Can a bank or credit union refuse to open a checking account for me? | Consumer Financial Protection Bureau (2024)

FAQs

Can a bank or credit union refuse to open a checking account for me? | Consumer Financial Protection Bureau? ›

A bank or credit union may refuse to open a checking account for someone who cannot provide the identification that it requests. Tip: If you can't get a checking account because you are listed as having a prior problem with handling a checking account, try another bank or credit union.

Yes. Banks generally have discretion to determine to which parties and under what conditions they provide their products and services.

If a bank or credit union denied your application for a checking account, it may be because a checking account reporting company has negative information in its files about your checking history.

Banks may freeze bank accounts if they suspect illegal activity such as money laundering, terrorist financing, or writing bad checks.

Know your banking history

You failed to pay insufficient funds fees after overdrawing your account. You have a history of writing bad checks to merchants. You've committed fraud.

You can be denied a checking account for a number of reasons, such as negative marks in your banking history, suspicions of fraud or an inability to verify your identity.

Common reasons consumers are turned down for a bank account include a history of overdrafts, unpaid bank fees or suspected fraud. Applications can also be denied due to mistakes on one's checking account report. If you've been denied a bank account, ask the bank why this happened.

A bank can deny your request to open an account because of past accounts that were closed due to negative balances, a history of overdrafts or problems verifying your identity. If you're unable to open a bank account, here are some tips on what to do next.

Basic bank accounts are intended for people with bad credit records or blacklistings. The application process for these accounts does not involve a credit check, but they provide necessary banking services.

What bank gives you a second chance? ›

Chime Second Chance Banking

Chime is an online-only fintech company that offers banking services through The Bancorp Bank, N.A. or Stride Bank, N.A. Its Second Chance Banking option boasts no monthly fees and no credit or ChexSystems check.

First, bankers believe it is unfair that credit unions are exempt from federal taxation while the taxes that banks pay represent a significant fraction of their earnings—33 percent last year. Second, bankers believe that credit unions have been allowed to expand far beyond their original purpose.

In some cases, banks are allowed to refuse to open a bank account for an individual. You may, for instance, be refused a bank account if you have previously been declared bankrupt, or you have a very poor credit rating, or you have a fraud conviction. They are not required obliged to explain their reasons for refusal.

File banking and credit complaints with the Consumer Financial Protection Bureau. If contacting your bank directly does not help, visit the Consumer Financial Protection Bureau (CFPB) complaint page to: See which specific banking and credit services and products you can complain about through the CFPB.

Unless your bank has set a withdrawal limit of its own, you are free to take as much out of your bank account as you would like. It is, after all, your money. Here's the catch: If you withdraw $10,000 or more, it will trigger federal reporting requirements.

If you owe money to your previous financial institution, paying it may do the trick. If the financial institution is unable to give you an account under any circ*mstances, shop around. Some financial institutions don't check ChexSystems or have second chance accounts specifically for people with a ChexSystems report.

How long does negative information stay on ChexSystems and/or EWS consumer reports? Generally, negative information remains on ChexSystems and/or Early Warning Services (EWS) consumer reports for five years. Under the Fair Credit Reporting Act, certain negative information may be reported for up to seven years.