U.S. federal banking regulations require all bank accounts to have a registered "physical" address. Banks are required to ask for a physical address before opening a new account.
This regulation is not new, but it has become more actively enforced since 9/11. We have witnessed a rising trend where banks are reviewing all their customer accounts to verify that the physical addresses are actual physical addresses. In fact, we noticed a spike of queries regarding this in January 2019. A kind of trend typically indicates that banks are reviewing their customer accounts to ensure they all comply with federal banking regulations.
Physical Address vs. Mailbox Address
A physical address is an address for a tangible building at a specific street address. The address can be a home or office or even an office suite inside a corporate building. A PO Box number is not a physical address because it's just a mailbox located inside a post office. In and of itself, a PO Box does not contain or connect to a physical address.
Physical Address vs. Commercial Street Address
A commercial street address, or commercial address, is an address that pinpoints a commercial building at a specific street address. We use the word "commercial" to differentiate a business address from a residential address. We use the word "street" to differentiate our address from a PO Box address. (In this case, “street” refers to any thoroughfare designation, e.g., “avenue,” “road,” “boulevard,” etc.)
However, a commercial street address does not necessarily mean it's a physical address as defined by the banks. They assume that a commercial street address is a physical address.
Physical Business Address vs. Mailing Address
While banks require your business address to be a physical address, your mailing address may be a PO Box address. The mailing address is where all your statements and any mailed correspondences are to be sent. If the mailing address is a PO Box, the physical address is still required to be on file to satisfy federal banking regulations.
Acceptable Physical Address for Banks
The definition of “physical address” may differ from one bank to another. Some banks will accept a residential or business address while others will accept only business addresses. In every case, a physical address is never defined as a mailbox or PO Box address.
In order to ensure that your address is a physical address, banks will do the following:
- Check the address against the USPS address database to see if it's a mailbox address.Some banks will also check to see if it's a registered agent address as that's also not acceptable as a physical address.
- Request proof of address.They may request a copy of a lease agreement or an actual utility bill to indicate that the address does physically exist and that the account applicant occupies or does business at that physical address. Some bank may either accept or require a city or county business license as well.
Getting a Physical Address
There are a couple of ways to get a physical address:
- Use your residential home address.This works if the bank accepts a residential address and you have a physical residential address.
- Get a real office.This will typically be the least flexible and cost-effective option but it will get the job done. Find the smallest, most affordable office suite you can to reduce the cost.
- Find a bank that will work with you to accommodate your specific needs.
There are other options available. Almost none of them are ideal for every situation.
What ACS Inc. is Doing to Solve This Problem
- We are pleased to introduce our new “Lease Plan” designed specifically to address this problem. With this plan, you sign a legal lease agreement for a physical space that you can then use as legitimate proof of address for opening U.S. bank accounts. Our plan comes bundled with a virtual mailbox to use as your mailing address as well as other services and benefits.
- We can also acquiremobile telephone service with the leased address. Communications from the service provider can be used as the Utility Bill proof of your physical office.