More than a million Americans have been effectively blacklisted from the mainstream financial system because they overdrew their accounts or bounced a check — mistakes that routinely bedevil young and low-income consumers, financial counselors say, the New York Times DealBook blog reported today. Databases, used by Bank of America, JPMorgan Chase and other big banks, were intended to weed out serial fraudsters. Now, regulators say, banks are screening out potential customers and swelling the ranks of the so-called unbanked — the roughly 10 million households in the United States that lack even a basic bank account. New York’s attorney general today will become the first government authority to take aim at how banks use the databases. The attorney general’s office is expected to announce that Capital One has agreed to fundamentally change the way it uses the largest database, ChexSystems, barring only customers who land in the database for fraud.
