- Yes, a felon can open a bank account, as long as you pass through ChexSystems or other traditional types of verification the bank may perform
- ChexSystems is a consumer reporting agency that tracks people who have shown misuse of their checking or savings account
- Felons might run into a problem if their felony is a financial matter– like check kiting, identity theft, fraud or money laundering, then they might have trouble getting a bank account
- Other common reasons for getting rejected for a bank account is a history of too many bounced checks or overdrafts; negative balances or unpaid fees from a current or closed account can pose difficulties; too many accounts applied for over a short amount of time
- You can reach out to a reintegration service in your area– these organizations in the U.S. help give formerly incarcerated people a second chance and can assist with getting a bank account opened up
After serving their sentences, felons usually have a hard time finding their way back to society. The crime committed can get in the way of securing a job, making ends meet, and even reconciling with friends and family.
One of the questions most people usually have regarding felons is whether they can open a bank account.
A felon can open a bank account as easily as any other person. The only constraint that may hinder this process is if the felon was convicted for a financial crime such as bank identity theft or money laundering.
In most final institutions, this may come off as a red flag. And to protect themselves, certain banks may decline the bank account application of a felon convicted for financial crimes.
However, if that’s not the case, a felon can walk into a bank of their choice and open an account.
Are There Special Requirements for Felons When Opening a Bank Account?
Despite having committed a crime, most felons come out of prison rehabilitated. It’s why society needs to be welcoming so that they can have an easier transition.
One of the ways to welcome felons is by enabling them to be self-dependent. If a felon wants to open a business or get employment, they need a bank account.
The good news is that there are no special requirements needed for felons to open a bank account. The only requirements are those that anyone would be asked to provide to get a bank account. They include;
- Legal name. For felons using aliases, they will need to provide their legal names.
- Date of Birth.
- A current address to be accompanied by a utility bill showing proof of address. Felons that are straight out of prison may have to get permanent accommodation. Renting an apartment is a great start. If the felon doesn’t have any funds to finance that, friends and family should offer assistance.
- Social security number.
- Primary identification. For instance, a state-issued ID or a driver’s license.
These are the details needed for anyone to open a bank account, whether you are a felon or not. These documents are also used to perform a ChexSystem that looks into your banking history. Please note that this is not a credit report.
From this ChexSystem report, the bank will look into your banking behavior. They will research whether any of your bank accounts have been closed due to fraud or other financial crimes.
Why Do Banks Ask If You are a Felon When Opening an Account?
Some banks have a section within the account opening process where they ask if you have ever been convicted of a felony.
This question is asked so that banks can ascertain whether you are a risky applicant. Felons mustn’t lie when asked this question.
This is because lying about being a felon may show the authorities that you have a hidden agenda. But, if you are honest, that increases your chances of getting approval on a bank account application.
Why Is It Hard for Felons to Get Bank Accounts?
Even though the bank approval process doesn’t weigh in on whether a person is a felon or not (as long as it’s not a financial crime), many felons struggle with getting bank account approvals. Here are the leading causes for that;
1. Lost documents
As some felons serve their jail time, their documents are most likely going to get misplaced. The risk of this happening is even higher when the felon didn’t initially have a permanent address.
Another factor that contributes to lost documents is serving long jail terms. If a felon finds that their documents are missing, they should embark on getting new documents from relevant authorities. And only then can they open a bank account.
2. Lack of a current address
As mentioned earlier, most felons don’t have a permanent address. And this is a mandatory requirement if you want to open a bank account.
3. Negative results from the ChexSystem
If there is a history of bank identity fraud or mishandling of bank accounts, the approval of the felon can be denied.
4. The last thing is if the felon was convicted for financial crimes.
Getting a bank account should be easy for felons, as long as they meet the requirements. If the application is denied, one can always apply for a second-chance bank account. Alternatively, you can work on getting your record expunged.
My name’s Tony and I own several New Jersey businesses, specifically in North Bergen. Small stuff. A few local markets, a bowling alley, things like that. I started this blog to help you learn how to manage cash- like I have dealing with primarily cash businesses.
