HELP: Local bank closed/terminated my account for no reason??

[Anonymous]

 Today I received a certified letter from Regions saying my 10+ year old account was closed on Thursday and they sent check for the balance.  The 1-800 number couldn't tell me why my account was closed, they told me to go into a branch.  I called the branch who told refused to tell me why it was closed, just said they had a right to terminate it and they did.  Said a "back office" made the decision, I asked to speak with the back office and she said she can arrange a call back... I'm not expecting anyone to call back.

Googling the issue it seems like a bank closes an account if (1) There are routine problems with the account (negative balances, bounced checks, etc.), which doesn't apply to my account.  (2) If they think there is fraud/money laundering. 

With the second issue....

(1) I had PayPal ban my account 10+ years ago, they found out my account was opened two weeks before my 18th bday, seems like they are notorized for banning accounts.  My mom let me make a paypal account in her name.  I sell routinely online - mostly old tech, I upgrade laptops/iphones every time, and some old clothes.  The money from PayPal went into my regions.  I'm not sure if they can see my Paypal is not in my name?  But, I've been moving money from paypal to regions for 10+ years, and if anything a decrease in the number of transfers the past few years.

(2)  I help pay some of my parents/little brother's bills.  For example their car insurance sends me small checks (maybe $10-$15, 2x a year, not in my name) for safe driving, I deposited these into Regions.  But this has been going on 3 some years.

(3)  I was in a serious relationship and helped pay the mortage, but when we parted ways she returned my mortage payments, about $60K.  I planned on gifting the amount to my parents when they visited so they can pay off their house (had $50K left on it), but they refused.  They were actually planning on downgrading to another house.  All their kids have families/jobs elsewhere and weren't in the area enough and the yardwork was too much for dad.  So I opened a deposit box in Regions, my mom's on the box - name, ID, picture, fingerprint (not sure if it's a good thing or bad).  Of the $60k, I moved $35K into regions, and $25K into another bank - the other bank didn't terminate my account.

The $35K I moved into regions were in small swings, each around $5k each.  Maybe $20k total over the summer June-Aug. 2020, $5K in Oct, $5K in Feb and the last $5K a week before they terminated.  Normally when I go there I have work attire on, but the last time I went I had the day off and had workout clothes on...  For what it's worth I don't keep much money in the account, I transfer it into Ally because better interest.  I guess if they see a guy in dirty workout clothes moving cash from a box into regions then into Ally it's suspicious?

I wasn't worried about my PayPal account 10 years ago since they had a reason (I was under 18) and PayPal is kind of notorizious for limiting/suspending people, but I've never heard of a physical bank terminating accounts.  I asked if I can open a new account and they said no, so it seems like I am banned for life?  Live in a small town with limited banking so kind of need Regions, plus it's one of the few banks here with a some what decent local/regional presense. 

[MudkipsRKooL]

sounds like nothing to do with paypal 10 years ago. It probably has to do with moving large amounts of money like 35K to 60K etc... Most likely you are violating some sort of tax laws since gifting that HUGE amount of cash is a taxable event and the banks didn't want to report it or w/e. You realize moving 10K anywhere the government gets a receipt of the transaction? I would consult a CPA or a lawyer or w/e cuz I think it was fair for the banks to close your account rather than say "report" it to the government. Gifting huge amounts of money and giving away your car/house or selling your house/car is a taxable event that I'm lawful citizen should have to report to IRS.

[Slabenstein]

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@Anonymous wrote:

(2)  I help pay some of my parents/little brother's bills.  For example their car insurance sends me small checks (maybe $10-$15, 2x a year, not in my name) for safe driving, I deposited these into Regions.  But this has been going on 3 some years.

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That you were keeping a large amount of cash in a security deposit box, depositing it in small amounts over time, and immediately transferring those deposits out (if I'm understanding you correctly) could have raised an eyebrow that made them look at you more closely.  With regards to the checks you mention above, were your parents and brother signing them over to you before you deposited them?

[coldfusion]

Somebody not known to operate a legit brick and mortar store who is making irregular large cash deposits but of under $10K each and then immediately transferring the money out into another FI is going to arouse suspicion,  they likely suspect you're laundering/handling drug money.   If so it's no surprise they would cut you lose, thay aren't going to want to risk having examiners from multiple government agencies nosing around.

[barca]

@Anonymous  

don't take it personal. it is strictly business.

Western union was fined for anti money laundry. 

Paypal was fined for not follwing U.S sactions.

Once the bank (machine learning algorithm) figures there is suspicion on your account it will be flagged

It is not a big deal as long as everything you do is legit.

side story

I was playing beside a guy one day in a casino and the supervisor wanted the guy's social security number - he said IRS requires they get info on anyone playing with a lot of cash in the casino.

I realize if you win big money, they might want your SSN so you can pay tax, I never knew if you are spending big too, they also require your SSN 

[rostrow416]

stuartwilsworth90 wrote:

 My mom let me make a paypal account in her name. I sell routinely online - mostly old tech, I upgrade laptops/iphones every time, and some old clothes. The money from PayPal went into my regions. I'm not sure if they can see my Paypal is not in my name?

Yes.  The bank sees the name on the incoming deposit.  Just because they let it go a few times, doesn't mean that it's not a problem.  Getting a ton of transfers probably flagged your account.  Moving amounts of money in and out of your account after already being flagged is probably what triggered the closure.  

Next time get whoever on the account as a joint owner so that incoming transfers match up.  You don't want to get flagged like that.

[Anonymous]

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@Anonymous wrote:

The $35K I moved into regions were in small swings, each around $5k each. Maybe $20k total over the summer June-Aug. 2020, $5K in Oct, $5K in Feb and the last $5K a week before they terminated. Normally when I go there I have work attire on, but the last time I went I had the day off and had workout clothes on... For what it's worth I don't keep much money in the account, I transfer it into Ally because better interest. I guess if they see a guy in dirty workout clothes moving cash from a box into regions then into Ally it's suspicious?

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Yes, that would certainly set off some alarm bells for potential money laundering. The workout clothes may have caused a rep to add a final flag, but the amounts and way it was staggered would have been enough to arouse suspicion. A bank has to do paperwork for deposits above a certain threshold ($10k I believe) and report it to the government. They also have to report suspicious deposits, particularly ones that seem to be "structured" to avoid the normal reporting threshold. Having it quickly move out of the account to somewhere else just worsens how it looks.

Nothing to be done now. You'd just have to take it as a lesson to avoid the look of that with other banks. You especially want to avoid anything suspect with any bank you still have as they can report the potential issue to chexsystems and other systems. You don't want to wind up unbanked.

edit to add- in case you need to receive a large amount of legit money in the future, have the person give you a cashiers check.

[Kidcat]

Just a quick question OP...when your ex returned the $60k to you did she give you cash?  Because that's what it sounds like...I'm just not clear.  Then you had that is a box, and took out $5k each time and deposited into Regions, and then immediately transferred out to Ally?  Did you ever have any payroll of ACH type deposits into the Regions account?

I see several red flags, but especially depositing $5k cash at a time over a period of time.  Good luck with your next bank, as someone else mentioned hopefully they did not flag you on chexsystems 

[SouthJamaica]

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@Anonymous wrote:

 Today I received a certified letter from Regions saying my 10+ year old account was closed on Thursday and they sent check for the balance.  The 1-800 number couldn't tell me why my account was closed, they told me to go into a branch.  I called the branch who told refused to tell me why it was closed, just said they had a right to terminate it and they did.  Said a "back office" made the decision, I asked to speak with the back office and she said she can arrange a call back... I'm not expecting anyone to call back.

Googling the issue it seems like a bank closes an account if (1) There are routine problems with the account (negative balances, bounced checks, etc.), which doesn't apply to my account.  (2) If they think there is fraud/money laundering. 

With the second issue....

(1) I had PayPal ban my account 10+ years ago, they found out my account was opened two weeks before my 18th bday, seems like they are notorized for banning accounts.  My mom let me make a paypal account in her name.  I sell routinely online - mostly old tech, I upgrade laptops/iphones every time, and some old clothes.  The money from PayPal went into my regions.  I'm not sure if they can see my Paypal is not in my name?  But, I've been moving money from paypal to regions for 10+ years, and if anything a decrease in the number of transfers the past few years.

(2)  I help pay some of my parents/little brother's bills.  For example their car insurance sends me small checks (maybe $10-$15, 2x a year, not in my name) for safe driving, I deposited these into Regions.  But this has been going on 3 some years.

(3)  I was in a serious relationship and helped pay the mortage, but when we parted ways she returned my mortage payments, about $60K.  I planned on gifting the amount to my parents when they visited so they can pay off their house (had $50K left on it), but they refused.  They were actually planning on downgrading to another house.  All their kids have families/jobs elsewhere and weren't in the area enough and the yardwork was too much for dad.  So I opened a deposit box in Regions, my mom's on the box - name, ID, picture, fingerprint (not sure if it's a good thing or bad).  Of the $60k, I moved $35K into regions, and $25K into another bank - the other bank didn't terminate my account.

The $35K I moved into regions were in small swings, each around $5k each.  Maybe $20k total over the summer June-Aug. 2020, $5K in Oct, $5K in Feb and the last $5K a week before they terminated.  Normally when I go there I have work attire on, but the last time I went I had the day off and had workout clothes on...  For what it's worth I don't keep much money in the account, I transfer it into Ally because better interest.  I guess if they see a guy in dirty workout clothes moving cash from a box into regions then into Ally it's suspicious?

I wasn't worried about my PayPal account 10 years ago since they had a reason (I was under 18) and PayPal is kind of notorizious for limiting/suspending people, but I've never heard of a physical bank terminating accounts.  I asked if I can open a new account and they said no, so it seems like I am banned for life?  Live in a small town with limited banking so kind of need Regions, plus it's one of the few banks here with a some what decent local/regional presense. 

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I believe it's illegal for the bank not to send you an "adverse action" letter which factually details the reason for the closure. So if I were you, I would file a complaint with the CFPB.

https://www.consumerfinance.gov/complaint/

[FinStar]

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@SouthJamaica wrote:

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@Anonymous wrote:

 Today I received a certified letter from Regions saying my 10+ year old account was closed on Thursday and they sent check for the balance.  The 1-800 number couldn't tell me why my account was closed, they told me to go into a branch.  I called the branch who told refused to tell me why it was closed, just said they had a right to terminate it and they did.  Said a "back office" made the decision, I asked to speak with the back office and she said she can arrange a call back... I'm not expecting anyone to call back.

Googling the issue it seems like a bank closes an account if (1) There are routine problems with the account (negative balances, bounced checks, etc.), which doesn't apply to my account.  (2) If they think there is fraud/money laundering. 

With the second issue....

(1) I had PayPal ban my account 10+ years ago, they found out my account was opened two weeks before my 18th bday, seems like they are notorized for banning accounts.  My mom let me make a paypal account in her name.  I sell routinely online - mostly old tech, I upgrade laptops/iphones every time, and some old clothes.  The money from PayPal went into my regions.  I'm not sure if they can see my Paypal is not in my name?  But, I've been moving money from paypal to regions for 10+ years, and if anything a decrease in the number of transfers the past few years.

(2)  I help pay some of my parents/little brother's bills.  For example their car insurance sends me small checks (maybe $10-$15, 2x a year, not in my name) for safe driving, I deposited these into Regions.  But this has been going on 3 some years.

(3)  I was in a serious relationship and helped pay the mortage, but when we parted ways she returned my mortage payments, about $60K.  I planned on gifting the amount to my parents when they visited so they can pay off their house (had $50K left on it), but they refused.  They were actually planning on downgrading to another house.  All their kids have families/jobs elsewhere and weren't in the area enough and the yardwork was too much for dad.  So I opened a deposit box in Regions, my mom's on the box - name, ID, picture, fingerprint (not sure if it's a good thing or bad).  Of the $60k, I moved $35K into regions, and $25K into another bank - the other bank didn't terminate my account.

The $35K I moved into regions were in small swings, each around $5k each.  Maybe $20k total over the summer June-Aug. 2020, $5K in Oct, $5K in Feb and the last $5K a week before they terminated.  Normally when I go there I have work attire on, but the last time I went I had the day off and had workout clothes on...  For what it's worth I don't keep much money in the account, I transfer it into Ally because better interest.  I guess if they see a guy in dirty workout clothes moving cash from a box into regions then into Ally it's suspicious?

I wasn't worried about my PayPal account 10 years ago since they had a reason (I was under 18) and PayPal is kind of notorizious for limiting/suspending people, but I've never heard of a physical bank terminating accounts.  I asked if I can open a new account and they said no, so it seems like I am banned for life?  Live in a small town with limited banking so kind of need Regions, plus it's one of the few banks here with a some what decent local/regional presense. 

---

I believe it's illegal for the bank not to send you an "adverse action" letter which factually details the reason for the closure. So if I were you, I would file a complaint with the CFPB.

https://www.consumerfinance.gov/complaint/

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Actually, this is not accurate @SouthJamaica.  Banking regulations allow FIs to close accounts and/or exit relationships without any recourse and at their sole discretion if the FI provides a timely notification to a customer that the termination of such relationship has ended.  The FI is under no obligation to disclose the actual reasons if, during the course of their internal investigation, it was determined that such action was warranted.  For instance, regulations protect FIs from disclosing BSA or AML actions, reputational risk, etc.  The CFPB wouldn't be able to do much in such situation other than confirm relationship was terminated and accountholder was provided legal notice of exit or termination.