Here's a fun topic to generate some discussion..

A consumer is reported to Chex Systems by a Bank several years (8) ago for "suspected fraud". Because of multiple mergers, the consumer is unable to figure out which bank now holds the records of the cause of the reporting and can't get it removed. The consumer goes to a Bank to attempt to open an account, and is turned away because the Bank says they have a "non-overridable" not to open accounts with the "suspected fraud" notation, regardless of age of the reporting.

Due to the generic nature of "suspected fraud", could the Bank that turns the client away be accused of discrimination, as they have no idea what specifically caused the reporting and have not instilled time frames or other parameters in their policy? It's a little like an adverse action letter in lending. You can't just tell a consumer you are turned down "just because". You must specify reasons like derogatory credit, insufficient cash flow, lack of collateral, etc. etc. The Bank's Credit Policy must specifically address what constitutes "derogatory credit" and the other turndown reasons. Wouldn't the Deposit Account Policy have similar requirements?

Thoughts?

There are a couple of things I will disagree with in the question as asked.

First, under the FCRA records can only stay on Chexsystems for 7 years, then they fall off. Second, even if the customer cannot figure out which institution to contact, the customer can dispute the accuracy of information through Chexsystems rather than initiating a direct dispute. If the merged banks haven't kept their contact information current, they will not respond to the dispute letters Chexsystems sends out and the record would be removed in 30 days. If they do respond, Chexsystems will provide the contact information of who responded so the customer can take the issue up with the Bank.

As to the other question asked, being reported to Chexsystems is not a protected class so there is no discrimination. Hand the customer an adverse action notice and let them deal with Chexsystems so you can move on to what is next.