Citibank, a division of Citigroup, reached an agreement with New York Attorney General Eric Schneiderman to take a more merciful approach to screening for savings and checking accounts. Schneiderman wants to prevent situations in which those who need financial services are penalized for minor violations and have to rely to higher-cost alternatives.
Citibank will still access ChexSystems for its data, but will undertake analysis differently and will be more forgiving of minor breaches. ChexSystems monitors bounced checks, suspicious account activity and unsatisfied balances. Under the new rules that go into effect in March, clients will only be turned down if they have two or more violations in the past few years.
The Attorney General said in a statement, “No one should be disqualified from access to a bank account because of a bounced check from the 1990s or because they were a victim of identity theft.” An investigation showed a higher proportion of New York households “unbanked” than the national average. In New York state 9.8% of all households are unbanked compared to 7.7% nationwide. The remedy lies in making financial services more available to people who ordinarily would not have access.