Capital One, the fifth biggest U.S. credit card lender, has announced that it will be limiting customer screen databases that had previously barred many low income consumers from getting bank accounts. Capital One will no longer be using ChexSystems, a computer program that is currently used to screen applicants opening checking or savings accounts to determine whether they pose credit risks. The changes to Capital One’s policies are expected to take effect by the end of 2014, and they will be implemented nationwide.
Many believe that ChexSystems, and other fraud screening tools, unfairly exclude low income consumers and victims of fraud. It can make it much harder for them to get approved for checking or savings accounts, because they are automatically screened out due to the computer program. As a result, Capital One is taking steps to resolve this problem, the first of which is ending the use of ChexSystems. The change to Capital One’s policy will expand access to critical banking services that Capital One provides. Other major banks are expected to follow suit, so low income consumers will not have an unfair disadvantage when it comes to their finances.
Source: Bloomberg News
