BofA to Make It Easier to Reopen Accounts

Under pressure from consumer groups, Bank of America is expected to announce today that it will make it easier for consumers with past credit problems to reopen their bank accounts. Banks have been under fire in recent months for their longtime policy of refusing to open checking accounts for individuals who have been reported to Chex Systems Inc., a widely used credit database of consumers whose bank accounts have been previously closed for fraud, check kiting or overdrafts. About 80% of U.S. banks use Chex before opening new accounts. But critics complain banks have been too harsh, sometimes preventing low-income consumers from getting bank accounts for up to five years because they bounced a single check. Under the new policy, BofA said, consumers will be able to reopen accounts after only three years, as long as they did not commit fraud. Those who repay the overdraft can reopen accounts in one year. And those who repay the overdraft and agree to credit counseling can reopen accounts immediately. Other banks are expected to announce similar practices.