Checking Accounts Chexsystems – Getting an Account with a Negative Report
If you are unfamiliar with Chexsystems it is a consumer reporting agency (CRA) that retains negative information about the banking history of members who have had problems in the past. For instance people who have bounced checks or who have had their accounts closed by the bank because they were overdrawn. The system identifies account applicants who have a history of mishandling or abusing their accounts. This CRA is similar in nature to the credit reporting agencies that hold credit information that is both good and bad about consumers.
Banks, credit unions and other types of financial institutions subscribe to this system to find out about the histories of the new customers that they take on. Chexsystems is governed by the Federal Trade Commission (FTC) as are the three major credit reporting agencies in the United States. It is governed under the Fair Credit Reporting Act (FCRA).
Not every bank customer gets reported to the Chexsystems. Only those who are reported by their financial institutions will have a record with this system. Those with unblemished banking histories have nothing to worry about because there is nothing to report. It takes up to five years to be removed from the Chexsystems database. Being approved for banking services and products such as a checking account, savings account or a certificate of deposit (CD) may be a problem during the time that you have a report at Chexsystems.
Chexsystems sounds beneficial and it does have its uses. Banks have an easier time detecting fraud and various other abuses. Criminal activities such as writing bad checks can be found very easily and can be dealt with by the proper authorities. The problem is that not all negative banking activity is fraudulent, or shows intentional abuse or misuse. Some people make a mistake with their bank accounts and end up with a Chexsystems report on them when they should not have one.
Opening a Checking Account While in the Chexsystem
It can be discouraging to end up in the Chexsystems but it is not the end of the world. It does not necessarily mean that you are ruined as far as opening a checking account is concerned.
There are a number of reputable online banks that are willing to approve checking accounts to those who are reported to the Chexsystem. It is just a matter of finding the one that is most suitable for your needs.
Etrade Brokerage will approve those on the Chexsystem. Etrade Bank will not so it is important to make the distinction between the two of them. Applicants can open a brokerage account and use it like a regular checking account. By so doing you will be able to order checks just as you would with any bank. If you have a negative Chexsystems report then Etrade Brokerage is worth checking out. To open a brokerage account with this online financial institution a $500 minimum balance is a requirement.
Another bank that you can look into to open up a checking account if you have shown up in the bad books of Chexsystems is Compass Bank. This bank offers a second chance program for those wanting to open personal checking accounts.
The Chase Bank also does its best to help those who get caught in the Chexsystem. It offers an account known as Access Checking that is specifically geared to those individuals with negative reports in Chexsystems. In this case the account holder is not given checks but he or she is provided with a debit card that comes with rewards. If after one year’s time your Access Checking account is in good standing then you will be upgraded to a regular checking account.
Woodforest Bank has a checking account for those who have experienced problems with other banks in the past and who have ended up in the Chexsystem. You cannot apply online for this account but must visit a branch to find out if you possess the right criteria for this type of account. You must open this account with a minimum of $50.00 and you will be charged a one-time set up fee of $9.00.