Not having access to checking accounts is a serious problem for consumers in debt. More and more, banks deny service to people who've had problems balancing their budgets in the past.
ChexSystems is the tool they use. If you have a bounced check or NSF and the bank can't collect, you'll be reported to ChexSystems, a sort of "credit bureau" for bank accounts. Once you've gotten a negative ChexSystems report, it'll be five years before you can get another checking account. Welcome to the world of the unbanked... you'll be cashing your checks at a pawn shop and buying postal money orders to pay all of your bills. It's a very expensive way to handle your finances.
This is a problem for people struggling with a lot of debt, because it's easier to have months where the budget comes up short and the occasional overdraft pops up.
But that's not the worst part. I have worked with hundreds of people who were stuck with ChexSystems, and not all of them had bounced checks or overdrawn their accounts. Surprisingly often, banks reported customers to ChexSystems for not paying fees. I saw a lot of people with very solid banking histories, but neglect to pay the fee for your safe-deposit box, and you're reported to ChexSystems as a risk. I think banks are using ChexSystems reflexively as a punishment against customers they have a beef with, rather than as a tool to track which consumers have been unsuccessful in managing their checking accounts.
I looked for a long time for ways to help consumers who were saddled with a negative ChexSystems report. There were a great many services that offered to sell you a list of banks that didn't use ChexSystems, usually for $35-$100. I bought one of those lists years ago to help my clients; there were maybe a dozen banks on the list, and only 3 within fifty miles of my office. And the list was outdated; two of the three on that list were using ChexSystems after all.
A friend who runs a credit union told me that since the Patriot Act, he is required by law to use ChexSystems. I think, after doing a bit of research, that isn't exactly the case. The Patriot Act requires banks to obtain, verify, and maintain identifying information about everyone who opens an account. Efunds, the parent company of ChexSystems, developed a software system to help financial institutions comply with section 326 of the Patriot Act. Their database is integrated with ChexSystems, so the end result is that almost all banks now use ChexSystems, but they don't necessarily have to.
This list at creditservicer.com lists the financial institutions that don't use ChexSystems. It is updated frequently, so it should be accurate. As banks change their policy, customers submit the information to this site so no one is misled. Best of all, they're not trying to sell it to you for $35.
You'll notice on the list that some of the credit unions and banks do use ChexSystems, but they will make exceptions and give customers with negative reports a second chance. Some of them, like the great Wescom Credit Union in SoCal, use Get Checking. Get Checking is a nation-wide progrom that's basically a "traffic school" for consumers with checking problems. Participants take a 5-hour course on checking account management and when they graduate, they're given a certificate to take to participating banks and credit unions. Then they can get a probationary account. It's a great program to help people restore their banking privileges.
For more information on ChexSystems, check out this hatchet job at consumeraffairs.com.