Banks are now closing thousands of customer accounts daily with reports only growing in the last year.
“The figures, obtained through a freedom of information (FoI) request made to City watchdog the Financial Conduct Authority and first reported in the Mail on Sunday, revealed that in 2016-17, just over 45,000 accounts were shut by banks.
The total has increased every year since, climbing to just over 343,000 accounts in 2021-22 – representing well over 1,000 for every business day of the week,” says The Guardian.
When people or organizations have their bank accounts closed, they often receive little or no explanation as to why this has happened, though the banks sometimes say it is due to concerns over financial crime such as money laundering and fraud, says The Guardian’s Betsy Reed.
Commenting on the data, the FCA said increased monitoring by banks might explain some of the increase in account closures. There are about 75m accounts in the UK.
It said: “We know that the total number of customers that banks have ceased doing business with for financial crime reasons is less than 0.2%. Tackling financial crime remains a priority of the FCA.
“We have seen firms increase their monitoring of accounts over the past couple of years, which may account for the increase in the figures.”
The government has announced plans to change the rules around bank account closures – including a requirement for banks to give longer notice of an impending shutdown.
“In some cases banks are legally prevented from telling customers why an account has been closed,” said Tina McKenzie, policy chair of the Federation of Small Businesses.
“But where possible, they should be told, so that if there has been a misinterpretation or misunderstanding, it can be swiftly resolved.”
And in the U.S., banks such as JPMorgan, Bank of America, and others are drawing scrutiny from the public eye.
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Banks in The U.S. Also Draw Scrutiny
US banks are drawing scrutiny for freezing accounts and withdrawals, and in some cases closing customer accounts too.
CBS Los Angeles reports that a growing number of people say they are abruptly losing access to their entire bank accounts.
The report cites the sudden account closure of Elad Nehorai, who received an ominous alert while logging into his Bank of America account.
He then drove to a branch in West LA, where he was told his account had been shut down and access to his life savings was denied, says DH.
“Bank of America told me it was shut down. They refused to give me an explanation. They told me I would get my money after it was resolved.
All of a sudden I find out I’m broke. I can’t feed my family and I can’t pay any expenses,” reported Elad.
Banks typically shut down accounts over concerns of suspicious behavior, says DH.
But according to the Banking Policy Institute, only 4% of Suspicious Activity Reports (SARs) submitted by banks to law enforcement result in a follow-up, and a small fraction of the follow-ups result in arrests and convictions.
Nehorai says Bank of America, which has $1.4 trillion in assets under management, said it would take up to 20 days to review his account.
“It’s another one of those situations where you just – how do you deal with this massive bank, this massive power that you have no control over? I was shocked to find out that this is actually relatively common.”
In July, thousands of customers who had their Coinbase accounts linked to Bank of America reported their accounts also being frozen or closed.
JPMorgan Closes Religious Group’s Account
In May, Republican attorneys general from 19 states said JPMorgan is “persistently” discriminating against its own clients and closing bank accounts without warning.
The law enforcement officials, led by Kentucky Attorney General Daniel Cameron, sent a letter to JPMorgan CEO Jamie Dimon stating that the banking giant’s practices go against the company’s own policies on equality, per Business Insider.
The letter, which has now been published by the Wall Street Journal, states that JPMorgan has repeatedly discriminated against customers based on their religious or political beliefs.
“It is clear that JPMorgan Chase & Co. (Chase) has persistently discriminated against certain customers due to their religious or political affiliation.
This discrimination is unacceptable.
Chase must stop such behavior and align its business practices with the anti-discrimination policies that Chase proclaims.”
The attorneys general cite the sudden account closure of a religious liberty organization as an example of the bank’s discriminatory practices.
In May 2022, Chase abruptly closed the National Committee for Religious Freedom’s (NCRF) checking account.
NCRF is a ‘nonpartisan, faith-based nonprofit organization dedicated to defending the right of everyone in America to live one’s faith freely.’
When NCRF inquired about the reason Chase closed the account, multiple bank employees stated that the decision came from the ‘corporate office.’ Specifically, NCRF’s executive director “was informed that a note in the file read that Chase employees were not permitted to provide any further clarifying information to the customer.’’
A JPMorgan representative told The Journal: “We have never and would never exit a client relationship due to their political or religious affiliation.”
JPMorgan is Abruptly Closing Business Accounts in New Scandal
JPMorgan Chase (NYSE:JPM) is abruptly closing business accounts as well as executives’ personal banking accounts in its latest scandal.
This is not the banks first scandal closing or freezing accounts without warning or explanation, but more on that later.
JPMorgan Chase canceled vaccine skeptic Dr. Joseph Mercola’s business account and the personal accounts of Mercola Market’s CEO, his wife and the company’s CFO, according to documents obtained by the Daily Caller News Foundation.
“Mercola Market is a Florida-based health business, and Chase abruptly closed its accounts for unspecified reasons, according to the documents. Chase sent the letters on July 13, notifying the company it had until September 10 to shut down account operations and informing CEO Steven A. Rye and his wife, as well as CFO Amy Legaspi, that they have until August 11 to close their personal accounts and open new ones at another bank,” says Daily Caller.
“After careful consideration, we decided to close your accounts because of unexpected activity on this or another Chase account,” the letters stated.
“I was told for legal reasons they cannot tell me why they are closing the accounts,” a Chase representative told Rye in a voicemail.
The representative told Rye to send him the letters he received to begin the process of restoring the accounts but repeatedly stressed there was no guarantee that the effort would be fruitful. “We are going to try because you’re a good client of our institution,” he said.
“I believe they cancelled all of the accounts because of Dr. Mercola’s (our employer) opinions,” Rye told the DCNF. “He … co-authored the best selling book The Truth About COVID-19 which exposed the likelihood that this virus was engineered in a laboratory funded by the NIH. He correctly predicted the vaccines would not prevent transmission or infection of COVID-19. Also, he has been directly censored by the Biden administration and is being targeted by politically weaponized agencies.”
“For privacy reasons, we can’t discuss customer relationships, but we don’t close accounts because of political affiliations, and we didn’t do so in this case,” Chase told the DCNF on Wednesday.
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