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Why can't I open a bank account?

Short answer

A bank can refuse to open your account if it can't verify who you are, or if a checking account report from a company like Chex Systems shows unpaid negative balances, bad checks or suspected fraud. When a report is the reason, the bank must tell you which company made it, and you can get that report free.

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By · Founder of ITIN Club

Updated

The usual reasons

ReasonWhat it meansWhat to try
The bank can't verify youThe federal ID rule requires banks to decide when not to open an account they can't verifyApply in a branch with original IDs that show your name spelled the same way
Your details match someone elseChase lists this as a reason. It can be a typo or identity theftCheck every field, then check your credit reports
An old account closed with a negative balanceUnpaid overdrafts or fees show up in checking account reportsPay the old bank. Some banks require it first
Bad checks or suspected fraudAlso reported, even on a joint account where the other owner caused itGet the report and dispute anything wrong
No SSN or US addressMany online forms require bothAsk a branch. See do you need an SSN

How to fix a bad report

Banks share account history with checking account reporting companies such as Chex Systems and Early Warning Services. The CFPB explains your rights.

  1. 1

    Read the denial notice

    If a report was behind the denial, the bank must send an adverse action notice with the reporting company's name and contact details.

  2. 2

    Get your free report

    You can ask that company for a free copy after a denial. Nationwide companies also give one free report a year on request.

  3. 3

    Dispute errors in writing

    The company must investigate and fix inaccurate information. Most negative items can't stay on the report after seven years.

  4. 4

    Try a lower-risk account

    Many banks offer accounts that can't be overdrawn, and they rely less on these reports. Chase also points to second-chance checking accounts and prepaid cards.

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Sources

  1. Why was I denied a checking account? — CFPBconsumerfinance.gov
  2. Chase: why you can't open a bank accountchase.com
  3. 31 CFR 1020.220: Customer Identification Programecfr.gov

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