I'm in MI and have been with my bank (Flagstar) for a number of years with a perfect history. (FYI Flagstar only pulled my credit when I opened the account.) Last year I opened a custodial checking account for my then 15 year old sister at TCF so that she could have a direct deposit account for her new job. Much to my dismay, she has overdrafted the account a couple times but each time I've paid it off and brought the account current right away.

My question is...do overdrafts report to Chex? If they do, will this being a custodial account have any affect on trying to negotiate removal of the entry?

At the banks discretion. Most of the time if it is resolved in a timely manner it isn't. Request your report to see.

Generally TCF would not report for that but there are some banks that do report for every NSF. It is really crazy. I would ask for a FREE copy of your chexsystems report to make sure nothing was reported