Agreement Highlights Availability Of Basic Banking Services
Attorney General Spitzer today announced a statewide agreement with four major New York banks to ensure that the public knows about the availability of lowcost saving and checking accounts.
The announcement followed a year-long investigation by Spitzer's office that revealed that the banks were not adequately informing consumers about the availability of the accounts, and at times, were dissuading people from opening such accounts.
Under the voluntary agreement, Chase Manhattan, Key, M&T, and HSBC banks will contribute $75,000 each to pay for statewide newspaper advertisements informing the public that state law requires banks to offer consumers a "basic banking account" with the following features:
- An opening minimum deposit of as little as $25;
- A minimum monthly balance of one cent;
- A monthly maintenance fee of no more than $3; and,
- Eight withdrawals, or third-party checks cashed, per month, at no additional cost.
"This agreement will help ensure that all New Yorkers have access to the banking system," Spitzer said. "An additional benefit is that it will reduce the need for people to use more expensive check-cashing businesses."
Spitzer's office found that banks often failed to advertise the availability of the mandated basic banking accounts, but did extensive advertising of more lucrative accounts.
In response to the agreement, the Director of Public Policy Education for the Brooklyn-wide Interagency Council of the Aging, Shirley Genn said: "This will give people of limited means the ability to have affordable bank accounts, access to ATM machines and help end the practice of keeping large sums of money at home. We applaud the banks for making these lowcost accounts available to the public."
In addition to the ads, which will appear in 48 newspapers across the state beginning within the next month, the agreement also requires that the banks advertise the availability of the lowcost accounts within their branches and in brochures and other materials in an "equally conspicuous" manner as they do for all of their other consumer accounts.
In response to the agreement, Russ Haven, the Legislative Counsel for NYPIRG said: "New York's big banks have guarded the fact that they're supposed to offer potential depositors lowcost 'basic banking' checking accounts like it was the plot to the next Harry Potter book. Promoting these basic banking accounts will help bring 'unbanked' New Yorkers into the financial mainstream and provide huge savings for seniors, students, and working families."
The Attorney General's investigation began after a Syracuse-area consumer complained that she was unable to cash a check at a bank because she did not have an account. The consumer was not told at the time that she could open a lowcost account for check cashing purposes.
"I want to commend the four banks involved for working with us on this voluntary agreement which is very good news for working people in New York," said Spitzer. "We intend for this agreement to become a model for all banks in the state."
The case was handled by the head of Spitzer's Syracuse regional office, Winthrop Thurlow, the head of the Investor Protection Bureau, Eric Dinallo, the head of the Brooklyn regional office, Letitia James, and Assistant A.G. Verle Johnson.