Checking the members list will only work if the username isn't taken by a banned user. To check it's not taken by a banned user, compose a new Private Message, and type the username you want in the recipient field, if nothing comes up in the drop down then it's not taken.
Banned users come up as PM recipients, but not on the members list. So if you were to type Bullet in the members list, it wouldn't come up, but if you did the PM method, you'd see it's already in use.