Closing DDAs Based on Internal Decision

Posted By: Crazy in Compliance

Closing DDAs Based on Internal Decision - 09/21/17 04:03 PM

Quick question. Our Terms and Conditions agreement states that "we can close an account at any time upon reasonable notice to you and tender of the account balance". It does not say we will give a specific reason for closing an account. Do any of you give specific reasons for closing an account based on an internal decision after reviewing account activity? Thanking you in advance!
Posted By: rlcarey

Re: Closing DDAs Based on Internal Decision - 09/21/17 04:05 PM

Never - just say you are invoking your right in that paragraph in the account agreement.
Posted By: P*Q

Re: Closing DDAs Based on Internal Decision - 09/21/17 04:29 PM

Same here, we keep it generic, something like "the Bank no longer wishes to maintain a deposit account relationship with you".
Posted By: Crazy in Compliance

Re: Closing DDAs Based on Internal Decision - 09/21/17 08:32 PM

Thanks!
Posted By: Crazy in Compliance

Re: Closing DDAs Based on Internal Decision - 09/21/17 08:33 PM

Thanks!
Posted By: BuckDog

Re: Closing DDAs Based on Internal Decision - 10/10/17 05:41 PM

We have an account closing situation. A person opened an account for a church. There were problems with the account opening as proper documents were not provided and the branch manager at that time opened the account anyway with the person promising to bring the documents. Of course the person didn't. (Branch Manager is no longer with bank.) This person who opened the account set up a direct deposit of federal benefits to the account and is using the account more like a personal account so I want to close the account because of the suspicious nature of the transactions. The account is not classified as a personal account but has the federal benefits being deposited. Do we have to give 30 days notice? Or can we give 10 days notice and close it the day the day the federal benefits are posted and give a cashier's check for the balance or allow the person to withdraw them. Based on review, this situation is going south quickly and we don't want to get caught losing money because of preset POS debits and automatic charges posting.
Posted By: SeekingKnowledge

Re: Closing DDAs Based on Internal Decision - 10/10/17 06:41 PM

There's been a few threads on this topic over the years, I've found this one to be helpful.

You can google search the keywords and "site:bankersonline.com" to find some more.
Posted By: JacF

Re: Closing DDAs Based on Internal Decision - 10/11/17 03:01 AM

When you read the thread that SeekingKnowledge linked to, pay particular attention to the excerpt from the Green Book that Ken posted.

You have an account opened for an entity without evidence of authority of the person who is acting on behalf of the entity. That's sufficient cause to suspend use of the account pending the outcome of your fraud investigation. This includes cancelling the debit card and returning any ACH payments that are in the signer's name (I suspect that all of them are in the signer's name). During your investigation, you'll want to contact the leadership of the church to advise them of the existence of the account- they have a stake in this matter, too.

With respect to the federal benefits deposit, your only logical choice is to return the deposit to the Treasury, since you do not have an account in the beneficiary's name to credit the funds to.