New York probing banks over unfair database usage

2 August 2013

New York's attorney general is investigating six of the top US banks over allegations they are unfairly using databases to screen customers before giving them accounts.

The New York Times reports the institutions have been disqualifying people wanting to open checking or savings accounts.

Bank of America, Citibank and JP Morgan are among the firms that have received letters from the state's attorney general Eric Schneiderman. The banks reportedly have until Tuesday (6 August) to schedule a meeting and discuss the matter.

Financial institutions and credit unions are running stringent checks to protect themselves from risky customers and fraud. However, the databases these banks are using disproportionately affect lower-income Americans, according to state authorities and consumer advocates.

The newspaper claimed negative reports in the databases have removed more than a million lower-income Americans from the financial system and forced them to use costly operations to pay bills or cash a check.

By Tony Aynsley

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