Bank Account Freeze
25-Jun-2008 4:49 AM -- stargazer07
Is it legal for a bank to "freeze" all activity on associated accounts for not filling out the "Patriot Act" forms, with no offical notification of the freeze? When the account was first opened, 2 years ago, they are now asking for the paperwork (has been 4 weeks since their request was first received)
26-Jun-2008 8:37 PM -- JohnnyRocket
The USA PATRIOT ACT ("Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism") is a federal law and would thus preempt any Massachusetts laws dealing with notice and freezing of accounts.
You bank may be attempting to comply with Section 5318 of title 31, United States Code, (as amended by Section 326 of the act) which provides minimum standards for verification of identification of account holders.
While this would normally be done when a new account is opened, Section 326 (a)(1)(B) provides that verification may also be done for the purpose of "maintaining records of the information used to verify a person's identity, including name, address, and other identifying information".
The regulation requires customers to comply with "reasonable procedures ... after being given adequate notice".
Attorney John F. Libertine
www.johnlibertine.com