That might be your problem. Why should they give you another account if your current accounts are going unused? I get that the interest is higher, but they might view several dormant accounts as a risk.
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I sent a summary of this to Lehtoâs Law. Lets see if he replies.
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Some of the federal laws at play are:
- Fair Credit Reporting Act - âAdverse Actionâ requirement requires that the denial of a checking account if based on a credit report be accompanied with an identification of that report and a way to get a copy. However, youâre saying T-Mobile says no credit report was used. Not sure if you can contact Chexsys to see if they pulled a copy.
- Equal Credit Opportunity Act - Requires a specific reason be given if denied an application for credit. Doesnât sound like thereâs a credit component to this application.
I imagine youâll get something in writing in the mail. See what it says.
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Thatâs likely it. If they already have you as customer, that proprietary information may be their whole reason for not offering you another account. And it may also be based on previous behavior on these existing accounts (how much money you cost/made them).
That could also explain why they did not offer a copy of a ChexSystem report. Maybe they simply did not need to pull that report based on atikovi being an existing customer.
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maybe they have legit reason to deny him.
Or maybe they donât. Maybe theyâre denying him based on incorrect data in their internal systems. Maybe theyâre denying him due to illegal discrimination that they want to hide.
We donât know because theyâre hiding behind the word âproprietaryâ.
I guess next time I deny a tenant a rental application Iâll use âproprietaryâ for the reason and see how far that gets me.
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Sounds fair to me. What could rejected tenants do to prove discrimination? Theyâd have to collect rejections from other tenants with similar profiles to show a pattern of discrimination. Good luck with that consider the profiles themselves are personal information they wonât be given access to.
There was a similar case for Harvard University admissions with plaintiffs arguing that Harvard was discriminating against Asian students, race being a protected class. The lawsuit was ruled twice against the plaintiffs and Harvard was not found to unduly discriminate against Asians. What helped the ruling in their favor was that their process was conveniently opaque and proprietary and it was very hard for the plaintiffs to prove anything even with statistics showing decreasing admission rates for Asian students.
So take home message, if youâd like to discriminate, keep your process as opaque as possible. And of course from a business standpoint, it does not make any sense to reveal your acceptance criteria either.
For credit apps, they have to give you a reason, but it doesnât have to be a specific enough reason to be helpful.
âPrevious unsatisfactory relationship with bankâ
âRejected based on info in your credit reportâ
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I donât have any desire to illegally discriminate.
But I do stand by my policy of no face tattoos. Even Oregon hasnât made face tattoos a protected class ⌠yet
Seriously though as a landlord youâll eventaully run into a tenant that immediately screams âdiscriminationâ when you reject them. I think the burden of proof is on them though. But just to be safe its best to stick to standard application process and screening criteria for everyone. Iâve been able to weed out 100âs of applicatns just by asking a few simple (legal) pre-screening questions. e.g. income,credit history, do you hae an eviction/ bankruptcy, etc.
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But back to atikoviâs case, there is no indication of illegal discrimination either.
For the tenants you reject, do you have to disclose all the reasons why you rejected them? Do you detail how you weight credit history vs income vs evictions/bankrupcy, etc.? Or keep it solely to only what youâre legally required to tell them?
Like you said, the burden is on them to prove discrimination. And I think it offers less ammunition to only give them the strict minimum required by law. I think thatâs also the position of most banks/lenders when it comes to bank accounts, credit cards or loans.
Or discriminate against smart people who donât like to claim victimhood. :-)>
Yes, but imagine if âthemâ is the DOJ. Then, the burden becomes much less burdensome.
Wouldnât it be easier to discriminate against dumb people? It seems to me theyâd be much less likely to come up with evidence, no?
Getting the DOJ to get involved in rejected tenant application vs. landlord dispute would probably be the main hurdle though.
Sure from the side of the banks / landlords the person taking applications and rejecting them is going to do what they are required and is safer legally usually. So for me that means I keep it to just financial facts and avoid rejecting people for anything that isnât explicitly allowed. (eâŚg I might reject dog owners if theres âno petsâ )
Banks too would smartly do the strict minimum requried by law as far as explaining WHY they reject consumers.
I donât blame the bank for this its kinda smart to hide behind âproprietaryâ cause the less said the better. If theyâre not legally required to say why then its smarter for them to not.
BUT on the other side of that is the the consumer. Whats best for banks is sometimes not in our interest⌠There are various reasons weâd want to know WHY we were rejected for a bank application. Key of which I think is that credit bureaus often have incorrect data. So if weâre rejected by a financial institution based on credit then theres a decent % chance thats due to a credit bureau data error. Same with ChexSystems data. Similarly if banks are rejecting us based on their own secret formula then theres probably a % chance that their data is in error. If we have a right to know that credit bureau data errors are causing us financial problems as consumers then I think weâd also have a reaosnable right to know that banks arenât making similar errors. Seems fair. I mean banks arenât perfect and make errors soâŚ
Plus theres also history of banks actually discriminating based on their internal processes. redlining was a good example. So weâve got reason to wonder. Theres a minority of landlords who are outright racists and would discriminate as well so cause for worry there too.
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Absolutely agree. This is why youâre entitled by law to a copy of the report that was pulled if youâre denied for a credit card or when a bank pulled ChexSystems. Exactly for the purpose of people being able to notice errors on their records and getting them fixed so they donât keep getting denied. I think thatâs a vital customer protection although a bit less useful for credit applications now that there are so many ways to get credit scores and reports for free multiple times a year (including one free report from each bureau per year).
But as long as your records are accurate, then I donât see why banks/lenders should have to tell you what internal red flag you tripped that made them deny your application. Itâd be nicer than feeling like the decision was arbitrary. But theyâd open themselves to people simply lying on applications just to fit the correct profiles.
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Easier to discriminate, yes. However, smart people (Asian-Americans in this case) donât get the support of the DOJâs anti-discrimination division.
I know of at least one court that has said âprevious unsatisfactory relationship with your bankâ is not good enough. I donât think ârejected based on info in your credit reportâ would fly either.
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Could you provide the source? I thought a bank would be within its right to not extend service to someone whoâs been proven to cause them high losses.
Youâre correct that it cannot be too vague or indefinite. They have to tell you more specifically which metric(s) you failed. But Iâm not sure they have to tell you all of them though. I mean if they said âyour credit score is too low.â, do they also have to tell you the whole list of issues that possibly led to the score being too low (like you have recent delinquency, your utilization is too high, and your history is too short)?
In Chen v Chase the Northern District of California held that âprevious unsatisfactory relationship with this bankâ is not sufficiently specific - Chen v. Chase Bank USA, N.A., 393 F. Supp. 3d 850 | Casetext Search + Citator
They donât need to tell you every reason why the account was closed or application denied, but they do have to provide the principal reasons. The regulator says that more than 4 is unlikely to be productive.
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Thanks for the source. So the case is not that an unsatisfactory relationship is not an acceptable reason, it is that it is not a specific enough description of the unsatisfactory relationship. That makes me wonder how a bank would specifically phrase it, say in the case of a borrower who caused them too high losses via their reward program due to MSing.
That would be more specific than âpreviously unsatisfactory relationshipâ.
A credit score is a third-party metric. If they tell you your score is too low, then you are entitled to then ask the agency providing that score for reasons why your score is not higher.
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I actually think the bank has to give you a copy of the actual credit report they pulled. The idea there is if you were denied because of errors on it, thatâd give you an opportunity to notice the error and have it corrected for future applications.
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