Why Banks Are Suddenly Closing Down Customer Accounts

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The reasons vary, but the scene that plays out is almost always the same.

Bank customers get a letter in the mail saying their institution is closing all of their checking and savings accounts. Their debit and credit cards are shuttered, too. The explanation, if there is one, usually lacks any useful detail.

Or maybe the customers don’t see the letter, or never get one at all. Instead, they discover that their accounts no longer work while they’re at the grocery store, rental car counter or ATM. When they call their bank, frantic, representatives show concern at first. “Oh, no, so sorry,” they say. “We’ll do whatever we can to fix this.”

By law, banks must file a “suspicious activity report,” known as an SAR, when they see transactions or behavior that might violate the law, such as unexpectedly large cash transactions or wire transfers with banks in high-risk countries. According to Thomson Reuters, banks filed more than 1.8 million SARs in 2022, a 50% increase in just two years. This year the figure is on track to hit nearly 2 million.

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