As those who have been convicted of a felony realize, life as they knew it prior to the conviction is over. That doesn’t mean that life is over, just that nothing will ever be the same again.
In addition to the challenges of finding a job, finances typically become a major issue, and their credit rating probably took a major hit.
This blog post will address the issue of whether or not a felon can get a bank account.
- Managing Their Finances
- Opening an Account
- An Opportunity for Felons?
- Recommended Action
Managing Their Finances
Felons may have had difficulty in the past with managing their finances, resulting in a large debt from credit cards, loans, and other sources. One of the issues they may have had was having multiple credit cards and running them to their limit with no concern about paying them off or having loans they did not repay.
Since leaving prison, they may have vowed to live an honest life and may not want to open a bank account. While this may be a common thought, there are important reasons for having a bank account.
Having a bank account can:
- Protect their money rather than keeping it at home
- Help with payment of bills
- Build their credit rating – Having a bank account that they make timely payments on bills will allow felons to establish better credit.
- Be convenient – It is not always possible or even wise to pay cash for everything. A bank account can make this easier.
- Help in getting a loan for car, home, or personal use
In applying for a credit card or loan for a major purchase like a car or house, most companies’ primary interest is in a person’s credit rating.
Opening an Account
There are different types of bank accounts available depending on personal needs:
This is an account for holding money and is the most common type of bank account. The main ways of accessing this money are by writing a check or using a debit card that is linked to this account with its limit being the balance that is in the checking account.
This account can be easily used to pay bills or for most daily spending requirements. Bills can also frequently be paid online with funds taken directly from the account.
This type of account is meant for keeping money on deposit for long-term usage. A savings account often earns interest on the amount of money on deposit on a monthly or quarterly basis.
The typical information requested to open a bank account includes:
- Date of birth
- Social Security Number
- Primary Identification – Driver’s license, state-issued ID card
- Secondary identification – Credit card, utility bill, rental agreement for current residence
The reason for requiring this type of information before opening an account is that it allows a bank to learn about someone’s financial past before they open an account. They conduct a bank history report, which is different from a credit report.
A bank history report shows if a previous account was “closed for cause.” This report shows if there is a record of mishandling other bank accounts. If so, the bank could refuse to open a new account.
There are a few reasons a bank account may be closed for cause:
- Failure to pay insufficient funds fees after an overdraft
- A history of writing bad checks
- Committing fraud
Financial companies access bank history data through an account verification service.
An Opportunity for Felons?
Other items from a felon’s history might or might not be a problem. If someone has been convicted of a felony, it depends on the type of felony and the bank. For example, financial crimes (such as money laundering) can prevent a person from getting an account.
It is important to be honest when applying to open a bank account. If a felony isn’t disclosed but is found on a background check, this constitutes fraud and is punishable by jail time. It is a crime to falsify a bank account application which could result in being sent back to prison.
In order to be successful in getting an account, it is essential for felons to be honest about their background. They are already viewed with negative perceptions of being dishonest, untrustworthy, and unwilling or unable to follow directions from authority figures.
Having their record expunged can give them the chance needed to begin with a clean record and succeed in opening a bank account. Expunging a criminal record allows anyone to honestly state on an account application that he or she has not been convicted of a crime.
It would be worthwhile for a felon to do what it takes to get a bank account. Having his or her record expunged and additional education can make the difference for a felon in succeeding in getting a bank account and re-establishing a firmer financial footing.
Having support from family, friends, or previous employers can make a huge difference. A felon doesn’t have to be defined by his or her crime. We are not defined by our mistakes but by how we recover from them. He or she can begin again and live an honest life no matter how difficult it might seem.
What do you think about this blog post? Have you or someone you know been in the situation of trying to get a bank account with a felony? What was that like for him or her, and how did he or she achieve success? Please tell us in the comments below.