Banking Laws and consumer protection in Canada

[thelittleguy]

I am operating as a small business my business is considered an MSB or Money Service Business, which basically means that I cash cheques, exchange money and offer payday loans and was banking with a bank for over 18 months. I never conducted any fraud transactions, wrote any bad cheques or violated and of the banks policies. When one day out of the blue I get a letter from my bank informing me that they are closing the account with 30 days notice by invoking some clause in the banking agreement that allows them “without cause” to terminate my account. I am at a loss as I have not found it easy to obtain the account in the first place and have now been put in a bad financial position as I have a lease, employees and other bills but can no longer conduct business i.e. make money, accept debt or deposit negotiable items because this bank has left me high and dry! Upon receiving the notice from my current bank I proceeded to apply for an account at other banks. One refused to open such an account outright and another offered to open the account but with some very excessive monthly fees and a non-refundable $2000.00 fee just for them to conduct a investigation into my company so that they can obtain approval to do so. I must repeat! $2,000.00 non-refundable weather they grant me an account or not, to pay for them to investigate my company beyond a credit report, proof that my business is registered as an MSB with Fintrac which is a government agency for anti-money laundering! Like OMG! Can anyone help me understand why I am being treated like a criminal in my own country of birth where I have bent over backwards to please every whim and policy of these major institutions and yet I feel like they are just causing me this grief because they view anyone in this business as competition and a threat to their bottom line! My question is this: Is the bank I’m with currently legally allowed to just dump me for no reason? and secondly can other banks refuse me as a client even though I have met every legal and regulatory obligation as a business in the government’s eyes? I mean I feel like I’m the victim of profiteers and monopoly mongers! Again if I can’t get a bank account to do transactions I can’t conduct business, if I can’t conduct business I cant make a living or obtain a return on my already massive investment.


The little guy.What is the name of your state (only U.S. law)?

[HomeGuru]

I am operating as a small business my business is considered an MSB or Money Service Business, which basically means that I cash cheques, exchange money and offer payday loans and was banking with a bank for over 18 months. I never conducted any fraud transactions, wrote any bad cheques or violated and of the banks policies. When one day out of the blue I get a letter from my bank informing me that they are closing the account with 30 days notice by invoking some clause in the banking agreement that allows them “without cause” to terminate my account. I am at a loss as I have not found it easy to obtain the account in the first place and have now been put in a bad financial position as I have a lease, employees and other bills but can no longer conduct business i.e. make money, accept debt or deposit negotiable items because this bank has left me high and dry! Upon receiving the notice from my current bank I proceeded to apply for an account at other banks. One refused to open such an account outright and another offered to open the account but with some very excessive monthly fees and a non-refundable $2000.00 fee just for them to conduct a investigation into my company so that they can obtain approval to do so. I must repeat! $2,000.00 non-refundable weather they grant me an account or not, to pay for them to investigate my company beyond a credit report, proof that my business is registered as an MSB with Fintrac which is a government agency for anti-money laundering! Like OMG! Can anyone help me understand why I am being treated like a criminal in my own country of birth where I have bent over backwards to please every whim and policy of these major institutions and yet I feel like they are just causing me this grief because they view anyone in this business as competition and a threat to their bottom line! My question is this: Is the bank I’m with currently legally allowed to just dump me for no reason? and secondly can other banks refuse me as a client even though I have met every legal and regulatory obligation as a business in the government’s eyes? I mean I feel like I’m the victim of profiteers and monopoly mongers! Again if I can’t get a bank account to do transactions I can’t conduct business, if I can’t conduct business I cant make a living or obtain a return on my already massive investment.


The little guy.What is the name of your state (only U.S. law)?

**A: did you bother to even read the posting instructions? Or the last sentence in your post?

[Antigone*]

I am operating as a small business my business is considered an MSB or Money Service Business, which basically means that I cash cheques, exchange money and offer payday loans and was banking with a bank for over 18 months. I never conducted any fraud transactions, wrote any bad cheques or violated and of the banks policies. When one day out of the blue I get a letter from my bank informing me that they are closing the account with 30 days notice by invoking some clause in the banking agreement that allows them “without cause” to terminate my account. I am at a loss as I have not found it easy to obtain the account in the first place and have now been put in a bad financial position as I have a lease, employees and other bills but can no longer conduct business i.e. make money, accept debt or deposit negotiable items because this bank has left me high and dry! Upon receiving the notice from my current bank I proceeded to apply for an account at other banks. One refused to open such an account outright and another offered to open the account but with some very excessive monthly fees and a non-refundable $2000.00 fee just for them to conduct a investigation into my company so that they can obtain approval to do so. I must repeat! $2,000.00 non-refundable weather they grant me an account or not, to pay for them to investigate my company beyond a credit report, proof that my business is registered as an MSB with Fintrac which is a government agency for anti-money laundering! Like OMG! Can anyone help me understand why I am being treated like a criminal in my own country of birth where I have bent over backwards to please every whim and policy of these major institutions and yet I feel like they are just causing me this grief because they view anyone in this business as competition and a threat to their bottom line! My question is this: Is the bank I’m with currently legally allowed to just dump me for no reason? and secondly can other banks refuse me as a client even though I have met every legal and regulatory obligation as a business in the government’s eyes? I mean I feel like I’m the victim of profiteers and monopoly mongers! Again if I can’t get a bank account to do transactions I can’t conduct business, if I can’t conduct business I cant make a living or obtain a return on my already massive investment.


The little guy.What is the name of your state (only U.S. law)?

Ok Little Guy.. if you are in Canada, this will not apply, but let me enlighted those who might benefit from your question here in the United States.

An MSB is a money service business. An MSB is very risky to a bank. The risks include money laundering, & potential losses due to returned items just to name a couple. The bank I work for has very strict policies regarding MSBs. We may even require collateral held on deposit for those MSBs we've decided to continue to bank.

Had you been a US company, the bank at any time can enact its rights under your deposit agreement and terminate the relationship for any reason...not just because you are an MSB. I have requested closure of relationships based on the fact that clients refused to answer questions regarding their account activity.

Your account fees could typically be that high ($2000.00 a month is quite normal for a business generating a lot of activity and MSBs normally do). This is the cost of doing business. Your fees can always be offset by cash on deposit being held in the non-interest bearing analyzed account.

For those people interest in becoming an MSB...it is a very expensive venture to get into. As you can see you may be asked to have a couple of hundred thousand on deposit for collateral alone. At the end of the day, this type of business is also very profitable is run correctly and if risk-assessment and mitigation are handled appropriately.

take care, ana