HELP: Local bank closed/terminated my account for... - Page 2 - myFICO® Forums

iced · ‎05-25-2021

@Anonymous wrote:

(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?

Were the $5K amounts done in a routine/automated style? Otherwise, as another poster put it, this starts to look suspicious.

Your clothes have nothing to do with it. I've moved $200k+ via bank teller in a torn running workout shirt and shorts, and I don't think either of my banks have even see me bother to show up in so much as a polo shirt before. What I didn't do was try to move money in small amounts (aka under the IRS-needs-to-know threshold), manually, at odd intervals, to other accounts I had. Smaller amounts that were moved was via ACH between banks, initiated by the remote bank, and for different amounts each time.

iv · ‎05-25-2021

@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.

This part right here.

Structuring.

I know this may sound ridiculous... but just be glad you got a check for all your money back, and aren't facing Federal charges.

Structuring, which is avoiding the mandatory reporting requirements from the Banking Secrecy Act for cash transactions over $10,000, by making multiple transactions under the limit (like $9,999, but also repeated $5,000 transactions)... is itself a Federal felony. Even if there is no other illegal activity, the mere act of structuring deposits can be a crime... and you could lose the cash and do jail time! Like I said, ridiculous. But it does happen.

Odds are that the bank ended up filing one or more SARs (Suspicious Activities Reports) on some of your deposits (probably the ones in summer 2020), and decided to close your account because they didn't want any additional legal liability (both the bank and individual employees can also be charged for failure to report).

Things that are just fine, and won't trigger this reaction:

Depositing a $200,000 check while wearing sweatpants and a tanktop
Walking into a branch while wearing sweatpants and a tanktop, and asking to wire $200,000 to another bank
Depositing small amounts of cash (far under $10,000) on a weekly basis
Depositing $10,000 cash at the teller, and knowing that the bank will fill out a reporting form for the deposit

Things that are NOT just fine, and can result in adverse action or Federal charges:

Depositing $9,999 in cash while wearing a three-piece suit
Depositing $5,000 in cash today, and then another $5,000 fairly soon afterwards, and then another... etc

It's the combination of CASH transactions, and trying to avoid (or the appearance of trying to avoid) the $10,000 reporting rules.

EQ8:850 TU8:850 EX8:850
EQ9:847 TU9:847 EX9:839
EQ5:797 TU4:807 EX2:813 - 2021-06-06

Anonymous · ‎05-25-2021

@iv wrote:

Odds are that the bank ended up filing one or more SARs (Suspicious Activities Reports) on some of your deposits (probably the ones in summer 2020), and decided to close your account because they didn't want any additional legal liability (both the bank and individual employees can also be charged for failure to report).

Right, that was my first thought, and banks are not allowed to tell you if a SAR has been filed. Now SARs are filed all the time so having some against you isn't THAT scary. Around 95% of them lead to no action. But make sure you CAN document that what you did you at least sort of ok!

From BPI:

What is the standard for filing a SAR?

The activity need only be suspicious, and the SAR does not reflect any finding by the bank that a crime has been committed. It’s a lead – akin to seeing someone suspicious in your neighborhood and calling the police to check it out.

SouthJamaica · ‎05-27-2021

@FinStar wrote:
@SouthJamaica wrote:
@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/

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.