Dedicated to Deposits: Deals, Data, and Discussion
About Ken Tumin About Ken Tumin - Founder and Editor

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

Featured Savings Rates

Popular Posts

Featured Accounts

CFPB Expanding to Include Checking & Savings Account Complaints

POSTED ON BY

CFPB Expanding to Include Checking & Savings Account Complaints

Last week the new Consumer Financial Protection Bureau (CFPB) announced that it is now taking consumer complaints on deposit accounts. For those not aware of this bureau, it was founded as a result of the Dodd–Frank financial reform act, and it began operation on July, 2011. Its main focus has been on credit cards and loans, so it's nice to see it expanding to deposit accounts. Here's an excerpt of the CFPB announcement:

That is why I am so pleased to announce that today we are expanding our consumer response system to take consumer complaints on checking and savings accounts. By the end of the year, we will be taking consumer complaints on all consumer financial products and services. But adding deposit accounts is an important step for us.

Deposit accounts play a critical role in the lives of most Americans. We use our checking accounts and other bank services for cashing paychecks, paying monthly bills, making purchases, withdrawing funds, and managing our money. Many of us store our rainy day fund in a savings account. But checking and savings accounts — whether they are with a credit union, a thrift, or a bank — can also be a source of great frustration. We have heard story after story of consumers being hit with fees they did not expect and do not understand. We take these complaints very seriously.

I thought this may be a good opportunity to highlight the issue that we have seen in which credit unions have retroactively increased CD early withdrawal penalties (EWP). You can read about these cases in this blog post. The main issue at stake is the lack of transparency in the credit union disclosures. It's in no way obvious that CD holders should expect for the early withdrawal penalty to be increased before the CD matures. In my opinion, it clearly goes against the mission as described at CFPB's About Us page:

Above all, this means ensuring that consumers get the information they need to make the financial decisions they believe are best for themselves and their families—that prices are clear up front, that risks are visible, and that nothing is buried in fine print.

The main focus of CFPB appears to be checking accounts, but the announcement did mention deposit accounts. In addition, it asked readers to "reach out to us and tell us your story" at this CFPB form page. This isn't a complaint form, but according to this form instructions, "Your story will help inform how we work to protect consumers and create a fairer marketplace." I thought it would be useful to alert the CFPB to this CD early withdrawal penalty issue. So I submitted a description of this issue. If you are concerned with this issue, you might also want to use this form. The more of these stories provided, the more chance it will get attention.


  Tags: CD rates

Related Posts

Comments
14 Comments.
Comment #1 by Anonymous posted on
Anonymous
Another mess will start with Consumer Financial Protection Bureau.
They will punish the banks and the banks will punish the customers and there will be no end in sight of catch 22.
This was un-necessary law and will backfire on all of us. Politicians can not see further than their noses.

13
Comment #2 by viking posted on
viking
I guess that they are only taking complaints for deposit accounts with Banks, and not Credit Unions?

1
Comment #3 by viking posted on
viking
I dissagre with Anonymous (post #1). Banks do whatever they want to do and there is very little recourse for a consumer who has been treated unfairly or even been subjected to regulation violations. OCC, for example, is very poor in helping consumers, and are not very "consumer friendly".

In contrast, it appears that the Consumer Financial Protection Bureau may be the only way for consumers to get help with issues against their banks (except for legal actions and possibly BBB).

12
Comment #4 by Anonymous posted on
Anonymous
 

To viking - #3,




 

I disagree with your statement.




 

Banks can not be intimidated with threats and punishment for someone else who has no right 

to complain on the first place.




FDIC rules trump any other sub laws like Consumer Financial Protection Bureau.

 




What are you going to complain about, you did not get that loan or the interest rates are too low or too high

or you want to be exempt from the rules and regulations and the loan be granted to you 

even if you did fulfill the requirements.

 

The banks have rights to ban you from their bank for life, are you going to complain about that too.

 

Number one poster is correct, duplications and bureaucrats and more waste of our tax dollars 

can not solve the banking problems.

6
Comment #5 by Anonymous posted on
Anonymous
To Viking,

You mentioned the possibility of reporting a bank to the BBB, well, I’ll tell you a personal experience I had with the BBB.  I wanted to file a complaint on a company that defrauded me.  It happened that this company was a member of the BBB.  When I spoke to the BBB about them and I asked the BBB to issue a negative report to them, the BBB responded, “We do not give negative reports to BBB members.”  Imagine that!!!  This reminds me of the 1920’s when mobsters used to have business owners pay for “protection” of their property.  If they didn’t pay, a brick may come through their window at night.  The next day the same person would appear at the business and tell the owner that the brick through the window wouldn’t had have happened if they paid for the “protection” that was being offered.  The BBB is today’s version of the mob’s “protection.”  The BBB doesn’t have any problem giving out negative reports on non-members, but you will never see a negative report on a member.  So pay your BBB dues and you’ll be fine.  That’s why I don’t trust any of their reports, unless they give a good report to a non-member.  I won my case in binding arbitration which the company refused to honor and the BBB still refused to give them a negative rating!  It took many, many phone calls to get the BBB to act.  As long as the BBB was getting paid from this company, they didn’t want to say anything bad about them.  If the BBB loses a member, they lose income.  In my opinion, the BBB is on the side of the company paying them to protect them and not the customer who is not paying.  It took me about six months of talking to the BBB and their supervisors, but the BBB finally revoke the membership of the company that defrauded me and gave them have a “F” rating.  Interestingly enough, then about 30 other complaints against this company appeared.  These complaints would have never been recorded if the company got to keep it’s BBB membership. 

I no longer trust a BBB report.

6
Comment #6 by viking posted on
viking
Anonymous - #5;

That is why I wrote "possibly BBB". May be better if the bank is not a member.

1
Comment #7 by viking posted on
viking
Anonymous - #4,

Your examples were not what I had in mind; There are many other situations where the banks brake regulations or do not honor their promotions, for example.

Take a simple example when a bank promises to deposit money in your account for performing certain tasks (e.g. Billpayments, Direct deposit etc). Where is the consumer supposed to turn when they do not honor their promotions? Legal action may not be practial (in particular if it is an out-of-state bank).

I have also experienced a credit union (not sure if CFBP will cover those?) who broke multiple bank regulations, including closing our joint and indivdual share accounts against our wishes (a credit union may not close the primary share accont w/o board approval). We are filing complaints with the State (as it is not a Federal CU).

I have to admit that I am not sure if CFPB may be able to enforce any of their "recommendations" (if any) to the bank(?), but at least CFPB's involvment will cause them extra work and this may lead them to be a bit more careful in the future before always ignoring their customers. Furthermore, I have had situations where I am not able to escalate my issue(s) to top managment until a 3rd party got involved. Just reaching top managment may be all that is needed.

5
Comment #8 by 51hh posted on
51hh
One experience of a fellow FWF poster indciated that CFPB has no intention of arbitration and no authority of enforcing/overruling.  In this example of a Chase AARP credit card issue, they only referred the complaints to Chase Executive Office and eventually agreed with their deliberation.  Thus it is equivalent for the consumer to simply go to the Chase Executive Office for resolution, which yields negative result.

Thus it is another bureauratic organization to further eat up our tax money unfortunately.  Resolving consumers' bank issues is not their primary mission anyway:D  Just one case for reference.

7
Comment #9 by Apache posted on
Apache
Wow!  Someone actually blew the whistle on BBB!!  Good for you!  I have known that for years!  BBB imo is one big farce!

7
Comment #10 by Anonymous posted on
Anonymous
 

To viking

 

You misunderstood the function of Consumer Financial Protection Bureau.

 

You can not file complain against the banks there.

 

It is for resolving discriminatory loan practices,

 

Poster number 1 got it right, it is another Government bureaucracy.

3
Comment #11 by viking posted on
viking
Anonymous - #10,

If the mission of  Consumer Financial Protection Bureau would only be to  resolve discriminatory loan practices, than I would agree that their scope would be too limited (even though it may help some).

However, that is not how it is explained on their website:   http://www.consumerfinance.gov/the-bureau/

For example:




Enforce: Like a neighborhood cop on the beat, the CFPB supervises banks, credit unions, and other financial companies, and we will enforce Federal consumer financial laws.[/H2]


1
Comment #12 by Anonymous posted on
Anonymous
Viking,

Federal consumer financial laws[/H2] deal most in discriminatory issues.


3
Comment #13 by Anonymous posted on
Anonymous
 

to viking post #7




You wrote:

"""Take a simple example when a bank promises to deposit money in your account

for performing certain tasks (e.g. Billpayments, Direct deposit etc). 

Where is the consumer supposed to turn when they do not honor their promotions? 

Legal action may not be practial (in particular if it is an out-of-state bank). """




My question to you is:

Did you ever read the fine print and disclaimers for such ptomos and bonuses?




They all say: The banks reserve all of the rights to: change, modify, deny, discontinue and so on,

and not even giving a notice of such actions, is within the rights of the bank.




Now if you complain to Consumer Financial Protection Bureau, what are you trying to accomplish?

The bank to give up their rights and honer your whishes will never happen, 

Consumer Financial Protection Bureau is not designed to handle such cases.

1
Comment #14 by Anonymous posted on
Anonymous
Let's get this straight.  This:

Enforce: Like a neighborhood cop on the beat, the CFPB supervises banks, credit unions, and other financial companies, and we will enforce Federal consumer financial laws.[/H2]  

...doesn't mean squat.  The CFPB doesn't supervise banks and credit unions.  These institutions have their own regulatory agencies like the OTS, OCC, NCUA, and, of course, the FDIC and Federal Reserve.  The CFPB doesn't place poorly-performing institutions under Consent Orders or close them when they are no longer capable of remaining solvent.  It has no teeth.

 

If you have a problem with a bank or credit union, find its regulator here:

 

http://www.helpwithmybank.gov/national-banks/national-banks.html

 

Then, contact the closest local office (e.g., in the case of the OCC, the office of the local Deputy Comptroller or the nearest field office) of that regulatory agency.  For the big national banks (B of A, Cap One, Chase, Citi, Wells Fargo, and such), contact the Examiner-in-Charge (EIC) on the list below:

 

http://www.occ.treas.gov/about/who-we-are/district-and-field-offices/large-banks-info.html

 

Of course, you won't get the EIC, but the fact that you know to contact the EIC should get you in touch with someone in the EIC's office who can more directly address your problem than whoever is on the other end of the CFPB's web complaint form.  I know from personal experience that the folks in the local regulator's office are usual quite responsive in dealing with consumer complaints.

 

It takes more effort to locate the proper regulatory agency and talk to the local staff, but it's definitely more effective than filling out a form on a web page, no matter how well-intentioned.

 


1