CFPB Asks Banks to Improve Checking Account Options
In an effort to help consumers get better access to checking accounts, the Consumer Financial Protection Bureau is encouraging banks and credit unions to offer lower risk checking accounts to their customers. The CFPB issued a letter to the 25 biggest retail banks, asking them to improve screening inaccuracies and provide better account options to help consumers avoid overdraft fees.
According to the CFPB, nearly nine out of 10 American households have at least one checking account, but the Bureau estimates that almost 10 million American households do not have a checking or savings account. This may be due to the screening process used by the financial institution. Some of this is the result of the focus banks and credit unions put on the screening process. The CFPB believes many consumers are denied access to checking accounts because of inaccurate information used during this screening process. By improving reporting practices, more consumers may have access to the banking opportunities they need.
Next Wednesday, the CFPB plans to issue a bulletin warning financial institutions about their legal obligations to report accurate information about negative account histories, so consumers have a fair chance at opening a new bank account in the future.
In addition to petitioning banks and credit unions, the CFPB is encouraging consumers to be proactive about their financial histories. The Bureau is asking consumers to request copies of their credit reports if their application for a checking account is denied, so they may dispute any inaccurate information on the report. Furthermore, the CFPB is asking consumers to seek out low-risk checking accounts that do not carry an overdraft fee so they can avoid hefty costs that may hinder them from getting an account in the future. The average overdraft fee in America is $33.07 per transaction.