Bank account closed because of 15-year-ago news article [updated]

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FlyingMoose
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Bank account closed because of 15-year-ago news article [updated]

Post by FlyingMoose »

A friend of mine had some negative press coverage about 15 years ago. He hasn't been involved in any activities and hasn't been in the news since then.

He has had a [removed] Bank account for about 10 years, and he was just notified that they're going to close his account in 30 days because of the news article from 15 years ago.

Can anyone recommend a bank that doesn't close accounts for political/publicity reasons?

Also he now lives overseas and the bank would need to accept a customer living abroad. I thought of Schwab but I'm not sure if they close accounts for social-credit types of reasons.

Update: My friend appealed through the manager of the branch. He just heard back that they won't close his account after all. Apparently the risk management team told senior management about the article, but management thought it was current rather than from 15 years ago. Once corrected they decided he can stay with the bank. I've removed the name of the bank from the original post.
Last edited by FlyingMoose on Fri Jan 27, 2023 9:01 pm, edited 2 times in total.
Raycpact
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Re: Bank account closed because of 15-year-ago news article

Post by Raycpact »

Maybe a grantor trust would avoid making connection,
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Cheez-It Guy
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Re: Bank account closed because of 15-year-ago news article

Post by Cheez-It Guy »

Seems like there's a lot more to this story. You can't outrun your past.
gtrplayer
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Re: Bank account closed because of 15-year-ago news article

Post by gtrplayer »

Maybe you don’t want to say, but I have to imagine what he did was egregious enough that either the bank still thinks he is a financial risk or that doing business with him poses a reputation risk.

I’m also curious how he knows it was solely because of one news article from 15 years ago? I’d be surprised they gave such a specific reason. My guess is there is more to it than that.

He can try to open an account at any bank that accepts non-US residents. There’s no way to guarantee he won’t run into the same issue.
mhalley
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Re: Bank account closed because of 15-year-ago news article

Post by mhalley »

This article gives some banks that accept ex pats
https://www.investopedia.com/articles/p ... f-schw.asp
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celia
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Re: Bank account closed because of 15-year-ago news article

Post by celia »

I’ll bet it wasn’t the article that was responsible for closing his account but that there was something in it that make him look like he wasn’t (and still isn’t) living in the US. Some/most(?) US financial institutions aren’t set up to handle those living abroad. It isn’t just about tax withholding, but they may have difficulty transferring an account when a customer dies. They don’t have access to confirming that beneficiaries are who they say they are and aren’t involved in money laundering.

Remember, they are required to “Know Your Customer” et al.
djheini
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Re: Bank account closed because of 15-year-ago news article

Post by djheini »

mhalley wrote: Tue Jan 24, 2023 12:57 am This article gives some banks that accept ex pats
https://www.investopedia.com/articles/p ... f-schw.asp
That article doesn't seem to be very correct. I informed Fidelity of my new address in the UK and promptly got a letter that starting in 60 days I won't be able to make any deposits or purchases in any of my accounts.
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typical.investor
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Re: Bank account closed because of 15-year-ago news article

Post by typical.investor »

djheini wrote: Tue Jan 24, 2023 2:56 am
mhalley wrote: Tue Jan 24, 2023 12:57 am This article gives some banks that accept ex pats
https://www.investopedia.com/articles/p ... f-schw.asp
That article doesn't seem to be very correct. I informed Fidelity of my new address in the UK and promptly got a letter that starting in 60 days I won't be able to make any deposits or purchases in any of my accounts.
Well it does say "For many of these banks, you will need to maintain a valid U.S. mailing address and phone number while living overseas."

It generally comes down to a number of things:

1) do you have a mailing address in the States and if not, how long did you have an address in the States as their customer
2) your country of residence and it's laws
3) how diligent their compliance is

For many places, #1 is the only criterion and forget the part after the comma (about being a well established customer).
Marylander1
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Re: Bank account closed because of 15-year-ago news article

Post by Marylander1 »

FlyingMoose wrote: Mon Jan 23, 2023 9:44 pm A friend of mine had some negative press coverage about 15 years ago. He hasn't been involved in any activities and hasn't been in the news since then.

He has had an [removed] Bank account for about 10 years, and he was just notified that they're going to close his account in 30 days because of the news article from 15 years ago.
This is all very vague, but it sounds likely the bank would say they closed his account because of those "activities" your friend did, not the negative press coverage. Those activities sound pretty dramatic to still be relevant after all this time, and I suspect may be highly illegal and/or damaging to others. Blaming the press sounds like a Scooby Do villain blaming "those pesky kids" at the end of the episode.
Last edited by Marylander1 on Sat Jan 28, 2023 12:52 pm, edited 1 time in total.
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galawdawg
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Re: Bank account closed because of 15-year-ago news article

Post by galawdawg »

I suspect there is much more to this situation than we, and perhaps even FlyingMoose, know.

Since this friend lives overseas, why doesn't he just open an account at a bank in his country of residence? Otherwise, he is likely resourceful enough that he should be able to research for himself which US banks will open accounts for expats (assuming he is a US citizen).
halfnine
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Re: Bank account closed because of 15-year-ago news article

Post by halfnine »

galawdawg wrote: Tue Jan 24, 2023 3:51 am ...I suspect there is much more to this situation than we, and perhaps even FlyingMoose, know...
As someone who has had an account closed without a nefarious past and with the bank not required to disclose the reason the account was closed, I have a different take. I am personally skeptical the bank told FlyingMoose's friend anything other than we are closing your account and their friend (for whatever reason) came up with their own storyline. The reality is the banks can do whatever they damn well please. Most people will continue to say big deal and claim the righteousness of the banks. That is, until it happens to them.
galawdawg wrote: Tue Jan 24, 2023 3:51 am Since this friend lives overseas, why doesn't he just open an account at a bank in his country of residence?
They may very well already have a local account. I certainly do. Doesn't mean they (like myself) still might need a bank back in the USA.
galawdawg wrote: Tue Jan 24, 2023 3:51 amOtherwise, he is likely resourceful enough that he should be able to research for himself which US banks will open accounts for expats (assuming he is a US citizen).
If only it was that simple. Accurate and up to date information isn't readily available. Their friend will certainly get more valuable insight from the expats on this board then they will with solely their own research.
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typical.investor
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Re: Bank account closed because of 15-year-ago news article

Post by typical.investor »

FlyingMoose wrote: Mon Jan 23, 2023 9:44 pm Can anyone recommend a bank that doesn't close accounts for political/publicity reasons?

Also he now lives overseas and the bank would need to accept a customer living abroad. I thought of Schwab but I'm not sure if they close accounts for social-credit types of reasons.
Schwab Bank does NOT accept customers living abroad. I was a Schwab International client for many years, but never had access to Schwab Bank. Moreover, you can't even buy brokered CDs from overseas as they are regulated to US residents. Even at Schwab I was told I couldn't open any new accounts as compliance enforcement on my country of residence had been changed.

Another US bank (Wells Fargo) accepted me being overseas and let my buy CDs easily. The difference is that I'd been a Wells Fargo customer for decades before moving overseas and I think checked their US person box.

Vanguard, they froze my account the moment they found out I was overseas while others report Vanguard knows they are and has no restrictions on them. Ok, they aren't a bank.

With Citibank to buy CDs, we had to submit a non-solicitation agreement showing Citi was not marketing to us but we were at their door begging to buy of our own free will and volition. This is so they didn't have regulations issues in our country of residence. That was through private banking ...

I wouldn't take these decisions personally. One morning you may wake up and find compliance policies for being overseas have changed and you are no longer welcome, and you may also hear someone else is allowed to continue without restriction.

If you live overseas, you have a bad name at banks by default because the regulations give them pause due to the complexity and potential consequences.
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asset_chaos
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Re: Bank account closed because of 15-year-ago news article

Post by asset_chaos »

I have lived outside US for a couple of decades now. Several years ago Vanguard closed their cash handling account which forced me to find a new bank in the US. I found opening an account with State Department Federal Credit Union to be easy and straightforward to do online from outside the US. I'm in Australia; residence in other selected countries may present more difficulties. But, I suggest your friend give SDFCU a try.

Forgot to say, search for an old post of mine where I asked for feedback about which banks/credit unions were friendly to Americans livings overseas; several more suggestions there to potentially investigate.
Regards, | | Guy
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typical.investor
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Re: Bank account closed because of 15-year-ago news article

Post by typical.investor »

asset_chaos wrote: Tue Jan 24, 2023 7:35 pm I have lived outside US for a couple of decades now. Several years ago Vanguard closed their cash handling account which forced me to find a new bank in the US. I found opening an account with State Department Federal Credit Union to be easy and straightforward to do online from outside the US. I'm in Australia; residence in other selected countries may present more difficulties. But, I suggest your friend give SDFCU a try.

Forgot to say, search for an old post of mine where I asked for feedback about which banks/credit unions were friendly to Americans livings overseas; several more suggestions there to potentially investigate.
asset_chaos was fine at Vanguard and SDFCU ... neither would deal with me (and who can rightly blame them as cheeky as I am)... it's a good very suggestion though!!!

Personally I joined the American Consumer Council to get eligibility. There are others too. Not sure which is cheapest or better. I paid and got rejected. Kinda seemed like a scam to me but people insist it works. Luckily I was ok at Wells Fargo but their CDs didn't pay anything.

https://www.americanconsumercouncil.org

https://www.americansabroad.org/sdfcu-account/
Doctor Rhythm
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Re: Bank account closed because of 15-year-ago news article

Post by Doctor Rhythm »

FlyingMoose wrote: Mon Jan 23, 2023 9:44 pm
Can anyone recommend a bank that doesn't close accounts for political/publicity reasons?
“Political reasons” sounds like a euphemism here. Banks don’t know or care whom or what you campaigned and voted for, so being rejected for politics suggests their “politics” are quite interesting indeed. As others point out though, unless you have direct evidence, I would not conclude the account was closed due to a bad reputation.

As to your question: I can’t imagine that any reputable US bank is going to disclose that they will happily offer services to despised figures and convicts. It’s one of those “need to know” situations, and I’m guessing most Bogleheads don’t need to know. Money is a great deodorant though, so if one brings enough of it to the table, the bank may decide you’re okay.
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FlyingMoose
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Re: Bank account closed because of 15-year-ago news article

Post by FlyingMoose »

To update this story...

My friend appealed through the manager of the branch. He just heard back that they won't close his account after all. Apparently the risk management team told senior management about the article, but management thought it was current rather than from 15 years ago. Once corrected they decided he can stay with the bank. I've removed the name of the bank from the original post.
MBB_Boy
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Re: Bank account closed because of 15-year-ago news article [updated]

Post by MBB_Boy »

Glad to hear they relented, but I would still be on the hunt for a new bank. They don't deserve his business after this stunt
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Watty
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Re: Bank account closed because of 15-year-ago news article [updated]

Post by Watty »

I know that it has been resolved but your friend should still check their credit reports and the Chex bank reporting system to see if there is something negative that is more recent that is being reported there.

I agree that you may not be hearing the full story from your friend.

Something that does not sound right about the "negative press coverage about 15 years ago" story is that often there are people who have the same name as people that were in the news so if your friends name is John Smith, the bank has no way of knowing that he is the same John Smith.

Even if he has an unusual name there are likely other people with the same name. My wife has a very unusual last maiden name that likely even had the spelling changed when her family emigrated. When you Google her name though there are several people other people with her first and last name and as far as we know they are not distant relatives of hers.
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