Legal Question in Business Law in California

Are banks allowed to suddenly close a business account because they choose not to service a certain business type?

I have been a Mortgage Broker for 25 years and I own my own brokerage as a Sole Proprietor. Today I received a letter from this bank that reads,"Upon review of your account we have determined you're operating in a business type we have chosen not to service here at______. As a result, we've made the decision to close your account." Are banks able to discriminate against certain business types? I have business accounts at a few other banks and have not had this issue. I am certain that there are other Mortgage Brokers who have business accounts at this large bank. What are my rights?Here...

Asked on 7/25/18, 8:00 pm

1 Answer from Attorneys

Mark Saltzman, MBA, JD Law Offices of Mark E. Saltzman

Yes and none. Of course, the bank cannot discriminate, based on race, gender, or similar types of characteristics, but the bank is free to determine that it is not going to have accounts for businesses, in a particular industry. There’s lots of banks out there.

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Answered on 7/27/18, 3:52 pm

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