Bank of America, one of the largest financial institutions in the United States, has recently drawn attention due to its policy of closing inactive accounts. As of March 28, 2025, this move aligns with state escheatment laws designed to manage unclaimed property. The bank has confirmed that customers risk losing access to their funds if their accounts fail to meet specific activity requirements. This development has sparked discussions about banking regulations, customer responsibilities, and the future of personal finance management.
Current Situation
Bank of America’s decision stems from compliance with state laws that mandate the transfer of dormant account funds to state custody. Accounts deemed "abandoned"—typically those with no activity for three years or more—may face restrictions or closure. Once transferred, funds become unclaimed property, requiring owners to reclaim them through state processes. This policy isn’t unique to Bank of America; it reflects a broader industry practice to adhere to legal obligations while managing operational efficiency.
Expected Outcomes
Looking ahead, this trend could increase awareness about account maintenance among customers. However, it may also lead to confusion or financial loss for those unaware of the rules. States could see a rise in unclaimed property holdings, complicating recovery efforts. For Bank of America, stricter enforcement might streamline operations but risks alienating customers if not communicated effectively.
State-Specific Account Handling in the U.S.
Each U.S. state has its own escheatment laws, creating a patchwork of regulations. For example, California may require accounts to be inactive for three years before transfer, while New York might have different thresholds or notification rules. Bank of America adjusts its policies to comply with these variations, meaning the timeline and process for account closure differ by location.
Why Account Closures Happen
Closures occur to prevent fraud, reduce liability, and fulfill legal mandates. Inactive accounts are vulnerable to unauthorized access, and states use escheatment to protect unclaimed funds. For banks, closing dormant accounts also cuts administrative costs tied to maintenance and reporting.
Who Is at Risk?
Customers with forgotten accounts—such as savings or secondary checking accounts—are most vulnerable. This includes elderly individuals, those who’ve relocated without updating details, or people with minimal banking activity. Small business owners with unused accounts could also be affected.
Solutions to Avoid Closure
Preventing account closure is straightforward. Customers should log in regularly, make small transactions, or set up automatic deposits. Updating contact information ensures notifications reach them. If an account is no longer needed, closing it proactively avoids escheatment hassles.
Bank of America’s account closure policy reflects a balance between legal compliance and operational needs. While it poses risks for inactive account holders, proactive steps can safeguard funds. As banking evolves, staying informed remains key.
