Can a bank run a full credit check to only open a checking account?

Question

I only opened a checking account at a bank. The bank ran a full credit report on me. This shows in my credit report and hurts my score.

I did not apply for credit, could the bank run a full credit report on me? Did the bank violate the laws?

Wow! so many answers in such a short time. Thank you for all of your answers.

A few things I would like to add:

1) Before I opened my account, I called the bank and they told me they would only run through chex systems to see if I would be a good customer.

2) When I opened the account, the bank gave me a package which had a booklet that said they may run a credit report.

3) As of today, I called the bank to ask the same question: "Do you run a full credit report on a customer to only open a checking or a savings account?". They said "No". I am tempted to record the conversation but am not sure whether or it would be legal.

4) I check with other banks, big names like Chase, Wells Fargo, Washington Mutual. They all said "No, we don't run full credit report just to open a checking or a savings account." Chase even specified: "We only run a soft-touch credit report which does not hurt your credit score."

5) My credit score was in fact hurt.

Answer 1

Sometimes banks will check to make sure that you have no fraud or financially suspect activities in your past. It's nothing personal, but some areas still have lots of problems with check kiteing and what not and the bank is trying to prevent problems down the road. I doubt that having a bank check your credit will impact your score, unless you opening a lot of accounts (credit card, mortgage, personal loan, etc.) over the course of a year. Whether the bank violated any laws would probably depend on where you live. If you are worried, send an email to the Bank Regulator in your state or region and explain your situation (Check the source list for a link to a site which lists who regulates banks in what states). They will be able to help if the bank did indeed cross the line. Good luck.

Answer 2

they should have only run a chex systems check on you not a full credit report. The reason for the checks systems check was to see if you have ever had bad checks and if they are still in bad standing the only time a full credit report is done is when you get a credit card, buy something, or even get a loan. No bank should do that you need to talkto the bank about what they did to your credit score. Since this is not a credit issue they had no right to pull yours up at all.

Answer 3

Yes, some banks do run a full credit check, in addition to the chex systems check. The bank did not violate the law.

Answer 4

The Fair Credit Reporting Act protects a person from having businesses obtain their medical information (and potentially using it to deny them credit or to discriminate against them when applying for a job, etc.) but it also prohibits a credit report from being pulled, for example, by a nosy neighborn who happens to work at the bank, and wonders what kind of credit you have.

Section 604 (a)(3)(F) of the act permits a financial institution to obtain a credit report if there is a "legitimate business need" to. Your application to open an account would be considered a legitimate reason.

Credit reports are also used to ensure that someone hasn't stolen your identity and is attempting to establish an account in your name.

You may find that the credit report will clarify if the report was pulled as an inquiry, for opening a deposit account or if the individual was trying to obtain credit. Generally, a credit report used to open a deposit account will not affect your rating. But keep in mind that each time you apply for that credit card you may never use, just to get the promo item, that WILL affect your score.

At times, banks use the credit bureau services to make sure you are not on the OFAC list (people, businesses and entities that are known terrorist/drug dealers or enemies of the US), since they are prohibited from conducting transactions with anyone on the OFAC list.

Chex systems will notify the bank if you have a bad banking history and I believe, they will/can also notify the bank if you are on the OFAC list.

I would document the date you talked with the bank representative and who you specifically spoke with concerning their statement they don't pull a credit report when opening a deposit account. I would test this by calling all their branches, documenting each answer and each person you speak with. Though they may be allowed by law, it is a deceptive practice to say they won't when they do.

If you find out you were merely talking to an uninformed person at the branch you called, I'd mention it to their supervisor. If you find out that they mislead callers intentionally, write a letter of complaint to their Compliance Officer, find out who their government regulator is (generally one of the following: OCC, FDIC, Federal Reserve, or OTS) and write a letter of complaint to them as well.

As one of the others also noted, READ YOUR DISCLOSURES BEFORE you sign.

Answer 5

this is old post but I will answer to clear up some confustion, used to work at a bank
many different one's.. Some banks will run Chexs system report this will be about 90% of banks, ALL big banks will run this..

Some will ONLY run a credit report not a chexs report. This will be for smaller banks and maybe credit unions. A credit report might be more important to them a negative chexs report. You can screw up in the past on your banking, but if you have decent credit it shows you are responsible.

Some banks if they see a negative chexs report but it's old or paid they might go ahead and run a credit report just to verify you are ok.

Some banks will run a Telecheck report like USAA uses this.. It all depends on the bank. I openend a account with PNC and they ran my credit

Answer 6

Yes they can. Chase and Bank of America usually run a full check. They want to make sure that you are responsible enough for a checking account.

Answer 7

Hi!
Yes..they can..and you even gave them permission.

Please...read everything before you sign it.

It is quite common for banks to pull credit on you..even if opening a savings account. They have to these days..they are required by federal law to verify information before opening an account..and that's one of the ways they do it.

Answer 8

Did you read what you signed when you were opening the account? If you signed an agreement stating they can, they can.

Answer 9

Yes they can.

Answer 10

Yes they can.