New Orleans      The Federal Consumer Protection Bureau is looking into the issue of “blacklisting” by banks when some consumers try to open checking accounts.  If you are lucky, you may ask, what are they talking about, aren’t banks in the business of providing customer service through individual checking accounts?  Oh, child, you are so “old school,” 1980’s, and yesteryear.

Many big banks argue that they lose money on personal checking accounts.  At best it’s a loss leader of sorts.  They want them because they need the deposit base in some cases, but in most instances checking accounts have become little more than the way banks access your money to charge excessive fees for every little thing.    It starts with the monthly service charges that suck out your minimum balances and then there are the overdraft charges that can range up to and over $35, and that’s not counting the fact that many banks are all too willing to let scammers hit your account for predatory and multiplying charges, sell your info for credit card solicitations, many of them from their own subsidiaries, and often nearly rob you blind.

An FDIC survey reveals 65% of banks deny checking account applicants who have prior mismanagement in their consumer reports.  “A consumer who bounced a check once is not a deadbeat, a consumer who bounced a check once may not even have made a conscious mistake,” said Ed Mierzwinski of the National Association of State Public Interest Research Groups.  Mierzwinski said potentially millions of Americans are “blacklisted from banks” and consumer advocates worry financial institutions could be shutting out some people whose records were dinged by accident.  “There could have been an automatic payment that the consumer had canceled but the company by mistake continued to try to take out of their account, and that is happening more and more often today,” Mierzwinski said.  Federal law says you can request a free banking history report each year, and dispute any incorrect information. Chex Systems said if consumers find errors it is “committed to resolving all such disputes as quickly as possible.” Early Warning declined comment.

            This is a good thing for the FCPB to investigate.  Who reads the fine print, but when you open an account you give the bank the right to reject you as a customer unilaterally without cause or explanation.  With the huge databases out there, banks who are pre-screening new accounts might take a bounced check or overdue payments from your teenage years and block you from an account for years.  And, despite the fact that the devil lives in these details, as predatory as banks have become, not having an account at all exposes a consumer to even more difficulties in bill payment, establishing credit, and even receiving their paychecks electronically in many companies.

            Damned if you do, damned if you don’t.  Some protection and minimal, enforceable, easily accessible rights would be welcomed because the news everyday proves repeatedly that we need help and protection in dealing with banks.