for deposit accounts, we need an authorization to run the signer against the chexsystems. Can we tell the owner that the signer is denied based on the info received from chexsystems?
A little different from applicant/co-applicant. They are both responsible for credit and info can be shared.
However, signer is not responsible for that deposit account.
Does this create any privacy issues?
Thanks.

This is not a credit account right? So, if you aren't going to allow a signer because of ChexSystems, you would have to tell the owner. You, however, are not releasing the information regarding why you made your decision, just that the person they wanted to add as a signer can contact you with any questions.
That's how we have handled it. Not sure what privacy issue would be impacted here - again you are not releasing any information about the signer. I would not, however, tell the owner that the denial is based on info received.