Rehab for Check Bouncers

Credit counseling agency members of the National Foundation for Credit Counseling are rolling out a new educational program for chronic check-bouncers. In partnership with e-Funds Corp (Scottsdale, AZ), selected counseling agencies are offering the Get Checking program, a merit program for consumers who have had their bank accounts closed for failure to pay outstanding checks. The American Banker reports that the program started in Milwaukee in 1998 and was set to kick off in Los Angeles, Boston and Minneapolis in late August of this year. E-funds hopes to introduce the program to members of its ChexSystems check-tracking network in 100 cities by the end of 2001.

Here is how it works in Los Angeles. For a $45 fee, consumers with closed bank accounts can take six hours of classes from the Consumer Credit Counseling Service of Los Angeles. Upon successful completion, participating banks such as Wells Fargo and Bank of America will let consumers open a new checking or savings account at their Los Angeles branches. Otherwise, consumers would have to wait as long as five years before a bank would permit them to open a new account. Bonnie Breeze, consumer affairs manager at e-Funds, told the American Banker that the banks in the Milwaukee program have reported that almost all the graduates who opened bank accounts have avoided repeats of past problems. Joseph Onesta, director of education for the counseling agency in Los Angeles noted that banks get at least two benefits from participating. First, (and perhaps most important) they get Community Reinvestment Act credit. Second, he says, "The banks that are participating in this know that if they can help get somebody an account, it brings a lot of brand fidelity.... Consumers in the program would be very likely to consider going to that bank first for an auto loan, a credit card or a mortgage."