A Surefire Way to Get Your Bank Account Closed

The Patriot Act, enacted in response to the September 11, 2001 terrorist attacks, introduced a host of new laws and regulations aimed at combating money laundering and terrorism. Among these measures is a requirement that all personal bank accounts must be registered with a residential physical address.

Over the years, I've lost count of how many clients have faced the frustrating experience of having their bank accounts locked or closed after transitioning to a nontraditional residence lifestyle. Even long-term account holders can find themselves suddenly locked out of their accounts, often without warning.

The Typical Scenario

It usually begins with confusion and stress as clients realize their online banking access has been locked. After enduring the initial hurdles of customer service—often involving multiple calls with representatives who may not fully grasp the issue—the situation typically escalates to a U.S.-based account representative. Eventually, the root cause is identified: the residential address on file is no longer valid according to the bank’s stringent requirements. In some cases, clients have been locked out to the point where they must visit a branch office in person to verify their identity, which is an impossible task for those living internationally.

Opening a New Account with a PMB as the Primary Residence Address

When opening a new consumer bank account, the process often includes an automated USPS database check of the provided “home” address to verify that it is a legitimate residential address. This requirement automatically excludes all PMB addresses. So, the issue isn't with PMBs per se, but with the broader requirement that the address be residential.

Attempting to disguise your PMB by changing "PMB 219" to "Apt. 219" will not help; an automated system will simply decline the application. If you're dealing with a human account specialist, they will inform you that the address does not qualify. The next step will be a request for a residential address. If you don’t have one, they might suggest using the address of a relative—any relative. However, using a residential address in a high-tax jurisdiction could unintentionally affect your tax status, so proceed with caution.

Changing an Existing Account from a Residential Address to a PMB

This scenario is the most problematic and common. After going remote and acquiring a PMB, you might instinctively log into your online banking and change both your home and mailing addresses to your new PMB. Depending on the bank, the address change might not trigger an immediate validation. It could take days, weeks, months, or even years before an audit or compliance check uncovers the non-conforming address.

Banks’ resolution processes vary widely. Regional banks and credit unions might contact you directly to resolve the issue. However, larger, more virtual banks often lock the account, leaving it to you to identify the problem and take steps to resolve it.

Conclusion

To avoid the hassle and potential financial disruption of having your bank account locked or closed, it’s essential to understand the implications of using a non-residential address for banking purposes. If you’re transitioning to a nontraditional lifestyle, consider all your options and consult with your bank to ensure that your financial accounts remain accessible and secure.