It was recently found that JPMorgan Chase Bank, N.A. (Chase) breached the Fair Credit Reporting Act (FCRA) by improperly providing consumer deposit account details to specialty consumer reporting agencies. These agencies, also known as checking account screening companies, compile information on consumer deposit account usage. More details about the settlement are available in our press release.
When applying for a new checking or savings account, banks or credit unions often consult a checking account screening company. These entities gather and share negative information with financial institutions, such as accounts closed due to unpaid overdrafts or fees. If there’s no negative information about you, you typically won’t have a checking account report.
If past checking account issues have occurred, it could lead to denial when you try to open a new account. If this situation arises, here are some essential tips to help you gain access to needed financial products and services.
Tip One: Understand Your Checking Account Report Unlike the major consumer reporting agencies—Experian, Equifax, and TransUnion—that usually don’t cover checking account or check-writing history, there are screening companies that do report on negative banking histories. Companies like Chex Systems and Early Warning Services fall into this category.
Denial of a bank account may be due to negative information about your banking history held by these screening companies. This could be due to previous accounts with unpaid negative balances, suspected fraud, or having been a joint holder with someone who had such issues.
You’re entitled to free copies of your checking account reports every 12 months from these agencies. We’ve compiled a list of these companies and how you can obtain your reports.
Additionally, if you’re denied a bank account and receive an “adverse action” notice, you have the right to a free report from the screening company cited in the notice. This allows you to request and dispute any inaccuracies in your report.
We provide sample letters for disputing inaccuracies on your checking account report or information provided by your bank or credit union.
Tip Two: Explore Bank or Credit Union Solutions for Opening an Account Financial institutions have different policies on how your checking account report affects account opening. Some may require settling old debts first. Many offer accounts and prepaid cards designed to minimize overdra$ risks. Our guide can help you choose a lower-risk account.
Tip Three: File a Complaint if Needed If you encounter issues with credit reporting or scores, checking accounts, prepaid cards, or other financial services, you can file a complaint with the CFPB. We will forward your complaint to the company and aim to get a response within 15 days.
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