Bank of America says 'no warning' about account closing, cites state laws amid concerns

Bank of America clarifies reasons for labelling accounts as abandoned and offers guidance to customers on maintaining active status.

Bank of America issued a clarification after it was widely reported that it is closing accounts. According to the multinational bank's website: “If you have not accessed your account for an extended period (typically 3 years or more), you may receive a letter from us letting you know your account is considered abandoned and may be turned over to the state under escheat laws.”

To prevent accounts from being labelled abandoned, Bank of America explained necessary actions customers should take. (Photo by Todd Kirkland / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)

As per New York-based WPIX, a spokesperson of the bank explained that the account closing is ‘not a new announcement’. “No warning, no changes at Bank of America. Every bank is required to follow state laws on what to do with abandoned accounts.”

Bank of America explains cancelling accounts

Bank of America is the second-largest bank in the country and serves around 69 million consumers and small businesses.

The bank website's FAQ section states: “You will need to follow the instructions in your letter to contact the bank and prevent escheatment.”

Escheatment is a process where the abandoned/assets that are not claimed by anyone are transferred to the state.

Bank of America mentioned, “Escheatment is the process of reporting and remitting abandoned/unclaimed property to the appropriate state agency for custodial safekeeping. We encourage you to log in and check your balances regularly to keep your accounts active," as reported by The Independent.

Hence, the account closing is a regulatory requirement in the US. Each state mandates that banks close long-dormant accounts and transfer funds to the state’s unclaimed property division until the rightful owner claims them. This is a routine banking practice across the US, and does not indicate any unusual or large-scale account closures.

Guidelines issued by the bank for account safekeeping

Bank of America has recommended several steps to help customers maintain the status of their accounts as active and avoid being labelled as abandoned property. One key suggestion is to regularly log in to online accounts and check account balances. The bank also suggests customers make regular transactions via their checking or savings account to keep them active.

Additionally, users also keep their addresses, phone numbers, etc up to date with the bank and cash checks or financial documents before they reach their expiration date, as reported by The US Sun.