgan Chase & Co. inquiring about the use of ChexSystems and similar programs.

Joseph Evangelisti, a spokesman for JPMorgan, declined to comment on the state’s inquiry. Lawrence Grayson, a spokesman for Bank of America, and Danielle Romero-Apsilos, a spokeswoman for Citigroup, declined to comment immediately. Mary Eshet, a spokeswoman for Wells Fargo, didn’t immediately respond to a request for comment.

Under the agreement announced today, Capital One can still screen applicants for past fraud, according to Schneiderman. As part of the accord, the bank won’t use reports of bounced checks, for example, to bar customers from obtaining accounts.

Needless Barrier

Schneiderman praised Capital One’s willingness to “eliminate an unnecessary barrier to opening a checking or savings account” and urged other banks to follow its lead.

Capital One, the fifth-biggest U.S. credit-card lender, was pleased the agreement worked to “expand access to critical banking services to all New Yorkers,” Kleber Santos, a bank official, said in a statement.

“The changes to Capital One’s policies, which are expected to take effect by the end of 2014, will be implemented nationwide,” according to the attorney general’s statement.

Besides New York, Capital One has branches primarily in New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia, according to its website.

Capital One rose 1 percent to $81.31 at 12:39 p.m. in New York, the best performance in the 24-company KBW Bank Index.

Nationwide, about 7.7 percent of people are “unbanked,” or have no checking or savings account, according to the Washington-based Corporation for Enterprise Development. Almost 18 percent are “underbanked,” or have accounts but continue to rely on check-cashing, pawn shops and other financial services, according to the organization.

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Capital One Financial Corp., with more than 250 branches in New York, agreed to limit its use of customer-screening databases that barred many low-income consumers from getting bank accounts, state officials said.
customer, screening, bank, Capital One
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2014-39-16
Monday, 16 Jun 2014 01:39 PM
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