According to an article from the Wall Street Journal, Bank of America has announced that it is using a custom software database that has been created by a top financial regulator. The goal is to flag any potential payday lenders that could violate New York state laws.
One of the challenges that Bank of America and other financial institutes run into is the possibility of working with a merchant customer that may be engaged in illegal lending. By using this database, the bank will be able to identify any lenders that have issued illegal loans to customers in New York and notify other financial institutes of this. This will prevent them from taking an unnecessary risk.
Andrew Plepler, the Global Corporate Social Responsibility and Consumer Policy executive for Bank of America, told the news source that this tool will help protect customers from "predatory lending practices."
"In the past, merchants have been responsible for their own compliance with laws and regulations specific to their industry," said Marsha Jones, president of the Third Party Payment Processors Association, which represents processing firms. "Recently there's been an expectation that banks and processors should know every law in every state for every industry, and that becomes problematic. It's impossible to keep track of all of that, and be able to process efficiently."
With the use of custom database software, any organization can find a better way to deploy information. While not every company is trying to stop crime, there are plenty of better practices that can be had by using this idea.