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What happens when a bank closes all my accounts?

Discussion in 'Credit Cards, Credit Rating Repair' started by trevor700, Jun 3, 2021.

  1. trevor700

    trevor700 Law Topic Starter New Member

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    Was living with a serious girlfriend for two years and paid half of her mortgage, she moved cross country and we split ways but remain friends. Asked her to pay me back the money I paid and she did, $35K in cash.

    Got a safety deposit box and put the money in there. Figured if it's in there I can't really spend it and bank interest is crap lately. Later decided it probably isn't safe keeping it in a safety deposit box and I think the government flags you if you deposit more than $10K, and I didn't want to pay taxes on a return mortgage payment? So I was depositing small amounts ~$5k randomly into my bank. Deposited $20K June-July. $5K in Oct, $5K in Jan, then $5K two weeks ago and a week later they close my Regions account.

    Googling the issue seems like they close accounts if (a) there is a problem with the account like bounced checks and negative balances or (b) they suspect money laundering. Although they refuse to tell me why, it's definitely not (a), so I figured it was (b).

    1-800 number tells me the local branch closed it. Local branch tells me a back office closed it. Neither tell me why. Local brand (rude as hell) tells me the back office will call you, they never do. Noticed they also closed my savings account and manager is trying to figure out a way to close my deposit box...seems like they don't want anything to do with me.

    Doesn't seem to be anything on my chexsystems, maybe it takes time to show up? Or does it not show up?

    Haven't done anything illegal, have copies of the mortgage payments, receipt from ex-girlfriend's bank showing it was cash withdrawal and we are in good terms and she'll say what happened.

    Kind of want the regions because it's one of the few regional banks here but it seems like I am on their blacklist now. Should contact corporate to try to get it back? Surprised they didn't ask me where the money came from or closed it over the summer when I moved $20k. Didn't keep but a few dollars in the account, moved the cash from Regions to an online bank account that gets decent interest.

    Should I be worried about anything?

    Or is it just a business and they don't have to prove anything, if they don't like something, they just terminate and I should move on and find another bank?
    knot12gossip likes this.
  2. Zigner

    Zigner Well-Known Member

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    Your admitted act of structuring your deposits in order to avoid the reporting requirement, in and of itself, was likely illegal. Keep working with the bank to find out your options.

    EDIT: For this amount of money, you may want/need to speak to an attorney. In fact, it might be best to do that first in order to avoid further incriminating yourself.
    hrforme and army judge like this.
  3. army judge

    army judge Super Moderator

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    I keep many valuable things in my two safe deposit boxes at two different banking institutions. I've done that for 40 years, no issues whatsoever.

    Unfortunately you assisted the authorities in your flagging, perhaps financial FLOGGING.

    Worrying never helps, however you might remain WATCHFUL.
    hrforme likes this.
  4. zddoodah

    zddoodah Well-Known Member

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    Why on Earth would you ask that and why would she do it?

    You put $35k in cash in a safe-deposit box (not "safety deposit")?

    Despite your use of a question mark, this sentence isn't a question. If you intended a question, I cannot discern what you intended to ask. You certainly wouldn't have been taxed on this money, and the only reason large cash deposits are flagged is so that the situation can be reviewed for potential criminal activity. Here's a summary of how this works.

    Who are "they"? What is a "regions account"? What reason did "they" provide for the closure?

    I can't conceive of any way the answer to this question could be anything other than yes.

    Well...yeah...you've got what, for most folks, is a shload of money to which you apparently don't have access, and this happened because you behaved in a foolish manner based on bad information you got from who-knows-where.

    Definitely should consult with a local attorney for a review of the situation and advice.
    justblue and Zigner like this.
  5. Tax Counsel

    Tax Counsel Well-Known Member

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    When you deposit cash of $10,000 or more in a single transaction or series of related transactions the bank must report that to the US Treasury. That does not automatically make the deposit either suspect or taxable income. If you can show the money came from a legal source and was not taxable income you don't have a problem.

    Banks must also report any transaction(s) that appear to be suspicious. Transactions that are a significant departure from your normal banking activity may end up getting reported as well.

    Banks cannot keep open accounts they suspect of being used for illegal activity.

    Banks can, per the account agreement they have with you, close your account at any time for any reason (other than reasons like illegal discrimination, of course).

    You should have just deposited the entire $35,000 at the time you got it. Sure, the bank would have reported it, but since that deposit was not part of any criminal transaction you'd not have had a problem. And while the IRS might have asked about it when you didn't report any income to match the deposit, so long as you could show how you got the money you would not have been hit with any tax from it.

    That's one reason for the reporting. The other is aiding the IRS in finding under reporting of income. While you might include under reporting as possibly criminal, the IRS uses that information for much more than pursuing criminal tax investigations. It also uses it as a tool in its audit and collection activities, much like using W-2s, 1099s, and other information returns it receives.

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