Our bank offers a CD placement program for customers that want to always be covered by FDIC insurance. For a fee we assist our customers by finding the best interest rates on CDs at other financial institutions.

It has been brought to my attention that when we make these arrangements, the financial institution that we are placing the funds with does a ChexSystems inquiry on our employee. The employees of our bank are now getting concerned about the numerous inquiries on them and no longer want to act as authorized signers.

Anyone have any ideas?

This sounds to me like a FCRA issue. What is the other financial institution's "permissible purpose" for doing a Chex inquiry? Is your employeee going to be joint on the account? A Chex inquiry is a consumer report as defined by the FCRA, and you can'r just pull one on someone for no reason. Have you asked the other FI why they are doing this? I would be REALLY curious.
Leslie

If your employees are acting as authorized signers on these CD's, then I believe the other banks are justfied in pulling a ChexSystems report.

JacFSB
I agree. But it sounds as if the employees are merely assisting the customer in finding another institution. If the 1st bank's employees are not listed on the account as agents or anything else, then what is the purpose? Is the other FI just trying to determine that the referral is legit? There's got to be a better way!

Leslie,
I agree that this woudl be a pretty poor way of authenticating the referral. Perhaps we coudl defer back to the original poster-

How are these accounts titled?

The accounts are titled ABC Bank as Agent for John Doe.

Our employees are authorized signers.