PRECAUTIONS &
WHAT TO DO IF YOU ARE NOTIFIED
Once you are notified of cancellation, the chance you can reverse the banks decision is not good. In addition to quickly looking for another banker, here are a few tips and precautions against being selected you might take that others have reported:
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If you are notified and the bank is AmSouth, do not expect to change their position. That will not happen! The best you can hope for is a little more time. They normally give a 30 day notice. In some cases, they order the operator to immediately stop writing checks, which closes the account immediately for all practical purposes. In a few cases, they have worked with the operator for a bit more time.
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If you receive any type of questionnaire from your bank about your business, be absolutely sure you complete it thoroughly, accurately and on time! We strongly suggest meeting with the banker (branch manager or higher) to review it in person in place of simply placing it in the mail. If you don't mind being cancelled by the bank, just forget this step.
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At your meeting with the branch manager or compliance director:
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Provide an explanation of what your business does and how long you have operated. Make sure you emphasize the close relationship you have with your customers (see below).
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If you do not cash checks, make sure you do not refer to yourself as a check casher. This seems to be the root of the problem. Click here to see what one bank has to say about the subject. This is typical of most banks. The issue is to assure your banker that you are not a Money Service Business (MSB) and that you have a close relationship with your customers. If you are an MSB (cash checks) make sure you understand the Patriot Act and can explain to your banker how you comply with the Act. Also, the other tips on this page may help.
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Explain you are licensed and regulated by the State Banking Department (if that is the case) and they undertake a background check and conduct regular audits of your business.
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If you are bonded, make sure you communicate this.
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Advise them that you know your customers very well since a high percent have been your customers for some time. Point out that regulators require you to keep meticulous records (again, if this is the case).
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The better you know your banker and the better they know you and your business, the less the likelihood of being cancelled
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Even if you do not receive a cancellation notice it might be a good idea to have a meeting in the name of prevention..
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When looking for another bank, your best luck may be a local or community bank in your area. Some regional banks may take your business but do not waste your time with Wachovia or Colonial Bank. Regions Bank (now Union Planters) has taken some accounts, but they have also cancelled a few.