I opened a business checking account with a local Utah bank about six months ago for my LLC (I sell handmade furniture online). Last week they sent a letter asking for "proof of business activity" , invoices, contracts, etc. I've never had a bank ask for this after the account was already open. Is this a new thing? I'm worried they're going to freeze my account.
banking
Why did my Utah bank ask for proof of my LLC's business activity?
Banks have been getting hammered by regulators over BSA/AML compliance the last few years. Smaller banks especially are doing periodic "know your customer" refreshes. It's annoying, but probably routine.
Six months is about the window some banks use for an initial review. Did you happen to make a bunch of cash deposits or anything that looks unusual for a furniture business? That can trigger a flag even if it's totally innocent.
lol my credit union asked me for my "business plan" for an account I'd had for two years. I sent them a screenshot of my Etsy shop and they went away. Just give rhem something and move on.
No cash deposits really, mostly online sales and a few local pickup payments through Venmo. I'll dig up some invoices. Thanks.
Utah has some weird quirks with LLCs and banks because of all the registered agent stuff. If your LLC address is a virtual office or a mail drop, some banks get twitchy and want to see you're actually operating. Is your business address a real physical location?
That's a good point. Also, if you're a single-member LLC and the account is in the the LLC name but your personal SSN is on file, that can look a little off to a reviewer who's used to seeing an EIN. Not a big deal, just something they might ask about.
Honestly the "proof of business activity" letter is usually just a checkbox for them. Send two or three invoices and a quick sentence about what you sell. If they actually freeze the account without warning that's a different conversation, but this sounds like routine paperwork.
This is why I keep a folder of PDFs just for bank nonsense. Every year someone wants something. Last time it was a utility bill to "verify my address" for an account I'd had for four years.
If they do freeze it, walk into a branch and ask for a manager. Letters are scary but half the time the person who sent it doesn't even remember why. Source: sed to work at a bank, we were not organized.