Can A Bank Refuse to Keep My Account Open Because of A ‘Lawful Money Demand’?
No! All banks (federal, state, public) have a fiduciary responsibility to their shareholders. While there is a clause that permits the bank to close down accounts for any reason – legally they cannot exercise that option unless they are losing money – that’s what fiduciary responsibility means! Lawful money doesn’t lose a bank money, they still profit. Only now, the bank has simply reduced its potential profitability by 90%. Naturally, a bank will try to come up with a ingenuine reason for closure and since most banks are billion dollar corporations - it is hard to fight such a decision despite being right.
Interestingly enough, people have been redeeming lawful money since 1933 (it’s actually been an issue since the Civil War). Most of the time, they would just exchange the Federal Reserve notes for United States notes, but that changed in 1977. Since then, the banks do not circulate US Bank notes (with red seals and serial numbers) Federal Reserve notes serve just fine, once the demand is recorded on all deposits and withdrawals, it’s all the proof one will need. The banks have no choice. A banks, the IRS and the Federal Reserve would never willingly violate the agreement they have with Congress.
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