The CFPB has issued a circular that addresses the reopening of closed deposit accounts (Circular 2023-02). Specifically, the circular warns that it can constitute an unfair act or practice for a financial institution to unilaterally reopen closed accounts to process debits or deposits.
By way of background, the CFPB describes a scenario in which, after a consumer has completed all of the steps required by the financial institution to close a deposit account and the financial institution has closed the account, the financial institution unilaterally reopens the account after receiving a debit or deposit to the account. … Continue Reading