JPMorgan Chase Bank NA has committed to changing its screening policies this year to allow consumers greater access to mainstream financial services.
The new process will permit more consumers to open checking accounts and others to use prepaid debit cards, with the ability to pay bills online or have Chase mail checks for them at no additional charge. These changes will enable card users to pay their rent, utilities and other bills without having to resort to high-cost alternative financial services like check-cashing outlets and money transmitters, state Attorney General Eric T. Schneiderman said in a press release announcing the agreement.
Chase has modified its screening procedures to further expand access to checking accounts for certain consumers who have resolved or paid accounts that were overdrawn or who were unable to pay back their prior accounts because of a previous bankruptcy. Consumers who do not qualify for a checking account are generally not rejected outright but instead are offered the option of opening a Liquid Card account, Chase’s prepaid debit card service.
Chase has committed to making changes to the Liquid Card by the fourth quarter of 2015.
“These new actions on the part of Chase Bank will help expand access to low-cost financial services for consumers across the state. I look forward to working with additional banks to help consumers avoid financial services laden with fees and other penalties,” Schneiderman said in the press release.
According to Schneiderman”™s office, studies show that more than 3 million New York households are either unbanked, meaning that no family member has a bank account, or underbanked, meaning that they have a bank account but also rely on high-cost alternative financial services.
The commitment by Chase comes as part of an initiative launched by Schneiderman in 2013 to expand access to mainstream banking for unbanked and underbanked communities. In earlier agreements with the attorney general, three major banks ”” Citibank, Capital One and Santander ”” agreed to overhaul their use of ChexSystems, a consumer-reporting agency that screens people seeking to open checking or savings accounts. Such databases disproportionately affect lower-income Americans, often punishing them for relatively small financial errors, the attorney general’s office said. As a result, many consumers must resort to alternative banking services to carry out basic financial transactions like cashing payroll checks and paying bills ”” services that cost them hundreds, if not thousands of dollars each year in extra fees.
