We are having a debate at the bank, regarding whether or not bank employees are allowed to discuss with account applicants the information reported in the applicant's ChexSystems report. When something is reported by ChexSystems as part of the new account opening process, how should a bank employee respond??

1) provide details found within the report, such as: "there is account abuse/misuse reported by ABC Bank" or "XYZ bank reported NSF activity or a charge back on your account," etc. OR
2) should it just be broadly stated, such as: "there is information in your ChexSystems report that does not allow us to continue with opening an account." Then inform the applicant that he/she may contact the agency (ChexSystems) directly for information about their report - and provide their contact information to the applicant.

How do most banks handle this or how are banks required to handle this? Thanks!

It's been a number of years, but my contract with the CRAs specifically stated that the information I received was for bank use only and our contract prohibited us from disclosing to the consumer anything more than the adverse action notice.

Check with your vendor representative and have legal counsel review your vendor contract. If there's no prohibition in there, then it is a business decision.

We provide an adverse action notice at the time. ChexSystems provided us with sample forms that we could use. According to ChexSystems, certain information has to be provided to the customer on the AAN when denying a bank service due to a ChexSystems report. We don't really discuss specific information, we just provide the AAN and explain to them that they need to contact ChexSystems for more information.