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Big bank helps unbanked

By David McMillin ·
Tuesday, June 17, 2014
Posted: 4 pm ET

If you've been denied access to opening a checking account, a Capital One announcement may provide some promising news. The banking giant has entered into an agreement with New York Attorney General Eric T. Schneiderman to stop using information from ChexSystems to predict whether consumers present credit risks. While Capital One will continue to look for past fraudulent crimes in a prospective account holder's history, smaller issues will no longer play a role in approving the new account.

"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."

That lack of equal access has proven very costly for consumers who rely on alternative financial services such as check-cashing services and prepaid cards. In fact, a 2010 study shows that in the Jamaica neighborhood in Queens and the Melrose neighborhood in the Bronx, residents shelled out a whopping $19 million per year in check-cashing fees.

Those expenses have been adding up around the country, too. According to the Federal Deposit Insurance Corp., approximately 17 million Americans do not have traditional bank accounts. While this agreement was struck in New York, Capital One says it plans to implement the practice nationwide. The move already has earned plenty of positive reviews from organizations committed to helping the unbanked population.

"Today's announcement is an important step in the process of reforming how the big banks serve low-income consumers," said Justine Zinkin, CEO of New York-based financial counselor Neighborhood Trust Financial Partners. "At Neighborhood Trust, our clients are regularly denied basic banking services because of errors in ChexSystems or identity theft, and it is nearly impossible to correct these inaccuracies."

Other banks may follow Capital One's lead. The Attorney General is currently looking at how other institutions use ChexSystems and other databases for screening account applicants.

Worried that you might have trouble opening a new checking account? Check out "Opening a bank account with bad credit."

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SUE Sawyer
June 19, 2014 at 2:41 pm

Capital One for years issues checks on unsecure accounts 9those with their credit cards so it should be very easy to issue checks for those who have money in their checking accounts. The only difference is fees--very little for checking and high fees and extra-high interest for unsecured checks. In all the years that I have had accounts--community rooted banks and credit unions are the best overall solution for individuals.

June 19, 2014 at 1:59 pm

Everyone is entitled to their opinion in the USA because our founding fathers believed in god & the 10 commandments. If there is no god that's ok, but if there is a god beware!

June 19, 2014 at 1:08 pm

use a credit union

June 19, 2014 at 11:37 am


Rhada Thomas
June 19, 2014 at 11:03 am

This is nothing new what they are doing. They realize there is untapped money out there and they want a piece of the action that the check cashing industry is getting it just cut throat banking is all.There's a book on the market right now with this same strategy describing how to tap into the un-banked and teach people how to understand finances. How the poor can save capitalism in the name of the book by John Hope Bryant

Rea Campbell
June 19, 2014 at 8:27 am

Though I admire what Capital One is doing, I believe that they should concentrate on lowering their interest rates on their credit cards. I also believe that banking with a credit union is the best way to go when opening a checking or savings account.

June 19, 2014 at 7:44 am

What I find annoying is the minimum deposit required or an average deposit per month that must remain above a lower or minimum limit or else the bank charges fees that are automatically deducted from the account. If one is struggling to keep up with the minimum, that charge shoots you down and makes it more difficult to maintain the minimum. I would imagine it is lucrative for the banks.

Tom Huntley
June 18, 2014 at 10:46 pm

Janet, It is impossible for you to prove that there is no God. Likewise, it is impossible for me to prove that He exists. George Washington believed in God. So did Blaise Pasqual, a renowned physicist and inventor. These men were highly regarded by their peers, and had no need of a crutch. They were also considered by those around them to be highly intellectual, and to possess great leadership qualities. In fact, Francis Collins, MD, PhD, and internationally known researcher, lead the most extensive research ever done on DNA, ref. The Genome Project. For the record, Dr. Collins was once an atheist, and is now a Christian. Since I don't know you, I don't know if you are as smart as any of these gentlemen. That said, my initial thought is that you have never evaluated the evidence of God's possible existence, and that your statements show your possible ignorance on the topic. PROVE to me that God doesn't exist, and you will get both my attention and my respect.

M Bryan Rice
June 18, 2014 at 10:41 pm

Janet's comment reminded me of the story of two fellas, an atheist and an old retired preacher, who were to debate God's existence. The atheist gave his views, sometimes rationally, sometimes very emotionally. The old preacher sat quietly, eating an orange. When the atheist ended his harangue, the preacher said, "Wasn't that a good orange?" The atheist said, "How would I know - I didn't get to taste it." "Exactly," said the believer.

janet english
June 18, 2014 at 8:44 pm

One nation under god was put into the pledge of allegiance back in the late 50s; what's god got to do with anything? firstly there is no such thing as god and secondly, there is no such thing as god. If you need a crutch, buy one.