08/30/2013 05:38 pm ET Updated Oct 30, 2013

Bad Banks

Those of us who work with low-wage workers have had a busy -- and satisfying -- summer.

We have supported fast food workers who took the brave step of organizing strikes in New York and across the country with the simple demand of raising workers' poverty level wages to $15 and for the right to unionize after companies in that $200 billion industry refused to negotiate. We have supported the "carwasheros" who have fought for better wages, safe working conditions and workplace justice. Workers at seven car washes have voted to join the Retail, Wholesale and Department Store Union (RWDSU) with more on the way. We also have won close to $1 million in settlements for grocery store workers in Brooklyn, we stood with the men and women who guard and provide services at our airports - and there is plenty more to come.

But things can get worse - even when they seem to be getting better. Recent reports have jolted us back to the reality that our work is far from done. Many of the same workers who are bravely standing up for their rights on the job are being denied bank accounts. The New York Times reported recently that banks have blacklisted and routinely denied more than 1 million low-income workers bank accounts for up to seven years through the use of private databases that track even relatively minor offenses.

According to The Times, the use of those private databases "is contributing to the growth of the roughly 10 million households in the United States that lack a bank account, a basic requirement of economic life."

So not only do these hard-working men and women have to get by on poverty wages, barely surviving while living paycheck to paycheck, but they face the prospect of not being able to get a bank account for "relatively minor banking missteps, like overdrawing accounts, amassing fees or bouncing checks." One Brooklyn woman told The Times she can't open a bank account because she made a $40 overdraft three years ago - even though she repaid it.

The banks, which include Bank of America, Citibank and Wells Fargo, created these databases some 20 years ago, mostly to weed out what The Times called "serial fraud artists," but has increasingly been used to target low-income folks. This means many low income families have been forced to use costly services to cash checks or pay bills, which siphon off more of the little money they have left after paying rent and utility bills and buying food and clothing.

As unjust as this is, I can't say I was shocked by it.

Nearly two years ago, UnitedNY published a report detailing how banks squeezed out hundreds of millions of dollars in extra profits from government agencies like the Metropolitan Transportation Authority through interest rate swaps, complex derivatives intended to keep down interest costs related to municipal debt. It's bad enough these deals are a huge drag on the public, but it turned out the banks manipulated interest rates through LIBOR -- the London Interbank Offered Rate -- to keep interest rates artificially low, putting the agencies on the hook for whopping payouts. Investigators in the U.S. and Europe have leveled charges against several banks and three have paid around $2.6 billion to date to secure civil settlements in the rate-rigging scandal.

And don't forget the billions we taxpayers -- including those low-wage workers who can't get bank accounts -- had to cough up five years ago to bail out banks after the 2008 financial collapse, something the banks caused in the first place.

To his credit, New York State Attorney General Eric Schneiderman has launched an investigation into the banks' use of those private databases that unfairly target and blacklist low income families.

The banks have never been held fully accountable for causing the 2008 financial collapse and some still have not answered for the rate-rigging scheme. If Attorney General Schneiderman finds wrongdoing - and holds the banks responsible for their actions involving the blacklist of a million low-income workers - it may be just enough to get back to feeling good about this summer.