ChexSystems

We currently run ChexSystems on all individuals who open a checking account. Are we required to obtain written authorization from the customer prior to running ChexSystems, or is written notification sufficient? Our frontline is currently notifying them verbally at the time of account opening. Thanks in advance for the input!

I'm not aware of any need for written authorization. We have the USA Patriot Act notification prominently displayed, as well as the desk signs that advise that we check each account with Chexsystems. We also do get a signature with regards our obligation to verify customer identity, but it does not specifically say we're going to run ChexSystems.

FIS ChexSystems does not require you to display the signs however you may want to check with your internal compliance and/or legal teams to determine if they feel it’s a requirement as part of customer notification.

The above is what we received from FIS. We are continuing to post the sign and even placed a statement on our online accouht opening. Our reasoning is if someone was declined at another financial institution it may stop that person from applying at our bank.

You need to disclose to your customers you verify all new accounts through ChexSystems. You can instruct your staff to do this verbally, but you should be able to contact ChexSystems to provide you little desk signs. For beset practice, these signs should be displayed at all account opening desks, therefore there is no question about customers being notified, no one can claim "Well the person at the desk didn't say that."

Your permission for pulling the consumer report comes from the fact the customer applied to do business with you. That right is not conditioned on your providing notice of your intent.

Posting the little signs is a courtesy and something of a time saver...sometimes the deadbeats see them and don't even bother to sit down.