New York Atty. Gen. Scrutinizes Use of Applicant Screening Services
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 seeking to open an account. Instead, the system will simply be used to assess fraud risk.
“No one – least of all struggling New Yorkers – should be forced to rely on high-cost alternatives to banks just because they bounced a check or were a victim of identity theft,” Attorney General Schneiderman said. “Equal access is the least we can do to ensure that all New Yorkers have access to widely used services such as our nation’s banking system. I commend Capital One for stepping up and working with us to help eliminate an unnecessary barrier to opening a checking or savings account. I would hope other banks will step up and join us to do the same.”
This is a very carefully worded announcement. Although the AG hopes that this agreement becomes a model for large banks and credit unions, many of which use ChexSystems or other similar services for applicant screening, Capital One is not accused of engaging in illegal conduct nor is there anything illegal about reviewing an individual’s paying history when opening an account. Clearly, however, the AG is concerned that such practices may have a disparate impact on low-income New Yorkers. At this point, I wouldn’t change any of my account opening practices, but if I used ChexSysems or similar services I might want to take a quick look at the criteria being used to screen out potential applicants and make sure it is necessary.
Keeping in mind that this is just one man’s opinion, while the millions of unbanked across the nation is a serious problem, I find it hard to believe that basic account due diligence is a major contributor to this dilemma. If the Attorney General had statistics showing otherwise, I would love to see them.
IMF Forecast Sluggish U.S. Growth As Far As The Eye Can See
For those of you into this kind of thing, the International Monetary Fund released its annual assessment of the U.S. economy and it predicts sluggish growth of 2% for the next several years. This means that the IMF doesn’t see much reason to expect interest rates to spike anytime soon. It would also like to see policymakers take steps to improve the nation’s infrastructure, education and tax systems.
On that cheery note, have a great day.