ChexSystems, Inc. is a subsidiary of Fidelity National Information Services, Inc., a publicly traded company (traded on the NY Stock Exchange under the symbol FIS). You won’t find much information about ChexSystems, however, on the FIS website, no doubt because they don’t want to be contacted by angry consumers. ChexSystems was incorporated in 1985 and is based in Woodbury, Minnesota with the aim of helping financial institutions identify applicants whose bank accounts have been “closed for cause” such as insufficient funds or bad check writing and who may pose a risk for fraud or account abuse. It does this by keeping consumer records from participating financial institutions. To be sure, the service it provides does help banks avoid fraud and remain profitable. But it also makes it difficult for many people who have lost checking accounts be able to get a new account with another bank.

As a consumer credit reporting agency (CRA), Chex Systems must adhere to the Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission.

According to the FDIC 87% of banks use ChexSystems to screen people before opening new accounts. Be cautious about the various websites that promote lists of banks that don’t use ChexSystems. In addition to charging you money for the list, often these lists are out of date, inaccurate, or woefully incomplete. In addition, banks may simply be using a competing list like Telescan or Telecheck.

Under Federal law, you have a right to know what is in your file from any CRA including Chex Systems. Simply submit a request in writing and the company will have to send you your file. You can order your report for free directly from Chex Systems. If you let the company know that a bank has denied you an account within the past 60 days because fo the ChexSystems list, you should be able to get your report for free. The standard fee is $8 for the report.