The Consumer Financial Protection Bureau on Wednesday urged the 25 largest retail banks to make checking and saving accounts accessible to millions of unbanked Americans and help customers avoid overdraft fees.

Checking accounts and prepaid reloadable accounts make it easier for consumers to receive wages and benefits, make payments and manage their finances, the CFPB said in the letter.

"Unfortunately, however, many consumers - including those with limited or irregular incomes - struggle to manage their spending, avoid unwanted fees, repay overdrawn balances and maintain these critical accounts,” states the letter, which added that someone who has an account closed for a negative balance can often struggle to open future accounts and thus be shut out of the banking system.

The CFPB estimates that 10 million Americans don’t have deposit accounts.

The letter came ahead of a field hearing in Louisville, Ky., in which CFPB Director Richard Cordray warned that too few banks and credit unions offer accounts that either block charges that would result in an overdraft or otherwise seek to prevent consumers from over-drafting their accounts. Even many institutions that do offer such accounts do not advertise them, he said.

"Overdraft programs have become a significant source of industry revenues," said Cordray, according to a text of his prepared remarks.

In prepared remarks, he said that many consumers may be denied a checking account because banks and credit unions increasingly rely on third-party reports of a consumers' checking account histories to screen potential customers - reports that the agency has said give consumers insufficient ability to dispute or even view.

"We are concerned that some people are being inappropriately sidelined by two things," Cordray said. "The first is the lack of account options that fit their financial needs and situations. The second is inaccurate information used to screen some potential customers."


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