Identification

• In 2001, Congress passed the Patriot Act to help combat terrorism. The act requires financial institutions to obtain and maintain records that document the identities of account holders. In order to open an account people must provide the bank with identification that includes an ID number, their name, physical address and date of birth. Many banks require account holders to have social security numbers. Many foreign born U.S. residents do not have social security numbers or a permanent U.S. address.
  
  

Types

• Most U.S. states garnish the bank accounts of people who fail to pay child support. The federal government can garnish accounts for unpaid student loans and taxes. Banks pull credit reports or verify information with ChexSystems to determine whether prospective customers have charged-off accounts at other banks. Banks also keep records of charged-off accounts from their own customers, and the information remains of file after takeovers and mergers. People who are unwilling or unable to pay government or bank debts, must manage without accounts.
  
  

Time Frame

• Laws on collecting unpaid child support vary from state to state, but many states garnish bank accounts 10 years or more after the support payments were due. U.S. government debts stay on file permanently. Delinquent accounts on credit reports remain active for seven years after the last activity. If someone makes sporadic payments to clear a debt, the seven years begins again every time they make a payment. ChexSystems keeps records of charged-off checking accounts on file for five years.
  
  

Considerations

• People who do not have bank accounts face logistical difficulties on a regular basis. Banks do not have to cash payroll checks for non-customers, and those that do usually assess check cashing fees. People who only use cash have no recourse if robbed. Most lenders require bank account records when taking applications for home and auto loans; people without accounts cannot even make an application and often have to get high interest loans from private lenders.
  
  

Warning

• Some companies in the U.S. require employees to receive payroll though direct deposit. Employers may allow employees to have funds direct deposited to payroll debit cards. Payroll debit cards enable card holders to access funds at ATM and point-of sale (POS) machines but most charge monthly service fees. Many payroll debit cards only enable people to make withdrawals at ATM machines, and since the machines dispense cash in $20 dollar increments, card holders cannot access all of their funds.