CFPB Warns Banks Against Unilaterally Reopening Closed Accounts

Banks deciding on their own to reopen accounts that consumers had already closed are likely violating federal law, particularly if the bank collects fees on the account, the Consumer Financial Protection Bureau said.

Reopening a closed account without permission from the customer, even when a third party attempts to deposit or take money out of the account, would likely be a violation of the CFPB’s prohibition against unfair acts and practices, the agency said in a Wednesday circular.

Customers can face potential overdraft or annual fees that they didn’t consent to when accounts are reopened, the CFPB said.

“When ...