Denying Account Due to the Chex Systems Results

Answered by:

Question:

Our bank uses Chex Systems to help determine if we are going to open an account for a customer or not. In our procedures, it shows we will open an account unless Chex Systems Account Action reflects Decline, whether or not there are closures for the individual. My question is, if we see there are closures, but the Qualifile Score happened to be in our acceptable range where it approves the account, are we still able to deny the account due to the Chex Systems results, or is this unfair practice? If we can't deny accounts due to closures that have an acceptable Qualifile score, can we rewrite the process to say any individual with an unpaid closure can be declined to make it fair?

Answer:

by Randy Carey:

The bank is free to decide how and when and for whom to open deposit accounts.

Answer:

by Jim Bedsole:

From a UDAP perspective, you'll want to make sure whatever you define your process to be, you apply it consistently. While fair lending regs like ECOA and Fair Housing Act don't come into play on the deposit front, regulators have started using UDAP/UDAAP to get at potential discrimination on the deposit front.

Answer:

by Randy Carey:

Any examples of such findings by the regulators would be appreciated.