Santander’s Deal To Ease Bank Account Access

Santander Bank will relax its standards for approving new checking and savings accounts under a deal announced on Friday (Feb. 20) with New York’s attorney general.

The change, which will be in effect by the end of September for Santander nationwide, is designed to prevent overly strict screening from blocking the availability of banking services to potential customers who have a small number of bounced checks or other minor blemishes on their banking histories.

The goal of the agreement is to reduce the number of people forced to use expensive alternatives such as check-cashing services.

“No one should be denied a bank account because of a bounced check from years ago,” New York Attorney General Eric Schneiderman said in a prepared statement. “Denials like these force low-income Americans — and New Yorkers in particular — to resort to high-cost alternatives to banks, simply because of a small financial misstep in the past.”

Santander has joined Capital One, which made a similar agreement with the New York A.G. last June, and Citibank, which cut its own deal last month, in adopting new policies for its use of the ChexSystems reporting system. ChexSystems, which is owned by FIS, provides banking histories of consumers based on information it’s given by its subscriber financial institutions.

Santander currently judges basic checking-account applicants using a scoring product that screens for the risk of loss and fraud, Reuters reported. Under the new agreement, Santander will still screen potential customers for past fraud. However, it will no longer reject applicants for so-called “account abuse” that involves isolated or minor banking errors, such as paid debts or small overcharges. The bank will only check for whether an account was closed due to a report of earlier fraud, or for Santander accounts that were overdrawn, closed and not paid back.

Schneiderman’s next big-bank target in the campaign against overly strict account-opening standards is likely to be JPMorgan Chase, according to Reuters, which cited an unnamed source.