Although ChexSystems is so commonly used by banks and credit unions that customers tend to regard it as universal, this isn’t actually the case. There are banks that don’t use ChexSystems to verify their customers.
Advantages of Non ChexSystems Banks
* The primary advantage is that these banks and credit unions make banking services accessible to people who would otherwise be blacklisted from the system. Obviously, that’s not an option that most people can accept in this day and age. A checking account, preferably one with a debit card and ATM access, is practically required in order to live a normal lifestyle in the United States. Some employers now even refuse to issue paper paychecks and insist on paying you using direct deposit. Nobody wants to be in the position of having to explain to his boss that he can’t get a checking account.
* Another advantage of non ChexSystems banks is that some people have privacy concerns and they just don’t like the idea that their bank is looking them up on lists, or even worse, sending their name into a “bad customers” list maintained outside their own control. It’s one thing for your bank to not like you; it’s quite another thing for them to rat you out to every other bank in the nation.
* The final advantage to non ChexSystems banks is that if you do happen to be blacklisted from larger financial institutions, a bank not in the system will give you an opportunity to repair your banking status and reclaim your good name. By maintaining a good reputation at your new bank for a number of years, you can recover from whatever you did to get listed with ChexSystems in the first place. Your name will not stay on the ChexSystems list forever, but it will take dedication and diligence on your part to restore your financial reputation so that a larger bank will take you in the future.
Disadvantages of Non ChexSystems Banks
* The most significant thing you will notice right away is the cost. A bank that does not verify its customers knows that it will have a higher than average percentage of bad ones, leading to higher costs for the financial institution. Since they are in business to make money, these costs are passed along to customers. It’s unusual to find a free checking account with a non ChexSystems bank, for example. You may have a monthly fee, a fee for each check written, and even another fee if you don’t write any checks at all in a particular month. There will also be ATM fees and possibly additional fees if you skip the ATM and go inside to speak to a teller.
* Customer service is also lower in most non ChexSystems banks. Due to their higher costs that come with dealing with customers who bounce checks or overdraw accounts, institutions save money by hiring fewer tellers. Some non ChexSystems banks may try to get you to do most of your transactions in ways that don’t require a human teller, such as using ATMs or banking online.
That said, there are some non ChexSystems banks that offer free services. If you look hard enough, especially online, you may be able to find one.
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