A lot of banks today now use the ChexSystems method of authenticating and reporting financial transactions, but what if you don't want this hassle when you have to do business? There are, in fact, some banks that do away with this nuisance of a security system when you need your financial transactions done quickly. Getting through one more step of the way will still get your money to the other side of the transaction safe and sound.
Having ChexSystems can certainly help add that layer of security to your transactions, if you would rather go through the motions. Many aspects of this system, however, have drawn plenty of criticism and controversy over the years, so perhaps you are still second-guessing the effectiveness and necessity of this kind of measure. Whether or not you want ChexSystems to be a part of your next transaction is still entirely up to you.
Listed below is an in-depth compilation of non-ChexSystems banks you may discover online. These particular banks do not utilize ChexSystems to initiate an account; although, they might access a credit report with the purpose of authenticating your identity. A bank that does not use ChexSystems may additionally allow clients to obtain a second chance account with present or previous ChexSystems records to start an account. A few states may be harder to locate a bank that does not employ ChexSystems. Please post your success stories and comments.
What Is ChexSystems?
ChexSystems is a verification service used on electronic funds and checks. It is also an agency that deals with reporting consumer credit, much like other agencies like TransUnion. Unlike the others, however, ChexSystems provides banks with data that shows just how customers handle deposit accounts rather than just credit relationships.
ChexSystems is used in 80% of all credit unions and banks in the United States alone. The kind of services they offer to these member banks include the reporting of financial irregularities like check overdrafts, bounced checks, or other suspicious activity done within an account. A pitfall of this system that if a customer is reported to have a negative item at any point in time, then the customer will not be able to pen a new account in another bank that uses ChexSystems.
Reporting practices like these have drawn plenty of criticism from consumers and industry experts alike. While most credit bureaus report on both positive and negative aspects of a customer's credit history, ChexSystems has a history of emphasizing the negative aspects. They do not have any tangible means of gauging risk assessment for their member banks either, such as credit scores.
Even with new regulations and training under way, many people still choose not to join a bank that uses the ChexSystems method of credit reporting. Whether you have been unable to open a new account with a bank because of their reporting system, or if you'd rather prevent it from ever happening, you can rest easy in knowing that you have a choice.
Banks That Don't Use ChexSystems
A lot of states and regions in the US will have plenty of banks and credit unions for you to choose from that don't use ChexSystems and/or provide second chance checking accounts. There are many other ways you can transact without having to deal with ChexSystems, or a bank that can only be found in a specific area! Here are a few of those methods, if you are interested.
- Horizon Card – A credit card that claims to have no credit check, guaranteed instant approval, reports to a major credit bureau, and offers a guaranteed $500 unsecured credit limit.
- Guaranteed Checking Account – This site does not check your ChexSystems report or your credit history and offers a guaranteed checking account. It's an online bank though so if you need to be able to walk into a facility, it may not be for you.
These alternatives are great if you'd rather not have to interface with a bank to start an account. If you would rather go straight into a bank to negotiate terms when starting an account, then these institutions may be valuable allies when avoiding ChexSystems like the plague:
- SunTrust Bank – This full-service bank offers you plenty of ways for you to manage your finances without dealing with ChexSystem. Online banking, checking accounts, bill payments, and much more, if there is a branch located near where you live.
- EverBank – Opening an account will require a minimum balance of $1,500, but that might be the cost of having to get around ChexSystem's draconian credit reporting methods. You will be able to take advantage of typical bank services here, though, along with mobile and online banking.
- US Bank – You can avoid the ChexSystems in some US Bank branches by visiting in-store branches. Second-chance banking also allows you to open up an account here, without having to worry about bad feedback from ChexSystems.
- BBVA Compass – Compass offers another second-chance account that you can use to full effect. A minimum deposit of $25 is required, along with a monthly fee of $13.95. You will be granted the ability to write an unlimited amount of checks with an account here.
- Frost National Bank – For people who have a negative ChexSystems record, Frost National Bank is willing to grant you an account on the condition that you receive a letter from the reporting institution that you do not owe them any money. The account is known as Frost Direct and you’ll be given a Visa CheckCard.
- Skylight Financial (Previously called DBC Financial) – This online bank, for $6.95 a month, will give a Stratus Card to any person with direct deposit whether they have a good or bad ChexSystems record. The drawback to this bank is the $19.95 sign-up fee. An ATM card is given for both debit card transactions and cash withdrawals.
Internet Banks To Steer Clear Of
It’s important to understand that there are good banks and bad banks in both the real world and virtual one. And, the ones that rely solely on the ChexSystems information to grant or deny new accounts should be avoided at all costs. The Internet banks you should steer clear of include:
If you have the money, consider a brokerage or market fund account and use it to attain your checking, savings, Visa Check Card and ATM services.
Some of these banks, and many others, might also use the ChexSystems account, but not as prominently as you might think. They may offer ways to circumvent and avoid it entirely, so be sure you put in a call to the bank or service you are thinking of and inquire about it. Either way, you now have plenty of choices when it comes to non-ChexSystems banks today, so take time to look around!