Debtors

Financial Services Institutions and ACH

It has come to our attention that many debtors are turning to newer financial institutions after the closure of their traditional bank accounts.  Chime.com is one such example, though there are others.  These accounts are not true savings or checking accounts.

Chime is a financial technology firm which offers banking services, not an actual bank. Chime is covered by FDIC and is safe. However, in the fine print (which no one reads!) most of these services specify that they cannot be used for ACH transactions.

As a result, these financial services institutions are declining transactions processed through TFS.

A handful of these services (including some Meta and Greendot accounts) do allow ACH transactions.

During TFS enrollment, and when a user updates their banking information, there is verbiage instructing the user to use only a checking or savings account.  TFS is in the process of implementing additional alternative payment methods. 

Debtor Attorneys should familiarize themselves with these new institutions and their limitations before advising their clients to use TFS – or setting up a direct ACH with our office.  Using these services could result in an adverse impact on their case.