Skip to content

Closing Account Receiving Government Deposits

Answered by: 

Is there a federal code that requires notifing a customer thirty days before closing an account that is receiving government payments?

Yes, assuming that you are dealing with benefit payments credited to the account by direct deposit. You can find the rule in either of two places.

1. 31 CFR Part 210 (Federal Government Participation in the Automated Clearing House), section 210.4(c)(3):

(c) Termination and revocation of authorizations. An authorization shall remain valid until it is terminated or revoked by:

(3) The closing of the recipient's account at the RDFI by the recipient or by the RDFI. With respect to a recipient of benefit payments, if an RDFI closes an account to which benefit payments currently are being sent, it shall provide 30 calendar days written notice to the recipient prior to closing the account, except in cases of fraud; ...., or

2. The Treasury Department's Green Book, in the Enrollment section, page 1-57 (which interprets 31 CFR Part 210).

There is no requirement if the direct deposit items from the Treasury are not benefit payments (for example, tax refunds) or if benefit payments by check are deposited to the account by the customer. The crux of the matter is giving the customer time to make other arrangements for direct deposited benefits.

First published on 9/06/10

First published on 09/06/2010

Filed under: 
Filed under technology as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics