Questions

I received a letter from the bank closing my account due to the nature of my business. What should I do?

It is a car title loan company that I have ran for the last two years in Los Angeles. What have other companies done and what would you suggest that I do?

4answers

1) Change bank
2) Stop doing money laundering or giving them suspicions of doing so by avoiding excessive cash deposits/withdrawals or having periods of large movement and then no movement (these are triggers)
3) Have a good relation with your banker
4) If they ask you for nature of your business then answer truthfully
5) Ask them if its a mistake....these things happen


Answered 6 years ago

Banks in the US are becoming increasingly sensitive to the type of businesses they associate themselves with. If you're a genuine business, it really is not your fault.

Licensed institutions like cash advance businesses or even the highly regulated money transmitters have a hard time opening a bank account.

You literally have no claim. If a bank refuses to do business with you, they can and there is not much you can do.

Do try to find out the reason (the Risk department is the one that provides reasoning).

See if your business is classified under high-risk as far as the bank is concerned.

This is a HUGE problem now in the US, so try to open as many bank accounts as you can.


Answered 6 years ago

It is because of the risk of money laundering and the high risk that is associated with the industry. There are many banks in the LA area that will accommodate you, but be up front. Talk to the AML department directly. Your front line banker doesn't know much anymore. They're more of pretty faces with a personality. But the smaller banks (a few branches at most) will help - But be honest. The big banks won't help you until you're a big deal... Doing millions in volume monthly.


Answered 6 years ago

A bank does not have to explain why it is closing a customer's account, although in most cases banks follow good practice and give a reason. This gives the customer an opportunity to respond if the bank has misunderstood the facts of a situation or made a mistake. A bank must return all the money in a customer's account at the time it closes the account, less any interest or fees that apply.
Complaints about a bank closing an account usually involve a customer challenging the bank’s reasons for doing so. In the first situation, it can be costly for a bank to monitor an account that is in overdraft. Therefore, a bank may decide that it does not wish to continue to offer this facility to a customer. In the second situation, a bank has a duty as a good employer to protect its staff from abuse and violence.
A bank may also need to consider closing accounts if it is unable to meet regulatory requirements, such as anti-money laundering legislation or international tax compliance regulations. Such information may include the customer’s identity, place of residence, tax residence status and source of money credited to accounts. If the information is not received, the bank may cease doing business with a customer. Your account may be closed without notice if it has been used inappropriately or if your conduct towards a staff member is abusive.
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Answered 2 months ago

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