With an online checking account – no ChexSystems, unbanked consumers looking to conduct financial transactions through a bank can open a new account.
There's no reason for U.S. consumers to be unbanked with access to online and digital banking options. If a negative banking history is prohibiting you from opening a bank account, there are many online banks that don't use ChexSystems as well as second chance banking options.
Wasting money on fees for checking cashing or prepaid debit cards is no longer necessary.
10 Best Online Checking Accounts, No-ChexSystems
10 Best Online Checking Accounts, No-ChexSystems
A few things to consider about Non-ChexSystems Banks
Overall anyone unable to open a bank account due to ChexSystems, EWS, or bad credit needs a second chance at banking. However, there are a few things to consider about banks offering online checking accounts – no ChexSystems:
- Cashier's checks. Online banks do not typically issue money orders, certified checks, or cashier checks.
- Paper statements. Most online banks only offer statements via online where customers can download and view PDF statements by month and year.
- Bank transfers through Zelle. Zelle is compatible with nearly all major banks, but some fintechs like Upgrade, may offer alternative transfer mobile banking apps.
- Check writing. Writing checks may not be available at all banks that don't use ChexSystems.
- High-interest savings rate. Banks online often feature higher savings interest rates than traditional banking institutions, however, your money may not be accessible with a debit card or ATM card. Withdrawals are typically through transfer, unless you have a connected checking account with a debit card like SoFi Bank.
Why ChexSystems Exists
ChexSystems is designed to help banks identify fraudulent activity. It allows banks to report consumer banking activity that's considered negative as well as consumer banking habits and activities, for example:
- You fail to pay an overdraft fee for as little as $5, can end up in ChexSystems.
- Any banking account closures including bank closures with negative balances.
- Any returned (bounced) checks.
- Number of inquiries that have been made when you apply for a bank account and in what time frames.
- How many check orders you have placed and how often.
ChexSystems Removal Strategies
ChexSystems removal should be considered because even if you pay the bank in full, the bank must update ChexSystems but ChexSystems is under no obligation to remove the record.
ChexSystems is consumer reporting company. If you find information in your consumer report that you believe is inaccurate or incomplete, you have the legal right to dispute the report’s content with the consumer reporting company and the bank that shared the information to ChexSystems.
Under the Fair Credit Reporting Act (FCRA), ChexSystems or the bank that reported you has to verify the negative mark within 30 days or delete it from your ChexSystems report.
Here are several ChexSystems removal strategies:
1. Dispute directly with ChexSystems. Request verification from ChexSystems:
- Gather the facts and include specific information as to what you are disputing and an explanation of the basis for your dispute.
- Request that ChexSystems validate the information being reported, by contacting the bank. If the bank provides ChexSystems with any documentation connected to your signature, request that ChexSystems send you copies.
- Let ChexSystems know if the bank cannot furnish documentation with your signature, request that ChexSystems remove the account being reported.
2. Dispute directly with the bank. Request debt validation from the bank.
- Request validation per the Fair Debt Collection Practices Act.
- Ask the bank to provide full validation under the law, to include copies of completed and signed documentation indicating you have a contractual obligation to pay.
- Per the Fair Credit Reporting Act, any debt which cannot be properly validated may not be reported to a consumer reporting company.
- Failure to remove inaccurate information will be documented as a violation of the Fair Credit Reporting Act for the purpose of pursuing legal remedies under consumer laws.
3. Negotiate a pay for deletion. The bank or credit union may be open to negotiating a pay off to clear your records. If they will not agree to remove you from ChexSystems, ask the bank to update the information in ChexSystems indicating that the debt has been paid. Be sure to keep copies of all the paperwork documenting the payoff.
4. Bankruptcy. If you have filed bankruptcy, ChexSystems will remove your records.
5. Make complaints. File complaints with one or several of the banking regulators:
- Office of the Comptroller of Currency (OCC)
- Consumer Financial Protection Bureau (CFPB)
- Federal Trade Commission (FTC)
- National Credit Union Administration (NCUA)
- Your State's Attorneys General Office
- Your State Banking Commission
How to get your ChexSystems report online
You are entitled to request a copy of your ChexSystems Report at your request, once every 12 months. However, due to the COVID-19 Pandemic, you can get your ChexSystems report online for free request 3 times per every two-week period.
It’s become clear that consumers enjoy smart, safe, and convenient ways to bank. Digital banking can be a means by which consumers without a bank association can begin to bank again. Digital banking is not just apps and sites, it's full-service banking that offers customers the best of both worlds.
Benefit from new technology to open an online checking account – no ChexSystems. A ChexSystems record, paid or unpaid, can remain up to 5 years and millions of people are unbanked because they have been flagged as high risk.