US banks are increasingly closing customers’ accounts and freezing withdrawals without warning, according to a new report.
A growing number of people say they’re abruptly losing access to both their checking and savings accounts, reports CBS Los Angeles.
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.
“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.”
Banks typically shut down accounts over concerns of suspicious behavior.
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.
Back in 2014, the number of SARs submitted by banks stood at about 830,000.
That number has significantly increased in recent years, with about 1.4 million SARs reported in 2021.
In addition, Republican attorneys general in 19 states recently accused JPMorgan of “persistently” discriminating against its own clients and closing bank accounts without warning based on religious and political biases.
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.”
When a CBS television crew showed up at the bank to film a report, Nehorai says the situation rapidly changed.
Although his account remained closed, he was granted permission to transfer his money out and send it somewhere else.
Bank of America told the news outlet that an FBI report triggered the shutdown of Nehorai’s account. Nehorai says he is the person who submitted that report to the FBI, to tell the agency that a scammer had impersonated him via email asking for money from one of his clients.
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