WASHINGTON – The Consumer Financial Protection Bureau affirmed last week that a bank is in violation of federal law if it unilaterally reopens a deposit account to process transactions after a consumer has already closed it.
Consumers have complained that even after completing all the required steps to close an account, their bank has “reopened” the closed account and assessed overdraft and nonsufficient funds fees. Financial institutions also have charged account maintenance fees upon reopening, even if the consumer was not required to pay account maintenance fees prior to account closure.
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“When a bank unilaterally chooses to open an account in someone’s name after they have already closed it, this is a fake account,” said CFPB Director Rohit Chopra. “The CFPB is acting on all fronts to halt the harvesting of illegal junk fees.”
Closing a bank account can take significant time and effort by a consumer to complete, and a bank may require a period of advance notice prior to closing the account to allow for the processing of any pending debits or deposits. Consumers often must also settle any negative balances in their deposit account before being able to close it. Upon closure of the deposit account, the consumer may no longer have access to their account information or receive notifications of account activity.
Sam Wood is a PBN staff writer. Contact him at Wood@PBN.com.
