Deluxe Chexsystems is a consumer reporting agency that helps banks determine each consumer’s risk level by maintaining a thorough database of individuals who have incurred bank fees and subsequently left those fees unpaid. Obtaining a bank account can prove challenging for a consumer who discovers that a small bank fee he ignored, forgot about or wasn’t even aware of has resulted in his bank reporting him to Chexsystems. Most banks will not offer new checking accounts to consumers whose names appear in the Chexsystems database.
Getting a Bank Account While in Chexsystems is Challenging
Approximately 85% of all banks run a Chexsystems report prior to allowing applicants to open new checking or savings accounts. If an individual’s name appears in the system, basic protocol is to deny the application due to the fact that that individual presents a high risk of financial loss for the bank.
Over 11 million names appear in the Chexsystems database. Once a bank reports a debtor, he will remain in the database for a period of five years. The bank also typically closes that consumer’s bank accounts. Thus, the individual is left with no bank account and no easy method by which to acquire a new one. Even if the consumer boasts decent credit scores, a Chexsystems report is often enough to bar him or her from opening an account with many national and local banks.
Non-Chexsystems Online Banks
For many consumers, “online banking” means far more than simply checking bank balances online. Consumers can now conduct all of their banking activity online without ever needing to visit a physical bank branch. As a rule, online banks are less likely to run Chexsystems reports than physical bank branches. This makes them an ideal option for individuals who need a checking account but cannot obtain one otherwise. Online banks that don’t pull Chexsystems reports include:
- ING Direct
- Everbank
- Clarity Bank
- NBank
- MarketPlace Bank
Banks That Give Checking Accounts to Individuals in Chexsystems
Although most brick and mortar banks will turn down applications from individuals currently in Chexsystems as a matter of simple policy, some will overlook a Chexsystems entry provided the debt in question has been paid in full.
Different banks maintain varying policies concerning approving high-risk accounts. These policies include restricting an individual's banking privileges for a certain amount of time, only overlooking one Chexsystems entry or requiring a the consumer to maintain a certain amount of money in his or her account at all times. Conventional banks and online banks with special programs for those with past Chexsystems debts include:
- HSBC
- Compass Bank
- Charles Scwab
- Guaranty Bank
- Wells Fargo (Opportunity Checking)
- Emigrant Direct
- VirtualBank
- Regions Bank
The Search for a Non-Chexsystems Bank
More and more banks are offering checking and savings account programs for individuals in the Chexsystems database. Banks know these individuals represent a previously untapped revenue stream. Thus, consumers should always call nearby banks to inquire about these programs. Filling out multiple bank account applications, however, will result in a flurry of credit inquiries as the various banks simultaneously pull credit reports. Repeated credit inquiries will damage an applicant's credit scores – making finding a non-Chexsystems bank account even more challenging.
See Also:
Checking Accounts For Bad Credit
Bank Overdraft Fees and Credit Reporting
Sources:
U.S. Government Accountability Office: Investigators Guide to Sources of Information – Electronic Databases
Candice Edwards - Candice Gillingwater is a credit specialist and consumer advocate currently living in Georgia. Her goal is to educate the public about ...
