The CFPB added it is concerned about inaccuracies and inconsistent information that financial institutions provide to reporting companies. Banks and credit unions should expect accurate information from checking account reporting companies in order to make fair assessments of deposit account applicants, and if the system is tainted with incomplete, inconsistent and inaccurate information, they cannot make informed decisions, the bureau noted.

“Consumers should not be sidelined out of the basic banking services they need because of the flaws and limitations in a murky system,” Cordray said in the bulletin. “People deserve to have more options for access to lower-risk deposit accounts that can better fit their needs.”

Additionally, the bureau penned a letter to the 25 largest retail banks, calling on the financial institutions to make lower-risk accounts more accessible to more consumers in order to help prevent overdrafts.

“At credit unions, which are member-owned, not-for-profit financial cooperatives, members come first. Credit unions work every day to ensure that their members have the information and services that will help them meet their financial goals,” NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt said in a statement. “Credit unions remain the best choice for consumers seeking low- or no-fee checking, and the majority of those offering overdraft services also offer alternatives such as overdraft lines of credit and linked savings accounts."

Pew Charitable Trusts Consumer Banking Project Director Susan Weinstock said, “This letter is an important step in pushing the banks to offer safe and transparent accounts, but, ultimately, what is most important for protecting consumers will be new CFPB rules on overdraft. Our research makes clear that the bureau needs to move forward with these new rules expeditiously.”

At Wednesday’s field hearing, Cordray described the audiences that need lower-risk deposit accounts. Among them are consumers who are screened out of potential accounts due to past history issues; consumers who chose to drop out of the banking system due to higher fees “they did not anticipate or, in hindsight, wanted to avoid”; and young adults entering the banking system who are at higher risk of losing control of their spending.

Cordray added, “Some banks that have added lower-risk accounts to their offering have expressed surprise at the strong uptake they have seen from millennials in particular with these accounts.”

The director said institutions that have unnecessarily limited their product choices “have missed a substantial segment of the population rather than finding a way to include them and help develop their economic potential.”

By not providing services to young people just entering the financial system, financial institutions “may be missing an opportunity to build loyalty and dispel prevailing mistrust of the banking system,” Cordray said. “That is not charity at all; instead, it is a hard-headed business judgment that takes the longer view and seizes opportunities to build sustainable customer relationships.”

In addition, the CFPB released resources for shopping for lower-risk checking and prepaid accounts that do not authorize consumers to exceed their account balances. The CFPB also released a consumer advisory on what consumers should do if they have been denied a deposit account or have an involuntary account closure.

The advisory told consumers how to obtain a copy of their checking account history, dispute items with a consumer reporting company, dispute items with a bank or credit union that reported inaccurate information and shop around for lower-risk products.

Download and read the consumer advisory here.

“The Consumer Financial Protection Bureau is in a unique position to make a difference in improving how the checking account reporting system actually works,” Cordray said. “We are the only federal financial regulator with the authority to supervise both the larger depository institutions and the larger consumer reporting agencies for compliance with federal consumer financial law. Thus we can consider and address these issues comprehensively, engaging directly with both sets of industry participants.”