Reporting to ChexSystems - Required?

Posted By: CSB98

Reporting to ChexSystems - Required? - 12/01/20 03:55 PM

We utilize ChexSystems when opening deposit accounts. We have been notified by FIS that we are required to report any charged off deposit accounts to them. Is this truly a requirement under FCRA? I thought reporting to them was at the discretion of the financial institution.
Posted By: rlcarey

Re: Reporting to ChexSystems - Required? - 12/01/20 04:32 PM

Well, you either have a contract with ChexSystems or you do not. Usually, if you have a contract with them, then such requirements are a condition of using their services. They are not going to allow you to use their services and then not report your own accounts to them accurately.
Posted By: RockChucker, CAMS

Re: Reporting to ChexSystems - Required? - 12/01/20 06:08 PM

Besides, what use is the product if the participating banks are not reporting cahrged off accounts? Would you use it if other banks didn't report? I thought not.
Posted By: CSB98

Re: Reporting to ChexSystems - Required? - 12/01/20 06:13 PM

We don't necessarily use it to determine if we are going to open an account. We mainly use it to verify information and run OFAC checks prior to the account being opened.
Posted By: rlcarey

Re: Reporting to ChexSystems - Required? - 12/01/20 06:21 PM

I think the point that I was trying to make is that it comes down to the services contract you have with ChexSystems and FIS. You need to start there. If it is not in your contract with them as a requirement for using their services, then ask them point blank as to what the heck are they talking about.
Posted By: TryingtoComply

Re: Reporting to ChexSystems - Required? - 04/16/21 05:32 PM

We received a similar notice and explained that we don't close an account for reasons that require reporting very often. As for using ChexSystems for your OFAC verification, your core system or AML software may offer an alternative.