The Way Big Banks Shut Down Customer Accounts Is Callous. Let’s Fix It.

For most of the last year, my inbox has been overflowing with tales from people like these:

• The accounting professor whose bank closed his accounts — and whose audit of his own transactions found nothing remotely suspicious.

• The tech executive whose entire family lost banking privileges because an estranged family member — with a single account linked to one parent’s account — committed a crime.

• The former European central banker who served as a senior fellow at Harvard and abruptly lost his banking privileges with no explanation.

Every person — more than 1,000 wrote to me and my colleague Tara Siegel Bernard — volunteered a story of losing banking and credit-card accounts and included contact information. It’s not the sort of thing most people normally do if they have something to hide.

Banks say they need to close accounts they deem suspicious to prevent money laundering, fraud and terrorist financing. In addition, regulators are pressuring them to sniff harder for signs of dirty dealings.

But there are many frustrating things about this phenomenon: The account closings often come without warning. There is usually no recourse, appeal or explanation from the bank. Sometimes you find out you have lost banking privileges when you’re buying food at the grocery store and your debit and credit cards no longer work.

But losing your bank account isn’t just inconvenient. It’s scary. If you’re a small business, it disrupts your payroll and can damage your reputation in the community. Given no explanation, you wonder if you’ve been blacklisted or put on some kind of government watch list.

A big part of the mystery with these shuttered accounts is why banks often treat people with such casual callousness as they examine their behavior and then show them the door.

It doesn’t have to work this way. In the last few days, I asked Bank of America, Citibank, JPMorgan Chase and Wells Fargo about specific things they might do to make the eviction process different, without breaking any bank security laws.