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Bank Account with Felony

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I had an account at Armed Forces bank for 13 years. Originally opened because I was on Chexsystems and , they were friendly to people who had been reported to Chex. I never once had an issue with my account, and over that time the negative items on my Chex report fell off. Three weeks ago, I received a letter  from loss prevention stating they are closing my account. I believe the reason is I have a Federal Felony (fraud) on my record from 2017. I am guessing something triggered them to run a check on me and they found the conviction. I immediately applied at Chase, was approved online butt, was sent a letter two weeks later terminating my account.. Do banks look at criminal records and are these two closings related?  After an account is opened online will the back office pull background checks. Can someone please provide some clarity on how this process works so I can find a bank who will accept me.  Thanks

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Yes, there are indeed banks that are refusing to do business with felons.  Where it was a federal offense, it becomes even more likely for the conviction to have been picked up.  The banks are twitchy because they know an attachment is even easier for federal offenses due to the traditionally higher restitution and fine amounts. 

 

Someone with a criminal history tends to be better off looking at the small local bank where the Directors/Officers actually have a desk IN THE BUILDING and are accessible to the customers.  Those are the institutions where discretion is more apt to be utilized...

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Posted (edited)

Some financial institutions use services provided by Chexsystems or the big three credit bureaus, that includes public and criminal record reporting. 

 

The level of data pulled depends on the subscription they purchased. Pulling criminal reporting is not a standard practice. However, some Loss Prevention departments will periodically run checks on current accountholders. They will also run CRA checks if you have fraud related issues, apply for certain services (like overdraft protection) or a loan.

 

Chase Bank has been known to look for felony records, and close an account when negative info is found.

 

Since your Chexsystems report is clean, we can help you find new accounts. What is your city and state location?

 

** Also, pull your Early Warning Service report to verify its clean. 

https://www.earlywarning.com/consumer-information

Edited by tmcgill

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Would it be that it's not necessarily the fact the OP has a felony record, its that the offense was fraud? Hence a heightened risk for any financial institution's loss prevention department.

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9 hours ago, tmcgill said:

Some financial institutions use services provided by Chexsystems or the big three credit bureaus, that includes public and criminal record reporting. 

 

The level of data pulled depends on the subscription they purchased. Pulling criminal reporting is not a standard practice. However, some Loss Prevention departments will periodically run checks on current accountholders. They will also run CRA checks if you have fraud related issues, apply for certain services (like overdraft protection) or a loan.

 

Chase Bank has been known to look for felony records, and close an account when negative info is found.

 

Since your Chexsystems report is clean, we can help you find new accounts. What is your city and state location?

 

** Also, pull your Early Warning Service report to verify its clean. 

https://www.earlywarning.com/consumer-information

Thank you, great info from all. I do believe since it is a Federal Felony (Fraud related) if a bank sees this they want nothing to do with me. Even though the underlying offense had nothing to do with banking. Not sure what triggered Armed Forces Bank to run a background check after all these years but they did. I am in Orlando Florida. So any local banks you can recommend would be great.   What about Wells Fargo? They offer a second chance checking product or are all the big banks basically going to do the same as Chase did?

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Posted (edited)

Wells Fargo

Has not been known to close accounts because the accountholder has a felony.  They were in a push for new customers after the scandal in the last few years. They had rogue managers and branch employees opening multiple accounts without the accountholders permission. They're on the rebound now, and I know many who have gotten accounts with them.

 

BTW - What is on your Chexsystems report?

 

Other Orlando Options:

*Orlando Credit Union

orlandocreditunion.org

(Must live, work, worship or attend school in Orange, Seminole, Volusia, Brevard, Polk or Hillsborough counties.)

*First Federal Credit Union

Firstflorida.org

(Must live, work or worship in Orange County. See website for full county list.)

*Renasant Bank

renasantbank.com

(Branches in Winter Park, FL)

 

MCA's Florida List:

She originated the bank/credit union lists here on CB:

Review her Florida list here:

checking-plus.com/nationwide-bank-lists

 

The goal should be:

1. Primary Household Account - strictly for bills.

2. Point Of Sale Account/Card - Strictly for in-person or internet purchases. 

3. Savings Account - Just for emergency funds. 

This gives you better control of funds and mitigates damage for fraud or unauthorized purchases.

 

Keep us updated on any account apps and successes. Keep new apps to a minimum. Banks and credit unions don't like to see a lot of new app inquiries.

 

 

 

 

 

 

 

 

 

 

Edited by tmcgill

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Posted (edited)

IndyPoolPlayer

 

Yes, any type of fraud indication is the kiss of death for financial institutions.

In this case, it's important to determine how the federal CU got the information.

That's why I asked OP what was listed on Chexsystems, and if an EWS report was obtained?

Or, did the CU Loss Prevention run an independent report in one of the internal federal databases?

Edited by tmcgill

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Posted (edited)
22 hours ago, mfins said:

Not sure what triggered Armed Forces Bank to run a background check after all these years but they did

Possibly a bank examination by banking regulators with a new examiner who is more stringent on depositor backgrounds than previous examiners? Maybe something new with FDIC/NCUA as a condition for deposit insurance coverage?

Edited by IndyPoolPlayer

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12 hours ago, tmcgill said:

Wells Fargo

Has not been known to close accounts because the accountholder has a felony.  They were in a push for new customers after the scandal in the last few years. They had rogue managers and branch employees opening multiple accounts without the accountholders permission. They're on the rebound now, and I know many who have gotten accounts with them.

 

BTW - What is on your Chexsystems report?

 

Other Orlando Options:

*Orlando Credit Union

orlandocreditunion.org

(Must live, work, worship or attend school in Orange, Seminole, Volusia, Brevard, Polk or Hillsborough counties.)

*First Federal Credit Union

Firstflorida.org

(Must live, work or worship in Orange County. See website for full county list.)

*Renasant Bank

renasantbank.com

(Branches in Winter Park, FL)

 

MCA's Florida List:

She originated the bank/credit union lists here on CB:

Review her Florida list here:

checking-plus.com/nationwide-bank-lists

 

The goal should be:

1. Primary Household Account - strictly for bills.

2. Point Of Sale Account/Card - Strictly for in-person or internet purchases. 

3. Savings Account - Just for emergency funds. 

This gives you better control of funds and mitigates damage for fraud or unauthorized purchases.

 

Keep us updated on any account apps and successes. Keep new apps to a minimum. Banks and credit unions don't like to see a lot of new app inquiries.

 

 

I pulled my chex report about four months ago and it was clean. Other than an inquiry. (Now it will show two inquires)  I will go ahead and obtain my EWS report as well but, it should be clean as I have not had any negative banking activity in ten years.

Also a couple questions

 

My Chex report when I pulled it had an inquiry from one of those High interest lending places. I believe it was Native American owned but, forget the name. I received a bunch of solicitations from them about loans. Can a bank, financial institution, lender pull/run a chex report to determine if your pre-authorized for a loan. I know on a Credit report it shows up as a promotional inquiry or soft pull but, on my CHEX report it was registered as an inquiry which is sort of unfair.

 

Also, if you owe a bank money I believe it falls off CHEX and EWS in 5-7 years. However, what if a bank waits say 4 years to report it. Does it fall off 5 years after that or from the date the account was closed?

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On 3/17/2020 at 12:11 PM, centex said:

Yes, there are indeed banks that are refusing to do business with felons.  Where it was a federal offense, it becomes even more likely for the conviction to have been picked up.  The banks are twitchy because they know an attachment is even easier for federal offenses due to the traditionally higher restitution and fine amounts. 

 

Someone with a criminal history tends to be better off looking at the small local bank where the Directors/Officers actually have a desk IN THE BUILDING and are accessible to the customers.  Those are the institutions where discretion is more apt to be utilized...

Hello, another person who has a Federal  Fraud Felony told me they were able to get a checking account with Discover.  So far two years later its still good. Can someone please tell me if Discover checks, criminal record, Chex, EWS etc or what they use to determine eligibility?  Thanks !

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My suggestion, go elsewhere.  I too have a federal felony for bank fraud from 2013 (lied on mortgage loans and defaulted back in the day)  I kept most of my accounts and had a large restitution.

 

However, I can tell you that certain banks not only run your background but that of everyone in your household.  USAA and Chase come to mind.  My wife who has various security clearances and squeaky clean background was shut down by Chase when they did a routine LN search on our address.  They terminated her account b/c she was married to me.  USAA also shut me down after I was indicted in 2013.  Since release in 2017 I managed to open several new accounts for various bonuses etc.  Credit Unions don't usually check and neither do the smaller regional banks.  Even BOA opened an account for me (and they were one of my restitution payees).

 

If you want a large bank, go to BOA, as long as CHEX is clean they will open you.

 

 

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Posted (edited)

INQUIRIES

Marketing and user requests for their own file are soft pulls, and don't count against you when you apply for new accounts.

Q:  Can a bank, financial institution, lender pull/run a chex report to determine if your pre-authorized for a loan.

A: They can do a soft pull. The soft pull is your file header info, plus internal scoring the CRA uses. The header is your identifying info; name, address. DOB, etc.

NOTE:  Collectors often soft pull Chex to locate debtors.

 

REPORTING PERIOD

Q: What if a bank waits say 4 years to report a bad account.. Does it fall off 5 years after that or from the date the account was closed? DATE CLOSED 

A: When a bank account is closed or charged off, the financial institution can't wait 4 years to start the negative reporting period. They have 180 days to begin the negative reporting, however, most use the date of closure. 

 

DISCOVER

Pulls Chexsystems and verifies identity using one of the big 3 CRAs. They are picky about identification. Addresses and info on your app should match your file info.

Edited by tmcgill

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3 hours ago, tmcgill said:

INQUIRIES

Marketing and user requests for their own file are soft pulls, and don't count against you when you apply for new accounts.

Q:  Can a bank, financial institution, lender pull/run a chex report to determine if your pre-authorized for a loan.

A: They can do a soft pull. The soft pull is your file header info, plus internal scoring the CRA uses. The header is your identifying info; name, address. DOB, etc.

NOTE:  Collectors often soft pull Chex to locate debtors.

 

REPORTING PERIOD

Q: What if a bank waits say 4 years to report a bad account.. Does it fall off 5 years after that or from the date the account was closed? DATE CLOSED 

A: When a bank account is closed or charged off, the financial institution can't wait 4 years to start the negative reporting period. They have 180 days to begin the negative reporting, however, most use the date of closure. 

 

DISCOVER

Pulls Chexsystems and verifies identity using one of the big 3 CRAs. They are picky about identification. Addresses and info on your app should match your file info.

 

 

 

 

 

 

So if a bank doesn't close or charge off a seriously delinquent account for four years then the clock doesnt start until they do?  If the answer is yes then technically they can wait forever before actually sta

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So if a bank doesn't close or charge off a seriously delinquent account for four years then the clock doesnt start until they do?  If the answer is yes then technically they can wait forever before actually starting the clock..

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Posted (edited)

Federal law does not allow them to wait for years. They have roughly 6 months to start the 5-7 year period. This was done exactly for the reason you asked about. To prevent prolonging the negative reporting period. 

*Example: A account is overdrawn in January 2020. They would have until July 2020 to close or charge off the account, and start the 5-7 year period.

Edited by tmcgill

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thank you. Im currently waiting on my EWS report to come in. As soon as I verify its clean I will apply for an account again.

 

 

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Posted (edited)

Keep us updated. Also, when an adverse action occurs, you can ask for something in writing that indicates which credit reporting agency was used as the basis for the closure.  Did they indicate it was Chexsystems? If not, I would ask them which one was used. We're trying to pinpoint if it was an internal, federal database - or another source where they got your felony information. This helps for any future apps.

Edited by tmcgill

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On 3/21/2020 at 8:23 AM, tmcgill said:

Keep us updated. Also, when an adverse action occurs, you can ask for something in writing that indicates which credit reporting agency was used as the basis for the closure.  Did they indicate it was Chexsystems? If not, I would ask them which one was used. We're trying to pinpoint if it was an internal, federal database - or another source where they got your felony information. This helps for any future apps.

Armed Forces Bank sent a letter stating they were terminating my account in ten days They did not state which agency they used to help make that decision.  Im assuming it was my Felony record because my chex is clean and I believe EWS was as well. (wont know 100% until I receive the report back). Chase initially opened my account but then approx ten days later the letter arrived stating they were closing my account.  They also did not indicate in the letter what agency was used. Again, I assume since I opened the account online my chex report was clean and the system ran it. Then the back office ran further background and my Felony came up.    So your advice is to write a letter to armed forces and chase asking them  what agency they used in making the decision to close the account.? They didn't initially deny me so are they still obligated to inform me as to what agency/agencies were used?

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Posted (edited)

Whether its closing after the fact or upfront denial, that is an adverse action. You have the right to know what information was obtained by the institution for their decision. Even when I received a CLD from Amex recently, they stated what information was used to make their decision.

14 hours ago, mfins said:

Im assuming it was my Felony record because my chex is clean and I believe EWS was as well

It sounds like you're just guessing here.

14 hours ago, mfins said:

Then the back office ran further background and my Felony came up

Do you know that for sure? Did the adverse action letter state that?

 

Do as centex tmcgill said - request - no - demand to know why your accounts were terminated. For all you know the institution may have used your membership in a protected class for their decision - ethnicity, gender identity, etc. - and discriminated against you.

Edited by IndyPoolPlayer
Got my experts crossed

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Getting the exact source for the felony record will help with future applications.

They had to get the information from some source. Call and ask them point blank. If they won't tell you by phone, tell them you need something in writing. Also, mention you pulled Chexsystems and EWS and those reports are clear (I know you mentioned EWS hasn't sent the report yet).

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I previously called  Armed Forces and spoke with the Lady in loss prevention who sent the letter.  She gave me the standard "we have the right to terminate your account at any time and do not have to provide you the reason why."  Her supervisor gave me the same answer. I will write both banks a letter and ask what agency they used  to come to the decision they did..  I do not believe they are required to tell me  why they made the decision but, if they are required to tell me what agency or information contributed I definitely want to know. Can anyone provide me with the law pertaining to a bank being required to provide the agency/source used to make an account closure decision. I would like to include it in the letter.

 

Thanks!!  Everyone has been very helpful.

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Posted (edited)

The CFPB outlines checking accounts and adverse actions. I would send them a certified letter or fax stating you simply want to know who supplied them with the felony information. State if they don't supply the information, you will make the request through the US Office of the Controller (OCC) and the Consumer Financial Protection Bureau (CFPB).

 

Federal laws (ECOA and FCRA) allow you to get an adverse action letter. Consumers have the right to verify the accuracy of information that causes an account to close.

 

https://www.consumerfinance.gov/about-us/blog/denied-bank-account-heres-what-you-should-know/

 

**We just want you to know where they got the information. This will help you know where to bank in the future.

 

Edited by tmcgill

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I would like to add that I believe LexisNexis (as I believe briefly was mentioned earlier) is an important factor here. I would freeze LN as their information in their reports most definitely contains your criminal history. After freezing, it will be inconvenient in some ways when trying to verify your identity so dont expect a lot of success with online applications. Go in branch. I would not bank with an institution that uses Early Warning Systems in this case, (my opinion) as most of them are not felon friendly. This is the case where I would stick to a chex-only bank. SOME credit unions and banks might use software that will pull LN and chex and will deny you unless you thaw. Call and ask before you go in, dont waste time and inquiries.

 

I helped a friend who is a felon (also federal) rebuild her credit after incarceration. She has a local credit union, Discover Bank for her recurring bills. quoting tcmcgill "Never keep your eggs in one basket"... do not feel sad that you dont have to bank with Armed Forces Bank anymore - they are the same as Academy Bank around here in AZ... will give anyone an account, 1990's style online banking, lack of services and there are plenty of better options.

 

Also start to ponder your transaction history and give it some thought as to some possibilities your account may have caught the attention of loss prevention. They might have started digging but you also may have given them a reason to do so. I say this because when you get a new account you will want to avoid this behavior.. as the better banks have better loss prevention departments and any sort of interesting activity could get your account reviewed. They would rather close an account than take a loss. And if they google your name and something shady pops up - you are out of there. Be cautious and if you are making weird purchases.. try a prepaid debit card for those instead. Good luck.

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20 hours ago, stevensmileyx said:

I would like to add that I believe LexisNexis (as I believe briefly was mentioned earlier) is an important factor here. I would freeze LN as their information in their reports most definitely contains your criminal history. After freezing, it will be inconvenient in some ways when trying to verify your identity so dont expect a lot of success with online applications. Go in branch. I would not bank with an institution that uses Early Warning Systems in this case, (my opinion) as most of them are not felon friendly. This is the case where I would stick to a chex-only bank. SOME credit unions and banks might use software that will pull LN and chex and will deny you unless you thaw. Call and ask before you go in, dont waste time and inquiries.

 

I helped a friend who is a felon (also federal) rebuild her credit after incarceration. She has a local credit union, Discover Bank for her recurring bills. quoting tcmcgill "Never keep your eggs in one basket"... do not feel sad that you dont have to bank with Armed Forces Bank anymore - they are the same as Academy Bank around here in AZ... will give anyone an account, 1990's style online banking, lack of services and there are plenty of better options.

 

Also start to ponder your transaction history and give it some thought as to some possibilities your account may have caught the attention of loss prevention. They might have started digging but you also may have given them a reason to do so. I say this because when you get a new account you will want to avoid this behavior.. as the better banks have better loss prevention departments and any sort of interesting activity could get your account reviewed. They would rather close an account than take a loss. And if they google your name and something shady pops up - you are out of there. Be cautious and if you are making weird purchases.. try a prepaid debit card for those instead. Good luck.

Great advice. If I had to guess what caught their attention was how I get paid. I am paid through ZELLE or Venmo Not direct deposit or check. The amounts vary weekly but some weeks can be what I would consider relatively high amounts  (would like to have more of those of course and, I do not want to come across like I am rolling in dough).  Since its probably not how most of their customers get deposits, or if they do then its smaller amounts that would be my best guess.  Maybe I am being naive to think I am the only one getting regular deposits that way...

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