Bank of America and ChexSystems Policy

As you may know, Bank of America uses ChexSystems to verify new bank accounts. This basically means that you will not be able to open an account at Bank of America if you have been reported to ChexSystems by another bank. Once reported to ChexSystems, your record remains there for 5 years.

However, there are certain conditions in which Bank of America they may allow you to open a new account:

  • Bank of America will disregard ChexSystems reports based upon non-fraudulent activity that are older than three years.
  • Bank of America will disregard a ChexSystems report for non-fraudulent activity that is older than a year if the overdraft has been paid.
  • Bank of America will disregard a ChexSystems report for non-fraudulent activity if the applicant completes a financial responsibility course and has repaid the overdraft.

You might take this as good news, but don’t celebrate yet. Did you know that Bank of America uses another risk management system on top of ChexSystems? If you haven’t heard of it, it’s called Early Warning Services (EWS). The company behind the service is Early Warning Services, LLC – an organization formed through a collaboration of some major banks – including Bank of America, BB&T, Capital One, JPMorgan Chase and Wells Fargo.

Early Warning works just like ChexSystems. They provide intelligence and data to member banks and credit unions to warn them of any problems with an applicant’s banking history.

So, what does this mean for you? Well, if your bank happens to use Early Warning Services, they may decide to close your account later on, even after you have successfully opened a new checking/savings account and passed the initial ChexSystems check.

As if ChexSystems wasn’t enough of a problem, this adds another hurdle for people looking for a solution to ChexSystems.