If you’ve ever been denied a bank account, chances are the decision was made after your banking history was reviewed through ChexSystems, which is a credit bureau that screens consumers seeking to open checking or savings accounts.
Consumers who repeatedly bounce checks, constantly overdraw on their accounts, or stop using an overdrawn account before they’ve paid off the negative balance will most likely be reported to ChexSystems by their bank.
If you’ve been reported, you’ll be considered a liability. Consequently, you won’t be able to open a traditional checking account at any bank that is a member of the ChexSystems network for five years, which is how long a report submitted to ChexSystems remains in their files.
The use of ChexSystems by the nation’s biggest banks has been at the center of an investigation by New York Attorney General Eric T. Schneiderman. Many consumer advocates have expressed concern that the use of ChexSystems keeps low-income consumers and victims of identity theft from obtaining an account.
As a result, Capital One Financial Corporation has agreed to adopt a new set of policies. Capital One will continue to evaluate customers for fraud but will not attempt to predict whether they are potential credit risks.
Capital One was one of six banks, including Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo, to receive requests for information from Schneiderman’s office, reports the Washington Post.
Capital One’s policy changes are expected to take place by the end of the year.