When you apply to open an new account at a bank that is a member of, and uses, ChexSystems Inc. they will run an ChexSystems inquiry as part of their new accounts procedures.

If that inquiry returns any negative information, particularly if there is an unpaid outstanding balance owed to another bank, you will often be denied from opening the new account.

When you attempt to try at another ChexSystems member bank it very likely that the exact same thing will occur again.

Your CheckSystems report can remain in their database files for 5 years.

It is estimated that approximately 80% of all banks nationwide are members of ChexSystems. Finding a bank that does not use ChexSystems can be very difficult... but not impossible.

Critics of the ChexSystems database say that in many cases, it is arbitrarily used to disproportionately treat people. Many people in ChexSystems are not people who committed an intentional act of fraud; they’ve only had an incident, or two, of misjudgment.

They usually are of modest means. People who many banks assume will not maintain high balances in their accounts and will not be very profitable for the bank.

There has been an ongoing criticism that feels many banks are using ChexSystems as an excuse to weed out low-yielding customers.

Denied access to checking, those stuck in ChexSystems are forced for five years to use expensive check-cashing services and to undergo the inconvenience of paying bills with money orders or cash

The system currently contains approximately eight million names and is used by banks to track people with histories of checking account problems.

Reports from those inside the banking industry say that on average associated administrative cost on new accounts can be approximately $200.

We all know the basic concept that banks make their money by lending out the money maintained in checking and savings accounts.

Those who have been reported to ChexSystems do, as a group, carry lower balances in their accounts. Often they are those whose payroll check is deposited on payday Friday, and at or near zero balance before next payday. Checking accounts do not generate a lot of revenue for the banks to begin with, and certainly not accounts that on average maintain a nominal balance.

By eliminating anyone with a ChexSystems record, bank are inexpensively able to weed out those who they feel will cost more than they are actually worth to the bank.

Critics of the system feel it has very little to do with your true risk as an account holder. It has everything to do with the bank's bottom line. Never mind the fact that millions of Americans are harmed in the process.

Why is this wrong?

Banks benefit from the protection given to them with heavy government regulation. But with this benefit comes some responsibility to serve the public… something the banks are escaping, legally!

Government, by letting this continue, is failing its citizens who now have no way to exchange the benefits of their labor (e.g., direct deposit of their pay) for goods and services.

In addition, more and more landlords, and other organizations, are now requiring a checking account as a minimum requirement.