Santander Bank has reached an accord with the New York Attorney General Eric Schneiderman to amend the way it screens applicants for savings and checking accounts.
After Citibank and Capital One, Santander is the third lender to ink such a deal with New York.
Opening accounts becomes tough for lower income consumers with Santander’s current screening process, which compels customers to rely on high-cost alternatives such as check-cashing outlets.
Under the deal, Santander has agreed to implement new policies governing its use of ChexSystems, which is a consumer-reporting agency for analysing banking histories of consumers applying for accounts.
Schneiderman said that such databases often penalize lower-income consumers for small financial errors.
Santander’s managing director of retail banking Maria Tedesco said that the deal will "make it easier for consumers who might have been denied services based on their banking history the ability to open checking or savings accounts."
According to a copy of the agreement received by Reuters, Santander currently uses a scoring product for basic checking account applicants that screens for the risk of loss as well as fraud.
The bank will now only screen to check if an account was closed based on a report of earlier fraud, or for Santander accounts that were overdrawn, closed and not paid back.