Banks Are Using “Black Box” Rules To Terminate Accounts

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When banks start using gray legal laws to target their own customers without repercussion, it’s time to pay attention.

JPMorgan Chase and Citibank are abruptly and quietly shutting off customer accounts in what they call a “de-risk” event. This latest decision could potentially lead to further escalation by banks in other areas of finance unless it is addressed. The incentives for wrongdoing are too high and has turned one of the most powerful industries on earth into a potential black box.

Bank Accounts Are Vanishing

The New York Times first reported the new phenomenon after nearly 200 former Chase customers have sent complaints saying their accounts were shut off abruptly.

New policies have apparently been implemented by these banks to crack down on possible terrorist and criminal activity. However, normal people with business and families to support are also being hit hard.

JP Morgan Chace’s own spokesperson Jerry Dubrowski says the harsh account decisions are happening as part of a “de-risking” plan:

“We act in accordance with our compliance program, consistent with our regulatory obligations. We know that can be frustrating to clients, but we must follow those obligations…”

Even worse, there is no transparency. Banks are not required to tell the public how many of these “de-risk” accounts have been shut down. The public is left in the dark.

A Strange Pattern Is Emerging

This event is not new. In fact, it represents a scary new trend in the banking industry.

According to Reuters, banks are submitting Suspicious Activity Reports to the government at a very alarming rate. These reports tell the government of activity the banks deem to be “suspicious.”

The number of submissions jumped from 2.5 million in 2020, to 3.0 million in 2021, to 3.6 million in 2022.

However, there is no industry standard about what suspicious activity even means. Which means that banks might just be picking and choosing accounts to shutter.

There is no transparency at all. These banks do not have a good reputation for policing themselves.

In fact, we know that banks like JP Morgan Chase secretly work with dark figures in the criminal underworld like the infamous billionaire Jeffrey Epstein without shutting down his accounts. 

Even worse, these banks have been accused of purposely shutting down accounts of political opposition. Attorneys general in 19 states even sent a letter to the bank’s CEO saying that the bank violated its own rules by shutting down so many accounts in likely politically motivated decisions.

The growing risk is that these banks could be “de-risking” accounts for their own benefit. In fact, it’s not a stretch to assume that these banks are shutting down accounts of people as part of an agenda that has nothing to do with security.

Either way, there’s no possible way to know. They aren’t required to explain themselves. Which means one of the most powerful industries in the world is a black box with no accountability. This should be concerning to us all.