Bank Customer Protection: Ending Account Closures Based on Reputation Risk
This law introduces new rules protecting citizens from arbitrary bank account closures requested by federal agencies. Agencies must now provide a material reason for ordering a closure, and this reason cannot be based solely on the bank's reputation risk. Crucially, in most cases, customers whose accounts are closed by government order gain the right to know the specific legal justification for that decision.
Key points
Federal agencies cannot order banks to close a customer's account based only on reputation risk; a material reason is required.
If an account is closed by government order, the bank must inform the customer of the specific legal justification (unless national security is involved).
Stricter requirements are imposed on the Attorney General for issuing subpoenas for documents in financial institution investigations.
Status:
Expired
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