I'm in both chexsystems and telechecks. I applied online yesterday and this morning I got my e-mail saying that I'd been approved for a free checking and savings account! yippe.

yes BOA is approving almost anyone and everyone right now with the exceptions of those that still owe money to them. There are times they will even approve those that still owe them money but later there can be problems ... you must apply online

will it be a hard pul on your credit report?

You DO NOT have to apply online... You may apply at your local branch... and in Southern California, YES it is a hard Experian pull, you must have a 580 or above to be approved, or you will need a managers approval at the branch. This is from inside information...

no 580 for me still got the account and you only qualify for the free account if you apply online ONLY! mayne that's where you are

That is correct, you do not have to apply online but the people that I am seeing that are being denied are the ones that apply at local branches. I have had many tell me that they were denied at a local branch in person but then they turned around and applied online and was approved.

You are WRONG, please do not quote something, if you DO NOT HAVE accurate F-A-C-T-S. You caim to qualify for the free account you must apply online ONLY, FALSE... You may apply in a local branch, but the other poster is correct, you are more likely to be DENIED in branch , if that local branch is not participating in this new program BofA is currenly running...

I have reliable INSIDER information, that backs what Im telling you..... and Remember, some personal bankers are used to the old procedures in opening new accounts and Might run you through check systems and thats when you are denied. It a hit and miss situation...

I hope this helps..

Sorry but I was only reporting what I am being told by many many people. They apply online and are approved. Most that apply at a branch are denied if they are reported to chexsystems. I am only trying to help.

I was approved online as well while being in both Chexsystems and Telecheck. If I can even go out on a limb further.....I think the BOA is perfect for folks like myself that had bad financial habits when it came to checking accounts years ago. They dont provide paper checks to get yourself in trouble with but do give you the free Visa debit card and the convenience of a checking acct with many branches. Plus, with online bill pay, I have absolutely no use for paper checks now.

Wickipedia mentions online about Bank of America being forgiving about people with chexsytem in their past....so they might indeed be a good place to start. They talk about it in the section titled banks respond.

http://en.wikipedia.org/wiki/ChexSystems

Here's an article with tips on opening an account for people with chexsystem history and other related info.
http://www.creditinfocenter.com/FeaturedAr...exSystems.shtml

Hope this helps.

This is the report that they were referring to:

ChexSystems: Disenfranchisement or Risk Management Tool?

Introduction

Over the summer of 2000, a Wall Street Journal article elevated the use of ChexSystems into the national spotlight. Throughout the 1980’s and 1990’s, banks had been quietly using the ChexSystems, a private sector database, as a resource in determining whether to offer applicants checking accounts. Maintained by the check printing company Deluxe Corporation, the ChexSystems database tracks the records of customers whose checking accounts have been closed due to fraudulent activity or overdrafts. Banks enter into contractual arrangements with ChexSystems under which they report the names of customers whose checking accounts are closed. In return, banks have access to all the names entered into the ChexSystems database. Currently, about 80 percent of the depository institutions in the country use the ChexSystems database when reviewing applications for checking accounts.

The critical questions regard bank policies for reporting borrowers’ checking account history to the ChexSystem as well as bank policies for using ChexSystems in turning down applications for new accounts. The ChexSystem contains the records of 7 million consumers. If banks are unforgiving and report consumers for relatively minor transgressions, then the ChexSystem database effectively disenfranches consumers and leaves them with no option but to resort to more expensive check cashing outlets and other fringe banking systems. Also, if banks are not flexible in reviewing ChexSystems records and automatically reject consumers if they appear on the system, the database disenfranchises consumers and makes it difficult for them to rectify past mistakes. On the other hand, if the banks use the ChexSystem in a flexible manner and make careful judgments as to which behavior predicts future abuse, then the ChexSystem database can become an appropriate risk management tool and would contribute to the safety and soundness of the banking system.

Disenfranchisement or appropriate risk management is the central issue for the 7 million consumers whose names now appear on the ChexSystem database. It is likely that a significant portion of these 7 million consumers are a subset of the approximately 12 million “unbanked” Americans that lack a banking account and do not have any other business relationships with depository institutions. For the seven million consumers on ChexSystems, it is critical to know to what extent inflexible practices needlessly block their access to the financial mainstream.

While this report cannot provide definitive answers to these questions, it indicates how some of the largest banks in the country use ChexSystems. It also offers insights into how these institutions have balanced their need for risk management against the imperatives of obtaining more consumer business and thereby expanding access to the financial mainstream for millions of consumers.

Methodology

The National Community Reinvestment Coalition (NCRC) has established a Banker Community Collaborative Council (BCCC) composed of NCRC Board members, representing community organizations, and twelve major banks. The banks represented on the BCCC include Bank of America, Chase Manhattan Bank, Citigroup, Mellon Bank, U.S. Bank, Wells Fargo Bank, FleetBoston Bank, First Union Bank, SunTrust, Bank One, ABN AMRO, and European American Bank. The BCCC meets frequently to discuss credit needs and design affordable lending programs. Recently, the BCCC spearheaded the Community Express small business lending program that involves loans from BCCC members, SBA loan guarantees, and technical assistance provided to small business owners by NCRC member organizations.

In November of 2000, NCRC sent a survey form to the BCCC member banks asking them how they used the ChexSystem in deciding to open up new accounts as well as how they refer their customers’ names to ChexSystem. We also asked them if their policies changed from 1999 to 2000. The survey form is attached as an appendix to the report.

We asked the BCCC banks if we could publicly associate the names of their institution to survey responses or if they preferred that we not include their names while discussing survey results. Six of the twelve banks completed the survey and two declined. One bank said that they do not make information on their use of the ChexSystems public. We did not receive responses or hear from the other four banks on the BCCC. The six banks that responded to the survey requested that we do not include their names while discussing survey results. They requested confidentiality because they did not want their competitors to know the specifics of how they used ChexSystems. Respectful of these requests, NCRC will report survey results without identifying specific institutions.


Report Findings

How Banks Relied on ChexSystems in Deciding to Open New Accounts

ChexSystems retains records of closed checking accounts for a period of five years. It records whether the checking account was closed due to overdrafts (or insufficient funds) or fraudulent activity. ChexSystems indicates the year in which the checking account was closed so it is possible for a bank to determine if the account was closed a year ago, two years ago, three years ago, four years ago, or five years ago.

All of the six banks that responded to the survey indicated that they use the ChexSystems in determining whether to open checking accounts. Consumer advocates assert that denying a checking account to an applicant whose previous account was closed five years ago is an unnecessarily stringent standard. During 1999, five of the six banks indicated that they deny checking accounts if the ChexSystems record is 5 years old. One bank stated that decisions are left to local branch managers who may have different policies regarding their use of ChexSystems. In their responses to a question of whether this policy changed from 1999 to 2000, two of the banks indicated that they recently adopted a three-year threshold in cases in which a consumer’s account was closed due to insufficient funds. All of the banks, however, continued to maintain the five-year standard in cases of fraud.

The ChexSystem database reveals if a customer subsequently repaid the outstanding debt in cases in which accounts were closed due to insufficient funds. Four of the banks responded that they do not disregard a ChexSystem’s entry if a consumer repays debt. Two of them indicated that this decision varies on a case by case basis at the discretion of local branch managers. Two of the banks indicated that they are in the process of changing the thresholds they will use in cases of debt repayment. Starting in late 2000, the two banks will disregard a ChexSystems entry if it is more then one year old and the consumer has repaid his or her debt.

None of the survey respondents disregarded an entry in ChexSystems if a consumer recorded in the database took a financial management course. One of the banks indicated that it will offer a financial counseling course developed by E-Funds, which is a subsidiary of the Deluxe Corporation. Only one of the banks indicated that it would offer (starting in late 2000) a transitional account for consumers with records in the ChexSystem. This bank said it would make ETAs (Electronic Transfer Accounts) available to these consumers. Subsidized by the federal government, ETAs are electronic accounts for receiving federal salaries, Social Security payments and other government benefits. A consumer receives an ATM card as the means for retrieving cash from the ETA account; no checks can be written on ETA accounts.

The survey asked respondents to indicate on a scale of 1 to 5 (with five being the most important) the importance of various factors in the decision to open a checking account. These factors included: the ChexSystems database, steady employment, non-employment sources of income such as Social Security, history of rent payments, and other factors in the decision to open new checking accounts for applicants. Five of the six banks rated the ChexSystems database as the most important factor in the decision to grant a checking account. One bank indicated that local branch managers had discretion in how much weight to give to a ChexSystems entry. Two of the banks suggested that verifying identification (two forms of ID being necessary for one bank) was a very important factor in deciding to open a checking account. Only one bank indicated that steady employment, paying rent on time, or non-employment sources of income factored into the decision to open a checking account in any significant manner.

Bank Referrals to ChexSystems

The banking industry does not have uniform policies for reporting borrower checking account information to the ChexSystems database. Banks have different tolerances regarding the amount of an overdraft and the number of days of an overdraft before they report to ChexSystems. Two banks responding to the survey reported that policies varied within their organization by branch or by region.

Five banks indicated that they had both a dollar amount and a time threshold that they applied for deciding when to report borrower account information to ChexSystems. One bank waited 60 days to see if an overdraft would be repaid before reporting to ChexSystems. The least amount of time a surveyed bank waited was 30 days, and the average time period of surveyed banks was 45 days. Two banks did not report customer account history to ChexSystems until the overdraft exceeded $100. On the other end of the scale, one bank reported an overdraft if the overdraft dollar amount was more than $35. Another bank changed its dollar threshold from $50 in 1999 to $100 in 2000. The average dollar threshold in 1999 was $67 for the banks surveyed (average threshold dollar amounts are not reported for 2000 because only one bank changed its threshold level from 1999 to 2000). Before closing an account, one bank stated that it informed a checking account holder two to three times via mail that the failure to pay off an overdraft would result in the closing of an account and a report to a credit agency.

The bank with the lowest dollar threshold level referred the most customers to ChexSystems (5 percent of checking account customers in 1999 and 4 percent in 2000). The bank with one of the more lenient policies in terms of dollar and time period threshold only referred .2 percent of their checking account customers to ChexSystems in 1999 and 2000. On average, surveyed banks referred 2.6 percent of their customers to ChexSystems in 1999 and 1.8 percent in 2000. While two banks became more lenient in their policies in 2000, it cannot be concluded that the change in policy alone resulted in a reduction of referrals to the ChexSystem. The survey sample size is too small and cannot adequately account for differences in regional economic conditions to reach definitive conclusions regarding the impact of policy changes on referral rates. However, survey results certainly suggest that the banks with the more lenient policies refer fewer customers to ChexSystems.

All banks indicated that they terminate accounts of customers that they refer to ChexSystems.

Recommendations

Disenfranchisement or risk management tool? At this point, NCRC believes that while banks are not using ChexSystems with a malicious intent, they have used ChexSystems as an automatic reflex without a careful assessment as to which information in ChexSystems is a significant indicator of risk. For example, it does not seem to us that an overdraft of say $30 to $40 five years ago means that a borrower will bounce checks in the future. Yet, most of surveyed banks reject checking account applicants if their names appear in the ChexSystems for transgressions five years old. And almost all of the banks relied almost entirely on ChexSystems and did not consider employment history, rent payment history, or other predictive variables in deciding whether to open checking accounts.

At this point, NCRC would say that banks disenfranchise customers in the ChexSystems through benign neglect rather than through overt and purposeful discrimination. Nevertheless benign neglect appears to be resulting in thousands, if not hundreds of thousands, of consumers shunted unnecessarily into the fringe-banking world of stiff fees and high interest rates.

NCRC encourages its BCCC member banks and other banks in the country to continue their experimentation with ChexSystems and assessing the impacts of the flexible use of information it. Only through experimentation and systematic study can we determine how most appropriately to balance the imperatives of risk management and expanding access to mainstream banking for traditionally underserved communities. But it will take more than the hard work of banks to make desired changes in the use of ChexSystems. NCRC recommendations these actions for banks, regulatory agencies, and community organizations:

Recommendations for Banks

• Flexible Use of Information in the ChexSystems – Eliminate the five-year threshold for cases of insufficient funds. Consider adopting a two or three year standard as some BCCC banks have done, and assess the impact on the performance of checking accounts. Move to more flexible standards for overdraft amounts and time period thresholds for reporting customer information to ChexSystems; for example, $30 appears to be too low while $100 seems more reasonable.

• Allow Additional Flexibility for Consumers Repaying Debt – Two of the surveyed banks indicated that they will open accounts for applicants with ChexSystems records if the records are over one year old and the consumer has repaid amount overdue on the checking account. Positive incentives, in the form of a more lenient time threshold, should be offered to consumers who have done the right thing.

• Provide Sufficient Notice to Consumers Who are About to be Referred to ChexSystems – One bank indicated in the survey responses that it informed customers two or three times via mail before reporting him or her to ChexSystems. All banks should do this. In addition, banks should consider calling the customers in question and explain to them the serious consequences of referral to ChexSystems or another credit reporting agency. Banks should think about negotiating with customers over a time schedule for repayment of overdrafts; this would avoid a ChexSystems referral and would make the bank whole again.

• Establish Transitional Accounts – Only one bank in our survey established a transitional account for customers in the ChexSystems system. Other banks should likewise at least consider the use of ETAs for these customers since ETAs are federally subsidized. In addition, banks should explore the feasibility of offering other deposit accounts that lack a check writing feature as transitional accounts. This brings business to banks and avoids consumer reliance on check cashers and other fringe establishments.

Regulatory Agencies

• Need for a Comprehensive Study - The Federal Reserve Board should conduct a comprehensive study on checking account practices of financial institutions. The study would examine if bank policies are appropriate risk management tools or if they err too much on the side of preventing consumers from opening checking accounts.

• CRA Penalties for Punitive Policies – CRA (Community Reinvestment Act) examinations include a service test that scrutinizes the extent to which depository institutions maintain branches in low- and moderate-income communities and the extent to which they offer checking accounts and other banking services in these communities. CRA examiners often do not measure the number and percentage of checking accounts offered to low- and moderate-income customers as part of the service test. If CRA examiners did this, they could penalize lenders through lower ratings on the service test that make significantly fewer checking accounts available to low- and moderate-income customers than their peers. This in itself may reduce the number of banks that have inflexible standards for using ChexSystems since they are the ones likely to be offering relatively few checking accounts to customers living in traditionally underserved communities. In addition, CRA examiners could penalize banks that have overly stringent standards for applying ChexSystems data. After a Federal Reserve study and/or comparable studies, federal agencies will have more information on which standards are not related to risk and therefore have a discriminatory impact.

• Best Practices – The federal agencies should conduct or fund best practices studies that contain examples of banks offering innovative checking account and deposit products to traditionally underserved populations. These studies can encourage the replication and expansion of these products.

Community Groups

• NCRC Follow-Up Surveys – NCRC intends to conduct annual surveys of BCCC members regarding their use of ChexSystems. Next year, we intend to enhance our survey, asking questions about the characteristics (such as race and income) of customers that the BCCC banks refer to ChexSystems.

• Community-Lender Partnerships – NCRC members have worked with banks to figure out methods for expanding the number of affordable checking accounts. The breadth and depth of these partnerships need to increase so that traditionally underserved communities will have alternatives to check cashers and other fringe bankers.

• Inventory of Bank Products – Community groups should develop and maintain an inventory of checking and deposit accounts offered by banks in their area and bank standards for opening and closing these accounts. Community groups should publicize these inventory lists as widely as possible so neighborhood residents can find the banks that are the best deal for them.

I too was in Chex and I applied online for a checking and was approved and even received my visa check card. after making a few deposits and a few weeks later my account was closed automatically. I called and asked why and was told because I was in Chex. This was about 3 months ago and they may have changed their approval requirements. Just my small little input!

They have not changed. I know some that were closed as little as a week ago. There have been a few here n there that remained open. These were people that were reported to chexsystems that no longer owed the reporting bank and did not have fraud indicated. They were also not reported to EWS