Why the Senate Wants to Establish Clearer Guidelines for Closing Bank Accounts
A bill introduced on April 8, 2024, by Philippe Folliot—which aims to require banks to provide justification for closing a private individual’s account upon the individual’s request—was passed by the Senate on Wednesday, October 9.
This initiative addresses a recurring problem: arbitrary or unjustified bank account closures, which cause difficulties for account holders.
Why this bill?
Banks sometimes close accounts without a clear justification, which can have serious consequences for account holders. Philippe Folliot, the author of the bill, emphasizes that this situation is particularly detrimental in rural areas, where the choice of bank branches is limited. The bill therefore aims to require banks to justify the closure of a particular account when the account holder requests an explanation. The Senate has made several amendments to the bill to strengthen consumer protection.
Among the amendments adopted are the following:
• Automatic notification of the customer: The Senate made it mandatory for banks to automatically notify customers when they decide to close an account.
• Prohibition on unfounded account closures: Senators prohibited banks from closing accounts for unfounded reasons.
Senators also established guidelines regarding the conditions under which a bank must provide its customer with the reasons for closing the customer’s account. In particular, they:
• Specified the exceptions: The bank is not required to provide the reasons for closing the account when doing so would undermine national security or public order.
• Defined the procedures for disclosure: The justification must be provided in paper form or on any other durable medium within fifteen business days of the request.
These changes are intended to ensure greater transparency and protect consumers’ rights against arbitrary decisions by banks. The bill, as amended by the Senate, represents a significant step forward for bank account holders, particularly those living in rural areas, where banking options are often limited.
