We sent notice of account closure to a customer. The notice didn't specify a reason, but the reason is the long-term high-risk transactional activity involving cash totaling quite a large sum. She called to demand a reason and was told that it was because of the cash activity. We didn't go into details with her. She said, "Oh, because of my boyfriend."

The boyfriend did indeed conduct most of the activity but she too conducted some of it. All their accounts are to be closed - including one that is just in her name. The boyfriend has conducted cash transactions against his account, her account, and their joint account. She herself has conducted some of the activity against the accounts.

Anyway, we just said "Because of account activity" and she immediately stated it was because of her boyfriend. She then bizarrely said "Well, that's discrimination."

Say what? I'm doing a double-take here.

I think she means that we are judging her account relationship based on the activity of the boyfriend, and that she believes that is the nature of what she has called "discrimination." I think she is incorrectly using the inflammatory word "discrimination" to mean "treating me in a way I don't like based on something somebody else did." That's not discrimination!

I don't think she knows what the word "discrimination" means. I don't say she has never experienced discrimination at any point in her life; I just mean she is using the term to describe something it does not in any way describe.

She then told us it "can't be discrimination because you are the same race as me." Regardless, she promptly ccmplained to the regulator that we discriminated against her based on her race. She actually said in the letter that she didn't want to allege discrimination, but then went on to describe her race and gender and how she never saw other people of her race in our branch. (Well, A) our census data says our area is 90% white, B) she never came inside the branch anyway, and C) her account manager at her branch is the same race as her, according to the customer.)

I talked this over with our regulator and they seem to totally get it, yet they counsel that this is a sticky area and to tread with extreme caution.

My concerns:
1. Would you even remotely consider keeping open the account?
2. What would you say in your written response to the regulator and customer? We can't go into much detail about the activity.

P.S. Her letter details her plans to apply for a loan at some later date, and she implies that our decision to close her deposit account will negatively affect her chances at getting a loan.

Have you ever filed a SAR? If the activity is that troubling, is there case to file a SAR?

1. No.

2. The tale you tell here is good starting point. Why can't you go into detail about the activity? You are discussing this with your regulator in response to a complaint. Why not address the large high risk cash transactions and the cross account activity?

Doug - that's the kind of thing we could not talk about, if such thing were to exist.

Dan - We want to say "activity" but not get into too much detail. We don't want to end up defending:

- WHY the activity is what we consider it to be
- Why we closed THIS account but not 12 other customers' accounts

Consider it a rhetorical question; I didn't mean for you to answer me, just as a point of consideration.

and thus the reason for the 'Need to remain Anonymous' forum.

do you have other account holders who are the same race as this woman or her boyfriend? Have you closed their accounts as well?

Rather than trying to prove a negative, that you didn't close her account for race issues, just respond to the positive each and every time "as previously communicated to you, we have chosen to sever our account relationship with you due to what we determine to be high risk transactions."

An account can be closed at any time at the bank's discretion. I think you are getting to concerned with this issue.

I suspect we've all had to deal with this, probably more than once. Let them vent, express regrets that the bank felt we were no longer the bank to provide them with the best service to suit their particular needs and call it a day.

Obviously she cannot call it a day if there is a complaint to the regulator. I would document everything, of course, and then keep the written response as simple as possible to the regulator as well as the customer. If you had legitimate reason to close it, stand by your decision to close.

just to throw another angle your way.

If you had the same situation with an account holder that was green, purple, or pink, would you/have you handled it the same way? IF so, to do otherwise based on this person's color, in my opinion, would be "reverse discrimination".

Unless there is something else going on at this bank, a complaint to a regulator because an account has been closed shouldn't be a cause for concern. Simply provide your response to the regulator's inquiry on a timely basis acknowledging that based on the account agreement the bank exercised its right to termination the relationship. If the complaint alleges discrimination, include a statement that the decision was based on the bank's standard practice of terminating account relationships when unusual activity is detected that cannot be satisfactorily explained by the account owner. (If these are accurate facts, obviously.)

I know you don't want to get into it, but that's actually a good question. If there were 13 customers all engaged in the same activity, why was only one closed down? In what way did her activity differ enough from the others to warrant that one extra step?

It doesn't matter - this is a deposit account and there are no fair deposit laws. You didn't like the way they were managing the account and under your deposit contract, in which you reserve the right to close the account for any reason, you closed the account. You need go no farther than that and I would offer no further explanation to the regulator or the customer. If the regulator wants to know additional details, they will call you. Refer them to the SAR that you most likely filed and that will be the end of the story.

File a SAR. Close the account. Move on. Don't worry too much or borrow trouble about what MIGHT happen or what the regulators might question. If they question you, you answer. If not, you don't.

Good points all. I may have overreacted; I just feel it injust and wrong for someone to scream discrimination when what they really mean is "I don't like the consequences of my actions."

Rlcarey: I keep hearing that there are no fair deposit laws. I agree other than that regulators seem to think there are "fair overdraft laws" in deposit accounts, and are warning us that fair lending/ecoa come into play when you pay vs. return an item, or pay vs. waive an NSF fee. Next exam should be fun.

I think the biggest concern is how UDAP is overlapping into everything now.

As someone previously posted, you have the right to close the account at any time. I wouldn't have even given her a reason of activity. If you had closed the account for money laundering, you wouldn't have even given out that information correct? The regulator doesn't seem to be that concerned with it, so I would keep all the documentation in order, treat her loan application like everyone else's, and let that be that. Getting into a battle trying to prove a negative will not help your situation, and in fact, might be more work than it is worth. Your bank is a business, and it was a business decision to close the accounts. Only your business and perhaps the regulators should be involved.

I have told CSR's in the past that having an account is a priviledge, not a right. We don't have to have an account or a reason to close one for anyone.

I've actually told a customer (maybe a mistake) that a bank can close their account simply because they are bored. There is nothing that says you have to justify an account closure.

In my "Letter of Intent to Close", I simply state, "This is to inform you of the decision made by MYBANK to close your account relationship...."

If they call and ask why, I may or may not go into detail as to what I am protecting us against. They can cry "discrimination" or "fire" or "rape" all they want. Let them hire an attorney who thinks that there if proof of such a crime.

So here we are two months later and the customer is writing us the below letter. Is the customer deranged? Note that the customer also started telling our manager's employers that this manager allegedly would be quitting - a purely fictitious, malicious rumor. In response, the manager inquiried internally about the possibility of banning the customer from the premises. The customer complained to the regulator a month ago and we already handled that response. Now the customer sends us this:

Dear [Branch Manager]:
I am a [gender] and [race] customer. You closed my accounts and messed up my life. What is the reason for closing my accounts? Put it in writing. I seek the truth, put it in writing. I want to know, with evidence and proof. Don't just give me copies of bank regulations. I want to know why in writing so I can press charges. I want a copy of my banking history for past two years and will file charges if not produced within seven days. This letter will be sent to several people [here, the customer names a dozen people who we've never heard of].

P.S. I googled the names the complainant refers to, from the list of people with whom the complaint was supposedly shared, and it is a bizarre list of people who are probably strangers to the customer. The list of allegedly CC'd folks includes the CEO of an oil company on the other side of the country, a senator from a state four states away, and various CEOs and presidents of totally unrelated companies in different regions of the country. Pretty much everybody but comedian Bill Cosby. So do you figure that the ex-customer a) knows these random non-customer people and imagines they care and will help, b) made up this list of the top of the head, c) the names are personal friends or social network contacts but are actually different people locally who happen to share the same names as a bunch of random CEOs, or d) the customer believes these CEOs and senators are communicating with the customer by radio wave thought transmission and/or unicorn message delivery? In short, should our branch manager fear for personal safety now?

Send her an invoice for the records she wants produced and tell her you would be glad to provide the records once the bank receives either cash or cashier's check for the fees as outlined in the Bank's fee schedule. I would not but anything else "in writing".

If the branch manager is worried about personal safety, then I would file an restraining injunction order against this person to prohibit her from the premises and requiring here to only communicating with the Bank's attorney.

If this customer were not female I would suspect it was the same one I had to go to court to get a restraining order against. Filed (anonymous) complaints with all kinds of odd people: a local minister, the NCUA (we are a bank), the Social Security Administration (he was not a recipient), etc. When this person began to show up at places he knew I frequented, such as my church, I had to go to court. Please don't mistake this kind of activity as just something meant to annoy or scare you. You need to make sure your employees are safe.