ChexSystems

ChexSystems is a check verification service and consumer credit reporting agency owned by the eFunds subsidiary of Fidelity National Information Services. It provides information about the use of deposit accounts by consumers.

Eighty percent of commercial banks and credit unions in the United States use ChexSystems to screen applicants for checking and savings accounts. eFunds claims that their services are used in over 9,000 banks, including over 100,000 individual bank branches in the United States. Services include verification of identity, reports on account history, and transaction monitoring.

A ChexSystems report examines data submitted by banks in the past five years. A report may describe banking irregularities such as check overdrafts, unsettled balances, depositing fraudulent checks, or suspicious account handling. Banks may refuse to open a new deposit account for a consumer that has a negative item reported. In 1999, ChexSystems was classified as a consumer reporting agency governed by the Fair Credit Reporting Act. Therefore, consumers may retrieve a ChexSystems report annually, free of cost. They may dispute negative items and demand proof of the data contained in the report.

Credit bureaus report both negative and positive information about a consumer's use of credit; a ChexSystems report specifies only negative information, if any, about a consumer's use of deposit accounts. Thus, if two customers have both made the same banking errors in the past, while one of them has maintained a number of positive banking relationships as well, both customers might be declined when applying for a new account. The Greenlining Institute has published a report indicating wide disparities in the criteria banks have used when deciding whether to report negative items to ChexSystems.

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