NY Banks Use Databases to Weed Out Potential Customers

ny banks use databases

Have The Banks Pushed Their Screening Tools too Far? NY Banks Use Databases to Filter Out Applicants/Potential Customers Who Were Not Fraud Related:


Major banking institutions such as Capital One, JPMorgan and Bank of America were screening applicants using a large database that was intended to find or detect people who practiced fraud in the major banking institutions not those customers who bounced/overdrafted checks in the past. The major database known in care of ChexSystems was used as a screening tool not only for crime individuals, but in preventing new customers who exceeded certain over-draft criteria in other bank accounts held previously. New York’s Attorney General became the first government office to seriously investigate the matter. Capital One is the first to admit the practice as openly as they have and are on track to curb their screening practices in using ChexSystems databases only to filter out potential fraud individuals further onward.

Most of the excessive screening has taken place in New York City and The State of New York, itself. Other financial regulating institutions are now investigating the matter such as The Consumer Financial Protection Bureau. Six major banks are being questioned about using the databases that were intended to weed out possible fraud clients, in filtering out new customers based on overdraft occurrences which occurred with other banks at some time before hand.  With overdraft fees running wild (almost 20 million dollars was paid in over draft fees by residents of New York Cities Bronx Neighborhood in 2008 alone) and several banks requiring future over draft protection to be secured only on credit cards it seems as though consumers who may of blundered or were irresponsible in the past have even less chance of redeeming themselves. In some cases clients were denied a simple checking account due to the screenings. At least three major banking institutions assessed and denied potential customers checking accounts via the ChexSystems database which is intended to be used to screen based on potential fraud criteria only, not standard overdraft occurrences.  The investigation is ongoing in the state of New York.


If your interested ….More Details on the story in the links below:


New York Atty. Gen. Scrutinizes Use of Applicant Screening …
Yesterday afternoon, New York Attorney General Eric T. Schneiderman announced an agreement with Capital One Bank under which the bank has agreed to stop using ChexSystems to review the payment history of persons …


Bank Account Screening Tool Is Scrutinized as Excessive
New York Attorney General Eric Schneiderman is the first government authority to focus on how banks use the databases. His office is expected to announce that Capital One will agree to change its use of ChexSystems and …


Posted by on Jun 21 2014. Filed under Latest Buzz. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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