A push to return to basic finances
Americans, if they want, can bank with their smartphones, open various retirement accounts, utilize sophisticated tax-shaving strategies and invest in all sorts of securities. Wealthier individuals can speculate with options, hire hedge-fund managers and take advantage of complex insurance and estate-planning vehicles.
But forget all that complicated stuff for the moment.
Mindful that a lot of people are falling behind in financial matters or never really got started, the federal government has been making efforts just to get more Americans to square one with their money. Here are some examples:
Improving low-fee accounts
It’s not all that difficult to open a checking account at a bank or credit union, or to manage it effectively. But recent studies have indicated that perhaps one-quarter of the adult population either lacks standard bank accounts or doesn’t use them well, often incurring avoidable charges such as overdraft fees.
The Consumer Financial Protection Bureau recently took steps to improve consumers’ access to checking accounts amid concerns that many people don’t have good account options or are being prevented from opening accounts because of customer-screening records that contain inaccuracies. The federal agency recently sent a letter to 25 large retail banks urging them to make available deposit accounts that help customers avoid overdraft charges while not presenting high risks for the banks, either. The CFPB also issued a bulletin reminding banks and credit unions about their obligation to meet accuracy guidelines when they report negative customer-account information to credit bureaus.
“Consumers should not be sidelined out of the basic banking services they need because of the flaws and limitations in a murky system,” said CFPB Director Richard Cordray in a statement. “People deserve to have more options for access to lower-risk deposit accounts.”
Many banks and credit unions screen account applicants with information provided by checking account reporting companies, which accumulate information on involuntary account closures, bounced checks and so on. The screening process helps financial institutions identify and reject potentially risky
See WILES, Page 3E