Santander Bank on Friday agreed to stop a policy that often kept low-income people from opening checking or savings accounts.
Santander, which has several Boro Park branches after it bought out Sovereign Bank, becomes the third bank to do away with such policies in an effort to accommodate millions of the “unbanked” who must rely on expensive alternatives for everyday banking.
The controversy involves ChexSystems, which is used by most banks to screen applicants when they apply to open a new account. It is similar to credit reporting agencies but it focuses on bank history instead of credit cards and loans. It keeps a database on whether an applicant has a history of bouncing checks or using overdrafts.
ChexSystems has come under political and media scrutiny recently. Applicants who may have bounced one check 10 years ago were still being denied a chance to open an account. So were some who created an overdraft but promptly repaid the bank.
By comparison, most negative items on a credit report fall off after seven to 10 years, even bankruptcy.