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Bank Of America Customer Forced To Pay CD Early Withdrawal Penalty On Last Day Of Grace Period

Sunday, July 17, 2011 - 8:56 AMBank of America - Details
The Credit Slips blog describes an issue a Bank of America customer experienced when she tried to close her CD on the last day of the CD grace period. Bank of America claimed she was too late, and she was forced to pay the early withdrawal penalty. If you remember, Bank of America now has large early withdrawal penalties that are not connected with its ultra low interest rates.

After she filed a complaint with the OCC, Bank of America responded with a refund of the penalty and a $400 gift card for her troubles.

If you think a bank has acted wrongly and you can't resolve the issue with the bank, you should contact the bank's regulator. I have more details in this post about how to file a complaint against your bank or credit union.

Most CDs do automatically renew at maturity. If you want to withdraw the money, it's critical that it be done during the grace period which typically lasts from 7 to 14 calendar days from the maturity date. In this 2008 post, I described more banking gotchas related to CDs.

Credit to The Finance Buff blog post for this find.
8
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,053
1. Sunday, July 17, 2011 - 2:46 PM
Do business with BoA at your own risk. I'll pass.
4
loulou541 posts since
Aug 3, 2010
Rep Points: 3,388
2. Tuesday, July 19, 2011 - 12:22 PM
I second Ken's advice about filing a complaint with the appropriate regulator.  Often, you can find the regulator on the state government website of the state in which the bank is chartered.  In my case, with Umpqua Bank, it was the Oregon Division of Finance and Corporate Securities (DFCS).  I emailed them a detailed description of what happened, and included the specific location of the branch and the name of the branch manager with whom I attempted to resolve the problem.  DFCS apparently contacted the management of the bank, and about six weeks later I received an apology letter and instructions to return to that same branch to have the issue resolved.  I did so, and the branch manager was extremely polite and resolved the issue.

So, if you run into a bank or credit union that isn't living up to their commitments, first try to resolve it with the branch manager.  If there is another branch nearby, you might try another branch (and perhaps more reasonable branch manager).  If that doesn't work, try contacting a bank executive (usually listed on their website) and/or file a complaint with the appropriate regulator.  It worked for me.

Good luck!
5
ravrav36 posts since
Apr 21, 2010
Rep Points: 147
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