Bank of America Can Close Accounts: Is Yours Affected?
Bank of America (BoA) has recently become a focal point of attention as it moves forward with closing accounts that are deemed inactive or abandoned. This policy has sparked concern among customers who may not be aware of how inactivity could lead to the closure of their accounts, and in some cases, the funds may be transferred to the state under escheatment laws. In this article, we will explore the reasons behind the bank’s actions, the types of accounts that may be affected, and how you can avoid any disruption to your banking services.
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What is Escheatment?
Escheatment is the process by which unclaimed or inactive property, such as bank accounts, is transferred to state custody after a certain period of inactivity. Every state has its own set of regulations and laws governing this process, and it typically applies to financial accounts that have not had any activity for an extended period — often between 3 and 5 years.
Banks are legally required to report dormant accounts to the state and relinquish any funds within them if they go unclaimed for the prescribed period. Once the state takes possession of the account, it may be very difficult for customers to reclaim the funds, and in many cases, a lengthy bureaucratic process is required.
In the case of Bank of America, the move to close inactive accounts and comply with escheatment laws has raised concerns about customer awareness and how it impacts the financial security of account holders.
Why Can Bank of America Close Accounts?
Banks like Bank of America have a responsibility to follow state laws, including those that govern abandoned property. When an account goes dormant for a prolonged period, the bank is legally obligated to hand over the funds to the state. This helps ensure that unclaimed money is secured and available for rightful claimants.
For customers who have not logged into their accounts or performed any transactions for several years, it may come as a surprise that their account is now inactive. As a result, their funds could be taken by the state if they fail to act quickly to restore activity to their account.
In addition to inactivity, accounts may also be closed due to a variety of other reasons, such as suspected fraudulent activity, non-compliance with terms and conditions, or violation of anti-money laundering regulations. However, inactivity is the primary reason why many accounts face potential closure or escheatment.
Types of Accounts Affected by Bank of America’s Closure Policy
Bank of America can close a variety of different account types, depending on whether they are inactive for an extended period. The following are the main types of accounts that can be affected:
1. Checking and Savings Accounts
These are the most common types of accounts that customers hold at Bank of America. If there is no activity (no deposits or withdrawals) for a period of 12 to 36 months, the bank may classify the account as abandoned and begin the escheatment process.
2. Individual Retirement Accounts (IRAs)
IRAs, which are used for retirement savings, can also be closed due to inactivity. While these accounts often remain untouched for long periods, account holders must ensure they are complying with contribution rules and other requirements to avoid being classified as inactive.
3. Certificates of Deposit (CDs)
CDs are time-bound accounts that often feature higher interest rates than standard savings accounts. If a CD matures and no action is taken by the account holder to renew or withdraw the funds, it could be considered inactive and subject to closure or escheatment.
4. Stocks and Securities Accounts
Bank of America offers brokerage accounts for those who want to invest in stocks and securities. If there is no activity, such as buying or selling stocks, for an extended period, these accounts could also be at risk of closure.
5. Safe Deposit Boxes
Bank of America provides safe deposit boxes for customers to store important documents or valuables. If a customer does not visit or pay the fees for the safe deposit box for a certain period, it may be closed, and the contents could be turned over to the state.
6. Uncashed Cashier’s Checks
In some cases, if a customer receives a cashier’s check but does not cash it for a prolonged period, the bank may consider it abandoned property. These checks could also be subject to escheatment if not cashed within the required timeframe.
How to Prevent Your Account from Being Closed
There are several steps you can take to prevent your Bank of America account from being closed or turned over to the state:
1. Ensure Regular Account Activity
The most straightforward way to prevent your account from being deemed inactive is to ensure that you regularly access it. Perform transactions such as deposits, withdrawals, or transfers at least once every 12 to 18 months. Even a small transaction can keep the account active.
2. Log into Your Online Banking
In addition to conducting financial transactions, logging into your online banking account periodically is also a way to show that your account is still in use. This action demonstrates to the bank that you are actively monitoring your finances.
3. Respond to Bank Communications
Bank of America typically notifies customers whose accounts are at risk of closure due to inactivity. If you receive a letter, email, or phone call from the bank, make sure to respond promptly to confirm your account’s status and avoid the closure process.
4. Update Personal Information
It is important to keep your contact information (email, phone number, address) up to date with Bank of America. This ensures that you receive any important notifications regarding your account. Failing to do so may result in you missing notifications that could prevent account closure.
5. Set Up Alerts
Bank of America offers a range of account alerts, including balance notifications and transaction alerts. By setting these alerts, you can be notified whenever there is activity on your account. This will help you stay on top of your account and avoid accidental inactivity.
What Happens if Your Account Is Closed?
If your Bank of America account is closed due to inactivity, the next step is typically escheatment. This means that the funds in your account will be transferred to the state for safekeeping. Once this happens, reclaiming the money may involve a complex process that requires proving your identity and ownership of the funds.
Steps to Reclaim Escheated Funds
If your account is escheated, you can reclaim the funds by contacting the state’s unclaimed property office. This process may differ from state to state, but generally, you will need to:
- Visit the State’s Unclaimed Property Website: Most states have a website where you can search for unclaimed property by entering your name and other relevant information.
- Complete the Claim Form: Once you locate your funds, you will need to fill out a claim form and submit it along with proof of your identity.
- Wait for Processing: The processing time for unclaimed property can vary depending on the state. You may need to wait several weeks or even months for the state to return the funds.
- Pay Any Fees: Some states charge fees for reclaiming unclaimed property. Make sure you understand any costs associated with the process before moving forward.
How Bank of America Notifies Customers About Account Closure
Bank of America typically sends notices to customers with inactive accounts well in advance of any action. These communications will provide information about the risk of account closure and the steps you can take to prevent it. Notifications may be sent through email, mail, or text, depending on your communication preferences.
It is essential to regularly check your mail and email to stay informed about your account status. If you do not respond to these notices or take action to reactivate your account, it may eventually be closed, and your funds may be escheated.
Conclusion
Bank of America’s policy of closing inactive accounts is a result of both legal requirements and the need to protect customers’ unclaimed assets. To avoid losing access to your account and funds, it is crucial to maintain regular account activity, update your personal information, and respond to any communication from the bank. By staying proactive, you can ensure that your account remains active and your money stays safe. If your account has been closed or escheated, there are steps you can take to reclaim your funds through your state’s unclaimed property office.
