The US federal banking regulations require all bank accounts to have a registered real "physical" address. This is why banks are required to ask for a physical address when opening a new account.
This regulation is not something new, but it has never really been actively enforced in the past. However, in the past couple years, we've started noticing a trend where banks are running through all their bank accounts to verify that the physical addresses are really physical addresses. In fact, we've seen a spike of queries regarding this in January 2019, so it's safe to say that banks are sweeping their accounts to check this so they can comply with federal banking regulations.
Physical Address vs. Mailbox Address
A physical address is an address for a tangible building, which can be a home or office building or even an office suite inside a corporate building. For that reason, a PO Box address is not a physical address because it's just a mailbox located inside a post office.
Technically, all of our location addresses are physical addresses. However, in order for us to be able to tack on a mailbox number (the "#xxxx" portion of the address) to the end of our address, we are required to register ourselves as a Commercial Mail Receiving Agent (CMRA) with the post office. When we do that, the USPS will flag and mark our physical address as a CMRA address. Once that's completed, our address is no longer considered a physical address but is now considered a mailbox address. This is what the USPS database shows for our Nevada location:
Physical Address vs. Commercial Street Address
Some people have asked us what the difference is between a commercial street address and a physical address. Our definition of a commercial street address, or commercial address, is an address that points to a commercial building. We use the word "commercial" to differentiate our address from a residential address. We use the word "street" to differentiate our address from a PO Box address.
However, a commercial street address does not necessarily mean it's a physical address as defined by the banks. It depends on whether the address is categorized as a CMRA address. This is the part where most people get confused on. They assume that if it's a commercial street address, then it must be a physical address.
Physical Business Address vs.Mailing Address
While banks require your business address to be a physical address, your mailing address CAN be amailbox address, or any address for that matter. The mailing address will be where all your statements and any mail correspondences would be sent to. So in that regard, the physical address is really used to satisfy federal banking regulations.
Acceptable Physical Address for Banks
Even the definition of a physical address differ across banks. Some banks will accept a residential or business address while others will only accept business addresses. But in all cases, a physical address cannot be 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 mailbox address. Some will even check if it's a registered agent address as that's also not acceptable.
- Request for proof of address. This may be a lease agreement or an utility bill to show that the address does physically exist. Some may accept a city or county business license as well.
Getting a Physical Address
There are a couple ways to get a physical address:
- Use your residential home address. This works if the bank accepts a residential address AND you have a residential address you can use. You can then set your mailing address to your VPM mailbox address. This will allow you to still use your mailbox to receive and digitize your mail.
- Get a real office. This will likely be the least flexible and cost effective option, but it will get the job done. Find the smallest office suite you can find out there to reduce the cost.
- Find a bank that can work with you to accommodate your specific needs.
There are other options available, but almost none of them are ideal.
What We're Doing to Solve This Problem
We are excited to announce that our new TruLease Plan is now available to address this problem. With this plan, we sign a legal lease agreement for a physical space that you can then use as proof of address for opening U.S. bank accounts. This plan comes bundled with a virtual mailbox to use as your mailing address as well as other services and benefits. Learn More
