Do Banks Run ChexSystems to Open a Savings Account?
When you attempt to open a new savings account, your bank may check your credit report or your ChexSystems consumer report before determining whether you are eligible to open an account. Banks are not required to open accounts for everyone and can refuse to open any kind of account for you on the basis of information contained on a ChexSystems report or your credit report. However, not all banks check these reports, and many banks allow anyone to open a savings account regardless of their past credit issues.
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ChexSystems
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ChexSystems collects information relating to deposit accounts and uses that information to compile consumer reports for financial institutions. ChexSystems activities are governed by the Fair Credit Reporting Act and applicable state laws even though ChexSystems does not provide actual consumer credit reports. When you refuse to settle an overdrawn deposit account, most banks notify ChexSystems and details of the incident are added to your consumer report. ChexSystems also keeps records of other kinds of "account abuse" such as fraudulent activity or repeated overdrafts.
Identification
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Banks requesting a report from ChexSystems on a particular individual have to provide ChexSystems with the consumer's name, Social Security number and driver's license or state identification card number. If the information provided does not match the ChexSystems record the bank may still allow you to open an account if you can provide other forms of identification. Contact ChexSystems directly to request any necessary changes to your consumer file; by law ChexSystems must update its files.
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Savings Accounts
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When you open a stand-alone savings account your bank does not provide you with a debit card. Additionally, if you open a regular savings account rather than a savings money market account, you do not receive checks. Therefore, you can only access funds in your account by making in-person withdrawals at the bank. Consequently, savings accounts are harder to overdraw since you do not have to keep track of various types of withdrawals from your account. Due to the reduced likelihood of overdrawing savings accounts, many banks let people who have a history of past account problems open these accounts.
Considerations
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If you are unable to open a savings account due to negative information contained on your ChexSystems report, you should attempt to settle the debts that are preventing you from establishing new accounts. When you settle a debt, the bank involved must notify Chexsystems and ChexSystems must update your report to show you settled the debt. Reports can remain on your ChexSystems file for five years, but banks usually allow you to open new accounts once your ChexSystems report shows that you have settled your debts.
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