Chime has been suddenly closing accounts, not returning customers’ money
propublica.org
propublica.org
Of course they have. It's no accident that accounts like these are heavily marketed to people with terms like "faster access to YOUR money" and "virtually no fees" and "manage YOUR MONEY from anywhere, down to the penny!" These companies are targeting people for whom every single dollar is of vital importance.
To then yank the accounts right as a large deposit from a government agency lands is malfeasance, or at least immoral.
The vast majority of us who post on this site have plenty of money, or at least credit, in reserve so that even losing $10,000 worth of deposit isn't crippling. It's bad, for sure, but it's not "I'm homeless starting tomorrow" bad. We are not the target market for apps-that-should-be-proper-banks like Chime.
> She was directed to a passage in the company’s account agreement that states, “Chime and/or Bank may suspend, freeze, or close your Account for any reason with or without notice”
Yup, sounds about right. And of course there's a binding arbitration agreement, requiring all arbitration actions to be on an individual basis.
So customers can be turned away with no reason, no recourse, no private right of action against the offending company, and no ability to group together to push back on a larger foe.
This is, no pardon requested, fucking bullshit. I loathe that we've gotten so deep into contracts of adhesion and abstractions between supplying company and supplier and third-party relationships and "oh it's someone else's problem" and automated customer handling.
Yes, beating up the low level, minimum wage employee who has zero power over your circumstances is definitely the right way to resolve disputes with a corporation.
edit: /s
Maybe? That might nudge execs into providing better customer service experience, but if I were an exec I sure as hell am not going to let my well-being depend on good customer experience alone. Eventually you're going to get a crazed lunatic that good customer service can't defuse, and for that reason I'm going to still require physical barriers and/or armed bodyguards.
Viva la Revolution - IE Off with the aristocrat's heads, is far less likely these days for lots of reasons.
Though neither the parent author, nor I, are advocating for that response, I'm using it as an extreme to tug your frame of focus along the correct discussion axis.
The least of which is that the super wealthy have both private and public security forces on speed dial. Even minor protest groups or 'gentleman's disputes' like a more basic bare assault of vigilante protest are also off the table. There is no available check against uncouth behavior which violates the social and moral expectations.
Imagine trying that with google or Facebook or chime.
I don’t agree with the need for physical violence. Historically, we have had decent regulatory protections for customers. I feel like those protections are rapidly being eroded. The threat of reporting to the bank/insurance/etc regulator was real and triggered a response even in the most dense bureaucracies in my experience.
Best story ever along these lines is when an angry homeowner who was wrongfully foreclosed upon ended up suing the bank, winning, then foreclosing on her local branch when they neglected to pay: https://abcnews.go.com/Business/bank-america-florida-foreclo...
So, go buy your appliances from a local store, not Amazon or Lowe's or Home Depot. Do you, or do you not do that? Because you can totally do that.
Also I think we have lost something when decisions are made far away from the consequences. If there is a decision made in SF that affects a population in Wichita, where the company has no ties or physical presence, it’s hard to empathize on either end. A lot of commerce depended on trust between parties that could see face to face. That’s sorely missing these days.
“When you vote, you are exercising political authority, you're using force. And force, my friends, is violence. The supreme authority from which all other authorities are derived.”
Regulatory protections certainly didn't arise from the void. If you trace them back the New Deal agencies, then you have to consider the widespread violence that forced their creation.
Wow, that's the most poorly-thought out idea I've read in recent memory.
A few more seconds of consideration should be enough to come up with all the reasons this is such a terrible idea.
But one that I can contribute from a slightly unusual perspective (working adjacent to financial fraud detection):
The aggrieved customer is very often completely wrong about whom to blame for a problem. They are working with incomplete information (we all are), they're in a heightened state of stress (money is at risk), they're grappling with bad models of confusing systems (finance is complicated), and at least half of them are less smart than average (by definition).
I would say that about 10% of customer service requests start out hostile and accusatory. Some are literally threatening violence. And about 99% of the time, the aggressive customer is wrong.
So how many innocent noses do you think should be improperly punched, for your social regulatory mechanism instincts to be satisfied?
Most obvious consequence: the physically-strong can get more justice than the weak.
Which leads inevitably to: the physically-strong make the rules. And social regulation has failed.
I don't think it worked poorly. While we didn't have a constant epidemic of customers fighting with customer service people, the possibility of it served as an effective deterrent for overly scummy behavior (from both sides actually) and the system self-regulated.
You can compare this to the amount of verbal abuse and harassment being published on the internet. Before the internet and social media people weren't constantly punching each other in the face, because the possibility of it successfully deterred abusive behavior that would prompt such reactions. With that possibility gone, abuse increased significantly given the lack of consequences.
It's kind of like mutually-assured destruction. Nobody uses it, but the possibility of it being used keeps everyone in check.
Do you think the implied-but-never-actualized threat of physical violence is the thing that makes in-person customer service succeed?
I think it's exactly the opposite.
In-person service is typically better because communication is higher-fidelity, and people are much more empathetic when their counterpart is physically present.
When communication and empathy fail, the threat of physical violence is still not a motivator because (in my little corner of the world), there is basically no threat. The shopkeeper isn't going to jump over the counter and throttle the customer, nor vice versa. Because society built laws and norms that prevent that from being a viable solution, and guarantee that choosing that path will lead to much more serious problems.
It's entirely rational, and we don't need a vague passive-aggressive quasi-threat of a punch in the nose to make it work. No system works all the time, and there are always Poor Impulse Control people who leave the store and come back with a shotgun. But I'd argue that those extremely rare cases are further proof that the in-person "threat of physical violence" does not play a part in making customer service work well.
It's not the thing, but I think it's one of the things, among others such as the ones you listed.
> there is basically no threat
Recent events such as shopkeepers or security guards being assaulted for requiring people to wear masks suggests otherwise. The threat is still very small, but I'd argue it exists and humans aren't always reasonable when it comes to evaluating risk probabilities and will probably overestimate the actual risk and adjust their behavior.
> society built laws and norms that prevent that from being a viable solution
People don't always act reasonably and the perpetrator being punished down the line doesn't change the fact you got your face smashed and needed to get stitches.
> But I'd argue that those extremely rare cases are further proof that the in-person "threat of physical violence" does not play a part in making customer service work well.
The other advantages of in-person communication (which you raised) is that both sides can "read the room" and adjust their behavior before the situation escalates to violence. A customer service person might be more likely to bend the rules when they are in front of a person that's visibly angry or violent so that the situation does not actually escalate that far.
No it’s not. It’s gone because it only works on kulaks and the kulak class is very small now.
And there are no consequences.
Sometimes, it's a computer responsible for the decision.
These would not be so lightly regarded if someone had true consequences for this behavior. It turns into a complete lack of societal trust, something that people in turn are taken advantage by.
But some systems are complex because they're complicated. And the net of, say, regulated banking, is socially beneficial.
So punish the scummy behavior with the avid prosecution of just laws, obviously.
You're less likely to ignore a potential bug if a customer can cause damage to your business (by causing a scene in the store or physically hurting employees) as opposed to being "contained" within endless bureaucracy and phone queues.
https://www.bloomberg.com/news/articles/2020-12-18/riot-brok...
This is particularly true in cases where the actual issue is obvious and just stuck in a bog of internal bureaucracy. Now a company lawyer, who has a strong incentive to resolve the issue, access to said bureaucracy, and a certain extent of power to say "we're now doing X because The Law demands it, even if the stupid process says otherwise, make it happen" is dealing with it.
In most cases, I'd expect the lawyer to resolve it before he has to coach and send an employee to represent the company at the court, costing hundreds to thousands.
It also scales really poorly, effectively motivating companies to resolve issues before they get to that stage.
So, I drove to the nearest airport and went to the service desk. I got my problem fixed in about 5 minutes. I do agree something needs to be done about these customer service loops, if I didn't get my problem resolved I wouldn't have been able to go on my family trip, that we had been talking about with the kids for months. It is beyond ridiculous, in a fair and sensible some government agency would be able to prevent these things, but here we are.
Credit Unions where created to service customers that would not profitable for a normal bank, many decades ago I was one of those customers... Still today, even though my financial situation is far better, refuse to put any of my money in bank after the treatment I received from them. I have been with my current credit union for 20+ years, I love them, every loan I have gotten from auto to mortgage in the last 15 years is also run through a credit union...
Credit Unions is where it is at, people need to be educated to use them
I agree with your point. Credit Unions are pretty safe and tend to be rooted in the community in which they operate in.
- Knowing the credit union exists and which ones someone can join (not all of them are "anyone in [region]")
- Going to the credit union during business hours (no mean feat; several of the credit unions around me have shorter hours on Friday and three hours on Saturday)
- Qualifying for an account, and not just membership. Lots of credit unions pull Chexsystems--credit reports for checking accounts--and a report from the traditional Big Three and having poor credit will be a bar to an account (something that the ProPublica article points out as a reason people use Chime).
Those steps even presuppose that you find a credit union that, itself, isn't abusive. I was a member of one that was outright terrible and had miserable fees, but I had to stick with them for a year longer than needed because of a bankruptcy. There's nothing endemic to a credit union that requires it to be a "nice" entity, just that their structure makes it more probable.
And it all comes down to how many of us on this site are financially savvy or at least have a better understanding of the pros/cons of how banks and credit unions and "fintech apps" work. The people being targeted by the marketing for Chime are less likely to have that same set of information, and are winding up abused as a result.
A few years ago, we needed to buy another car. I filled out the loan application on my CU's website. Someone from the CU called me an hour later to tell me the APR and maximum loan amount, and to recommend a list of local dealerships that other members had good experiences with. The car salesperson did the usual "let me see if we can get you a better financing deal!" sort of thing, and when we showed him our loan paperwork, he stopped: "I've never seen an interest rate that low. I can't beat it. That's amazing."
I love my credit union and I can't imagine a plausible scenario where I'd ever go back to using a bank.
The key is to avoid large companies where your call will be "placed in a bucket of stomach fluid", and even worse, when you visit the branch the person trying to help you will be at the mercy of the same exact customer service line.
I'm glad you found a smaller business to trust.
unlikely. A big part of the problem is that the government has deputized financial institutions with enforcing anti-money laundering and anti-terrorist financing laws, and those institution face stiff penalties in the event such transactions slip through.
You can mitigate this somewhat by having accounts with multiple banks, but even then they can all be frozen at once. The benefit of a traditional bank is at least you can show up with an ID and beg for your money.
Chime does indeed market to those who aren't financially doing great, but it's a very complicated situation. Everyone should have a minimum of 3 months in living expenses saved, but very few do
We make fun of old people who lived through the Great Depression for keeping their money as cash or gold, but if this is the future of finance, well, gold bars under the mattress are looking batter and better with each passing day.
You have those funds spread out across multiple accounts, so if one goes down you still have access to some cash. you know, like a high availability cluster.
It'd take having physical, inconfiscable assets to protect from that.
That's not the impression I got. I was thinking of your account being closed by mistake because of fraud/AML system false positives, not because the legal system was invoked against you.
If only we had some way to store value that was more liquid and easier to store than pieces of gold...!
Push transactions also put the paying bank on the hook for whether the transaction was fraudulent or not. Whereas with a pull transaction, it is up to the receiving bank to clean up the mess from any fraud. This is why banks (especially smaller banks) will put daily limit on the ACH transfers you can initiate, but will process whatever externally-initiated ACHs land on your account.
I doubt that the law would be on your side if the bank called and told you that your account was closed, and you continued writing checks. At best that would prevent situations mentioned in the article where your account was frozen without your notice, but you'll still be out $10k while that's being resolved.
Is this what's happening here? The way I read the story it sounded like they froze the account and then the customer only noticed because her card was declined, rather than her account being frozen because she tried to use it. Even if the banks couldn't do "in flight checks" (because people use checks rather than debit cards), it doesn't prevent them from using "machine learning snake oil" to randomly close accounts.
This is where a justice system and a law system diverge...justice without meaningful access is symbolic.
The CFPB Arbitration Rule "prohibits covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service." [1]
I also have this vague recollection of a story recently about a law firm filing large numbers of arbitration complaints against companies, resulting in very large bills for those companies, because they are required to pay for an authorized arbitrator for each and every arbitration complaint. Unfortunately, I can't find the link to the story.
So it sounds as if the people being ripped off by Chime do have some recourse, if they can just get together with a law firm that specializes in class action lawsuits.
[1] https://www.consumerfinance.gov/rules-policy/final-rules/arb...
Doordash tried to weasel out of their arbitration clause but was denied.
[0]https://news.bloomberglaw.com/daily-labor-report/doordash-or...
Simple was the first big one. Then they got acquired. Then shut down. I switched to a bank called N26 that after 2 months flagged my account for "suspicious activity" and asked me to reupload identification documents. They rejected every single attempt I tried then shut down my account. I then do some reading and turns out they do this to a ton of people.
Having a fancy looking debit card and a nice app isn't worth the drama. I'd love to see one of these fintech startups actually last and not get acquired or turn into a way to market to consumers but it's looking pretty grim.
I have a habit of checking out most new free banking apps, looking for the best deals, UI, security, etc.
Chime immediately started sending my phone notifications with tons of emojis in them. It felt completely childish and I couldn't believe this was a legitimate company that people would put tons of money into.
edit: and disingenuous at best
And then later when you lose your shirt, you'd find he'd not actually bet on the horse you asked for, because he'd spoken to Captain Aykroyd's man who'd explained that the fix was in, Greased Lightning had had a plate of porridge to slow him down for breakfast; he'd instead put it all on Dreadnought at 8 to 1, which had won by a length.
You know come to think of it that's exactly who I want managing my finances.
That being said, the reality likely depends on your product and audience.
[1] https://www.leanplum.com/blog/powering-engagement-with-emoji...
Not meant as an insult. But if your retention rate is up 50% with 18 year olds, and down 25% with 30+ers, is that good?
My hangup is that it's a bank. As another so eloquently described, I prefer an ultra professional appearance. Money is important, and banking is ultra regulated. I want to feel they are on top of everything.
Pizza places all started using emojis in communications to me. And that's ok, it's just pizza.
But I don't want my doctor sending me an email with a crab and a skull.
Got the email today that the account was finally closed. Stay as far away from this company as you can.
I'm not entirely sure, but there was no way I was going to give out sensitive information (imo) to a website that I'm not familiar with. Even at the time I was trying to get support, It felt like the company wasn't even legit.
No great answer here. Maybe escalate to a manager and have a more involved conversation.
I would caution that before people try to blame the victims here ("don't use small banks!" "don't use banking apps!" etc), these things happen with large/established banks too. With accounts just being randomly locked for a "fraud investigation" that can take weeks (particularly for cash movements over 10K).
What my spouse and me are doing is we have two checking accounts at different banks with a different one of us as the primary. Pay-checks are received at one, and a scheduled transfer moves some money to the second, and bills paid from both. That way even if one of our accounts did get suspended while a hassle, we could weather is with relative ease.
Compare the terms from Bank of America, especially the "Withdrawal" section.[2] There are restrictions on how soon you can withdraw how much, and they tell you those up front. You can get at least $225 the day after a deposit. For new customers within 30 days of opening the account, withdrawals over $5,525 may be required to wait up to 5 days. For large cash withdrawals, you may need to go to a "cash vault" center and provide you own armored car. Stuff like that.
[1] https://www.chime.com/policies/chime/chime-user-agreement/#t... [2] https://www.bankofamerica.com/salesservices/deposits/resourc...
>You may terminate acceptance of this Agreement at any time by permanently deleting the Application in its entirety from the Authorized Device
Who wrote this agreement? Clearly they have no idea how apps or online accounts work.
> But remember, the Expedited Funds Availability Act requires the first $200 of a deposit that is not already subject to next-day availability to be made available by the first business day following the day of deposit.
> Deposits into accounts of new customers (open for less than 30 days)--Next-day availability applies only to cash, electronic payments, and the first $5,000 of any other next-day items; the remaining amount from next-day items must be available by the ninth business day. You may choose any availability schedule for deposits of other checks into the accounts of these new customers.
https://www.federalreserve.gov/pubs/regcc/regcc.htm https://en.wikipedia.org/wiki/Expedited_Funds_Availability_A...
Which is the whole point.
Regardless of this, those bank accounts are still FDIC insured, and thus they're subject to the same regulations, right? When I closed my Bank of America account they were insistent that any transactions or deposits after it was closed would be mailed to me in the form of a bill or a check, respectively. Is that not a requirement for all FDIC insured accounts?
It sounds like it depends. If the bank has good reason to believe the funds are fraudulently sourced, then it may lawfully be entitled to hold them until it can be shown (either to their satisfaction, or to the satisfaction of a court) that the funds are legitimate.
That being said, the article makes me think this is the custody bank’s AML process at work and Chime wasn’t prepared for the customer service aspect of on-boarding a bunch of “high risk” clients and then almost immediately having those accounts closed due to the risk assessment.
- ex-chimer
I can guess as to what is going on here.
I am not sure if my NDA still covers me talking about stuff there, but most likely is what has happened was folks either: not using their accounts (this will trigger eventual closer) or legitimately engaging in practices that would be... improper in any banking system. It's important to note that Chime is not a bank either. These closing actually most likely happened BECAUSE of Bancorp, and not because Bancorp wasn't policing Chime properly. There is a lot of CSR practices that occur there that aren't great and that is mostly due to the fact they refuse(d?) to spend the money to scale up the actual human teams as well as finding folks who also didn't want to rip chime off themselves from the CSR department (I know of one such case that I can't get into).
They are having serious growing pains which imo still is of course no excuse for not caring for the customers, but I have seen a lot of these cases and I have seen a lot of what people have been doing then run to the media to complain about, Chime doesn't just willy nilly close accounts without a serious reason. A lot of the times the customers are mad they couldn't pull a fast one on the risk team... Anyway, I am not really here to defend them. If you have any other questions I could probably answer them.
That said, I chalk this up to their massive size (well over 12,000,000 customers) and a large portion of refusing to scale up Human Resources and instead trying to use to tech to deal with a lot of this. A few complaints like this aren't all that weird, bigger banks have way more complaints and do way worse things.
Edit: I really can't talk about what I know would cause these things to happen, as, it would tip of fraudsters or people who legit have the feds after them. But the tools we used to figure this stuff out were pretty advanced.
Edit 2: In my tenure, I saw lots of systematic fraud and also saw lots of those exact people take to social media to complain about it. That is anecdotal of course. But I saw a lot of shit that would blow your minds. I also saw many individuals engaging in fraud that they may not have even realized was fraud. One such example was the everyday Jane/John trying to deposit the same check multiple times when they knew full and well it was deposited first. Not to mention the number of dick picks people sent in via check deposit. Thanks to patents from other banks I was not allowed to deploy the ML platform I built for the mobile app to capture ONLY the check and its information, as opposed to human parts that shouldn't be in the picture.
Edit 3: Again, I am not defending them, but if you are not in Finance then honestly you're out of your depth understanding what is going on here. No offense.
Edit 4: This also reminds me of the time Bancorp went down for like 3 days and everyone took to twitter to say that China hacked Chime which was both funny, sad, and scary. Of course that isn't what happened, Bancorp is just fucking shitty.
The article directly contradicts what you're saying. Do you think the piece paints an unfair or inaccurate characterization of the complaints? (from the article)
>Of the 920 complaints filed about Chime, 197 were tagged as involving a “closed account.” The CFPB’s complaints are labeled inconsistently, and many of the other 723 also detail problems involving accounts that were closed against customers’ will. By comparison, Wells Fargo, a bank with six times as many customers and a lengthy recent history of misbehavior in its consumer bank, has 317 CFPB complaints tagged for closed accounts over the same time period. Marcus, the new online bank created by Goldman Sachs, with 4 million customers, has generated seven such complaints.
>I do know that every person on that team when I was there did there best to try and resolve the issue
"My colleagues had good intentions back when I worked there" is nothing against the facts. If you had read the article, you'd see that Wells Fargo, the bank that everyone loves to hate--with 6x the customers of Chime!--has only slightly more complaints for "closed account."
It's nice for you, as a former employee, to imagine that people are unfairly complaining more about Chime taking away all their money. But you could just as easily make the reverse argument: Chime users are less wealthy than users of other platforms and are therefore less likely to have the time and wherewithal to complain to the CFPB.
You probably don't like that argument, but you have to admit that I am presenting exactly as much evidence as you are.
This is the unfortunate side of disruptive tech. It can't - and shouldn't - replace people. But it seems the allure of cost controls is too strong even if it hurts customers, and eventually the business.
The reality in the US is that financial institutions are liable for detecting any and all illegal activity on their platforms, reporting it to FinCEN, and closing accounts. If you fail to do this you lose your money transmission licenses and/or banking partnership. Depending on the exact nature of the issue, holding customer money hostage can even be a legal requirement.
Scaling up support at fintech companies is definitely hard, and certainly the companies can and should do a better job of this. But dealing with the regulatory burden is also crazy difficult, and many folks doing shady stuff (fraud, drugs, money laundering, CP, etc etc) are more likely to use the newer platforms.
Real banks often just don't have to deal with this as much, because they make you sign up in person, with ID, and ask you all sorts of questions about your source of income etc up front. However, real banks can and do also close customer accounts (used to be very common for folks who bought crypto with their checking account, for example).
I previously had Simple (rest in peace), and was totally okay with it, but it clearly wasn't worth it to BBVA/PNC. I went to SoFi just because they're making moves to get their own charter, rather than sitting with Bancorp.
Now you've got Robinhood, Credit Karma, Chime, etc etc all running Bancorp backing accounts so really there's no fundamental difference between any of them.
> Chime confirmed that five of the anecdotes were well-founded; the company acknowledged making mistakes and returned each customers’ funds.
> The company confirmed, in interviews for this article, that it should not have closed Robertson’s account.
The article also addresses your claim that
> A few complaints like this aren't all that weird, bigger banks have way more complaints
by directly comparing the numbers, and Chime had by far the most (per customer):
> Of the 920 complaints filed about Chime, 197 were tagged as involving a “closed account.” The CFPB’s complaints are labeled inconsistently, and many of the other 723 also detail problems involving accounts that were closed against customers’ will. By comparison, Wells Fargo, a bank with six times as many customers and a lengthy recent history of misbehavior in its consumer bank, has 317 CFPB complaints tagged for closed accounts over the same time period. Marcus, the new online bank created by Goldman Sachs, with 4 million customers, has generated seven such complaints.
If I had to guess, it's growing pains combined with a "growth is more important than a few people accidentally getting crushed underneath" approach combined with pressure to do more about the fraud that led to this. If they're doing this and still accepting new customers, they're fully responsible for the pain they're inflicting.
At the very least, they could have tried to _actually_ make things right with the affected people:
> We have made efforts to make things right with these members.” (Robertson said that, beyond unfreezing her funds, Chime has not contacted her.)
This would mean compensating them for the time wasted, the stress and anguish caused, and financial cost (e.g. payday loans) incurred.
[1]: https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CEL...
[1]: https://help.chime.com/hc/en-us/articles/224459628-Are-Chime...
"Excellent customer service" for me means never having to talk to the bank because everything just works, and it's incredibly difficult to judge how good banks are at that.
It's just not worth this kind of hassle, where the best case scenario is waiting around 3-4yrs for the government to print your money back to you...
Just file a CFPB complaint: https://www.consumerfinance.gov
"Just <do x>" is considered facile and sometimes rude, if not harmful; it implies that things are easier and/or more effective than they actually are. (The CFPB does not represent you personally, and is not obligated to act on your behalf, unlike an attorney.)
> Hiring an attorney is a good way to not have any money since you used it to pay the attorney
It depends on how much money is on the line. Many small-claims courts don't even let you have an attorney, and the filing fees are small and the effort to file is minimal. On the other hand, if there's a lot of money at stake, having an attorney can pay off.
And there's always somewhere in between: having an attorney send a demand letter can sometimes yield good results, without necessarily breaking the bank. Getting an attorney involved doesn't necessarily imply that you're going all the way to trial and judgment.
> And you have to find one
You also sometimes have to find a plumber when a pipe springs a leak... Life isn't perfect, and that's why these people exist.
I believe US banks also have the right to suspend accounts for "fraudulent activity", correct me if I'm wrong.
Therefore, you can't expect banking startups to be any better. Fix it on a higher level.
But guess what, I was still a customer of the bank. I had all the resources I'd normally have: customer support.
From there, they shipped me a new card. I was still unable to buy groceries for a day or two, but I never lost access to my money.
The other issue is that Chime is not legally a bank so is not regulated in the same way that banks are.
"The rules don't apply to us" is one hell of an unfair advantage to tout on a VC pitch deck.
>Also crypto should be illegal
It wouldn't be an issue if you could appeal and talk to a human, but challenger banks are, by design, understaffed, and they have no legal obligation to explain why they're terminating your account.
However I haven't heard of any bank (proper bank, with a license, challenger or otherwise) keeping your money in such case.