It’s pretty well-known out there that ChexSystems is basically the watchdog of the banking world. This is the database that all banks (well depending on the estimates, anywhere between 80 and 90 percent) report to whenever there has been an issue with someone’s bank accounts. This issue can be repeated overdrafts, unpaid overdrafts, or fraud, and so on. When that happens, your information gets sent over to ChexSystems, who maintains a database of all such reports. Every time a prospective customer shows up to open a new account, their name is compared to the database to figure out if there are any known issues with them. If there are, chances are that they will get denied the chance to open a new bank account.

Related: How long does your name stay on Chexsystems’ database?

We know that most big banks use ChexSystems, but we wanted to know specifically how different banks handle it. So we made a call to Citibank’s customer service to clarify things. Here’s what we found out:

Do they use Chexsystems?

Yes, they do

What options are available to someone who has their name on ChexSystems and wants to open an account at Citibank?

They have to clear out the issue with ChexSystems first

What if the person paid off an overdraft that caused them to get listed and can prove it?

They should go to the bank that reported them and have that bank have their name removed from ChexSystems’ database

Is the ChexSystems policy company-wide or do the branches have some leeway?

All applications are processed through ChexSystems. For the ones that are made by phone or online, you get denied automatically if your name is on the so-called “black list”. For applications that are filled out in a branch, we could not be given a definitive answer as to whether or not someone at the branch would have the authority to approve opening an account even if the prospective customer is on ChexSystems. We’re inclined to think that there wouldn’t be much in the way of flexibility, but you never know. It might be an option worth pursuing.

Related: Banks that don’t check your credit

Does Citibank Use ChexSystems? Their Customer Service Answers

If you have had problems in the past with a bank, and have had your account closed as a result, your information has probably been reported to ChexSystems. What that means is that out of all the banks operating in the United States, an estimated 80 to 90 percent of them will refuse to do business with you. In case you didn’t know, ChexSystems is a database that banks report to and share information with, so that they can verify prospective customers’ information before making a decision on whether or not to open new bank accounts for them.

When it comes to the major banks, they all take a look at ChexSystems’ database before opening new checking or savings accounts. It is a well known fact that smaller banks are more likely to take a risk than big, impersonal banks. So even if you can’t open a bank account at Bank of America, you will almost certainly find a regional bank or credit union that will open you an account. If even that is not an option, you can always look into prepaid debit cards, which will offer you many of the same features a “regular” bank account would.

Related: Banks that don’t check your credit to open new accounts

Does Bank Of America Use Chexsystems?

While we would love to be able to give a clear-cut answer to that question, it’s actually not a black or white type of situation. There all different circumstances that can come into play and influence the outcome, depending on your personal financial picture. Let’s take a look at each possible answer.

First answer: NO

This one, although the least popular answer, is probably the most likely one. In most cases, the person doesn’t find out that they can’t open a checking account until they’ve actually been to a branch to do so, and were declined. The majority of banks in the United States use a database called ChexSystems to screen prospective clients. If your name shows up on that database, that means that a bank has had a negative experience with you and has reported your name to ChexSystems. The particular case we’re looking at, unpaid debt, is definitely one that can get a bank to report you.

As for how long your information stays on Chexsystems, well unless corrective action is taken, that info stays there for five years, after which it is purged. In that time frame, it gets very hard to open new checking accounts, because an estimated 80 percent of the banks use Chexsystems and will turn down your business if you’re on that list.

Second answer: IT DEPENDS

Some banks, known as non chexsystems banks, do use ChexSystems but don’t automatically turn you down if you’re on that list. They tend to be the smaller and/or regional banks. You may have to jump through a few hoops but they will hear you out before making a decision. There are about 20% of banks out there who are more flexible when it comes to that, so you might have to look at your neighborhood banks. Establishing a personal relationship also works better in those smaller institutions.

Third Answer : YES (with caveats)

If you have no other options, your best bet might be to get a prepaid debit card. Of course, it’s not an ideal setup, because most of them will cost you way more than a regular checking account ever would, but at least they will give you almost all the convenience that you would get. Standard free features include direct deposit of your paycheck online bill pay, and the ability to manage your prepaid card online. As for the other stuff, that’s where you will need to comparison shop. There are a lot of fees to keep track of: annual (or monthly) fee, transaction fee (pin or signature), ATM withdrawal fee, reloading fee, inactivity fee, setup fee…

Not every card has ALL those fees, but they all charge you different combinations of fees, so it pays to know exactly what you’re going to be using the card for, and see which offering best matches your personal circumstances. If push comes to shove, a prepaid debit card might be the closest thing to a bank account that you can get.

Can I Open A Bank Account If I Owe Another Bank Money?

J.P. Morgan Chase is one of the largest banks in the country. Chexsystems is the banking system’s database of all the people that they don’t want to have as customers. As a company, Chexsystems is pretty aggressive in their marketing, and it’s estimated that they serve between 80 and 90 percent of the banks out there. When you put all those things together, the answer is pretty clear: yes, Chase does use Chexsystems. Actually it would be surprising if they didn’t.

Now the big question mark is how flexible they are with it. Unfortunately that is something that we cannot answer right now. What we can tell you is that Chexsystems in and of itself has no influence on whether or not your new checking account application is accepted or denied. That decision rests entirely with the bank. So if, for whatever reason, you can make your case and prove that you either did get off Chexsystems’ list or otherwise solved your issue with them, then you should definitely try and see what you can get.

Does Chase Use Chexsystems?

People looking for a list of banks that do not use ChexSystems come from all walks of life. In most cases they have been in bad situations and they’ve had checks bounce. The banks that they held their accounts with decided to close those accounts and report the incidents to Chexsystems. So those financial problems that you’ve had in the past can potentially follow you for years. This is because ChexSystems is a company that maintains a database of all the “bad” banking clients. Since most banks do a ChexSystems check on all new bank applicants, if your name is in the system, you won’t be able to qualify for a new account.

This is what prompts most people to get online and start looking for “banks without Chexsystems“. They look because it’s common knowledge that only about 80% of the banks out there do business with ChexSystems. That leaves a big 20% of banks out there that are open to the possibility of opening a checking account for you even if you have a negative record. Depending on the bank, those accounts are called “fresh start checking accounts” or “second chance checking accounts” but they basically offer the same thing: you get to open a bank account even if you’ve had financial problems, or you have bad credit, or something similar.

You’ll find that there are lots and lots of places that promise to get you a list of banks that don’t use ChexSystems. The problem is that a lot of them are really not about to give you the exact information that you’re really looking for. But at first, let’s give this a little more thought.

ChexSystems makes its money by charging financial institutions to use its service. That means that the more banks use them, the more money they’ll make. So they’re pretty aggressive in terms of marketing their service to banks that don’t currently use them to verify new checking accounts. Conversely, some banks have realized that they lose business by simply turning down everyone with a negative ChexSystems record, and they don’t necessarily want to keep doing that. What that boils down to is that there’s a constant movement of banks signing up for ChexSystems’ service and others that are leaving it.

When you think of the number of banks that there are in the United States (close to 8,500), getting a list of banks that don’t use Chexsystems would be a colossal amount of work in the first place. And that’s only the beginning, because such a list would have to be maintained continuously in order to be accurate. That would necessitate a sizable staff and that list would probably be just too expensive to be attractive to anyone looking for a non ChexSystems bank.

So what’s left for you to do? Well there are companies that are well known for offering “second chance checking” products and services. Three of them come to mind, but there are many more.

People’s Cash Solutions: “Second Chance Checking Accounts”

People’s Cash Solutions refers to their product as a “fresh start at banking”. Here’s what their website has to say:

Have you ever been denied a checking or savings account due to past problems with ChexSystems and TeleCheck? The Peoples Cash Solutions program is the answer for you! Peoples Cash Solutions and Peoples Bank will open a real FDIC-insured checking account for you even if you have been reported to ChexSystems or TeleCheck in the past (except where fraudulent activity has been reported). We want to give you a chance to establish a banking relationship as the first step toward improving your credit record and to allow you to begin building and accumulating assets. Our Second Chance Checking program erases the inconvenience of not having a checking account and/or being forced to use fee-intensive alternatives.

Money Now Usa: “100% Approval, No Credit Checks Prepaid Debit Cards”

Money Now Usa flaunts their wide selection of prepaid debit cards with 100% guaranteed approval. You get to choose from a list of well-known companies that offer their debit cards with no credit checks and no Chexsystems verifications. There’s a small list of features and benefits next to each offering to help you decide which is best for you.

Ready Debit: “100% Approval Guaranteed Reloadable Prepaid Debit Cards”

Once again, I’ll let the company’s website do the talking:

100% Approval Guaranteed — Even if you’ve been turned away or rejected by banks you can still get a READYdebit card. We have no credit or Chexsystems checks to worry about. Our only requirement is that we can validate the information you provide to us when you open your account. We do this instantly online while your application is being completed to make the sign-up process fast and easy!

“Can I Get A List Of Banks That Don’t Use ChexSystems?”

One of the reasons why I started this website is that I have been meeting with a lot of people who insist that being able to open a checking account once you’ve been reported to Chexsystems is the closest thing there is to mission impossible, whether it be finding a local non-Chexsystems bank or an online bank that doesn’t use the Chexsystems reporting information to open new checking accounts. It’s easy to understand why so many people people would believe that, since the “big” banks typically will not do business with you once you’ve been reported. You’re left with the only option of looking for other, smaller banks, and the information is not readily available. And let’s not forget scammers who will try and sell you outdated lists, that will do nothing to help you in your predicament.

It certainly is frustrating to look for weeks and weeks and just keep getting turned down, so at that point you start thinking that you’re probably fighting a losing battle. You think that you may just have to deal with it and settle for those awkward “solutions” that are touted as alternatives for people who can’t open checking accounts because of Chexsystems. To be totally honest, finding a non-Chexsystems bank is not the easiest thing, but with some useful information in hand, you can already start narrowing down your search and be more productive. In order to improve your chances of success when negotiating with banks, order your chexsystems report to see what information is in it and try and resolve any issues first. You might also want to learn about the ChexSystems report dispute process.

The first thing you need to know is that you should definitely not expect any bank to openly advertise which reporting system they use (if any). If they did, they would be just opening a can of worms. They would be swamped with new people who want to open checking accounts, but they would have to sit there and sort through hundreds, if not thousands, of applications to handpick the ones that look promising. It’s just not cost-effective. What you can do, though, is take your yellow pages and start calling and asking. The trick here is to ask for the branch manager or someone in the branch who ranks high enough to give you the information that you’re looking for. Also, if you can, try to sweeten the deal. If you have a little bit of savings that you an open a CD with, mention it. Stuff like that will make you look more appealing as a customer and they’ll probably be more inclined to cut you a deal.

Of course, whichever banks that do not use Chexsystems that you find in your search, and that you’re considering opening second chance checking accounts in, absolutely has to be an FDIC-insured bank. There’s simply no way around that. If you fail to take this precaution, and the bank happens to go under, you will lose all the money that you deposited there. On the other hand, with an FDIC-insured bank, your money is insured up to $250,000 per account holder. Not a bad safety net.

In your search to open a non-Chexsystems checking account, you have to be on the lookout. You will find a lot of information out there and what we recommend is that you gather as much of it as you can. The trick is to avoid getting scammed for large amounts of money. If you find something that looks promising and is reasonably priced, check to see if you can get a money-back guarantee. This will typically protect you. Also, look around, check online banks (like Ally) if brick and mortar ones keep turning you down. Explore every free option before eventually turning to paid ones.

As a final word of advice, when you’re looking for advertisements, favor specific institutions over list sellers. The reason is that if an institution is advertising to people with bad credit or who have been reported to Chexsystems, it’s probably because at that specific moment, they probably have some kind of product or service that caters to this specific niche. Once they decide not to deal with this segment anymore, they will just stop advertising. A list, on the other hand, would have to be continuously updated to account for companies that enter the segment, as well as those leaving it. We’re not saying that it’s not possible to find a good, legitimate list. What we’re saying is that you’ll probably have better luck with the companies that advertise to you than you will with the list sellers.

Finding A Second Chance Checking Account In Your Local Area