Recently I filled out an application for a large CD online with an out of state US bank that came highly rated by Bauer Financial. My application was approved, and two days later the funds were taken out of my checking account for the CD. However, the bank issuing the CD did not open my CD account until SEVEN DAYS AFTER my funds were withdrawn from my checking account, and they will not credit the interest due to me for those seven days, saying the account hadn't been opened yet. When I called the bank, the representative gave me the runaround, saying they needed 3-4 business days for "processing" the new account. Their disclosure documents say nothing about a delay for processing and state that "Funds from electronic direct deposits to your account will be available on the day we receive the deposit". The representative tried to get me to believe that the bank didn't receive the funds until "three business days" after they were taken out of my checking account. Where were the funds all that time? Out in space? Are there any regulations to govern this situation? Should I file a complaint with their State Regulator? Thank you.
Answers
I would first escalate the discussion to a Customer Service manager and take careful notes of the explanation given. If the answer is not reasonable or you are still not satisfied, I would file a complaint with the CFPB (Consumer Financial Protection Bureau) and quote the details of the explanation given to you and by whom.
Good luck and please keep us posted.
There are ways around their holding up the interest on your funds but you need to work it out with the bank "before" you let them get a hold of your money. I have a feeling the State Regulator would tell you they were going by "their" rules for their accounts. This is why one must know what the rules are "before" doing business with certain banks. I know sometimes the ACH withdrawals are not always with a 24 hour framework but if you have proof of exactly "when" they got your funds, I would think you should have begun getting interest as of that date. Something smelly here about their approving your application which shows they had one on hand and still making you wait that long before paying interest. I have never had that problem once they had the application and funds in hand.
One thing, and I can't confirm this, but I was told previously by a bank I was involved with that banking regulations require the receiving bank to "process" (that was their word) all incoming overnight ACH credits by the time the bank opens in the morning. Again, I can't confirm that, but that is what the bank told me. But if so, then the bank you are speaking about is violating that. It would be one thing to not post until that evening, but you must be credited by the morning of that day, if what I was told is correct.
Secondly, you make a very good point about the disclosures saying that electronic direct deposits will be available on the day they receive them. I'm not sure that actually applies here, as 1), that might not apply until the account is opened and 2), your's might not count as a "direct deposit," as it was a pull and the account was not yet opened to be directly deposited into, so you could not do it "direct," maybe. But maybe it does apply; It certainly ought to. But I would include that disclosure point in your complaint regardless -- that might very well be a contractual obligation.
I also have to think you have a very good point that they can't take your money and then claim it takes them four days to process it -- without any notice to you of that or remuneration to you for that period; it is illegal for them to do that with a check, and I have to think the same would apply to an ACH transfer -- but again, you would have to confirm. You never agreed to give them a free short-term loan or welfare for the bankers!
Also, while I suspect the entire delay was the new bank, it is possible that your bank you drew from delayed in putting the money into the ACH. I'm not sure how to follow up on that. But even so, there still are the other four days that the new bank admits to delaying.
And lastly, please post your experiences in a review post at this Website for that bank. Everyone would like to have that as a warning they can check under that bank's name if they are considering opening an account there.
I got our accounts opened on 10-16. I have made several calls since my wife and I applied and were instantly approved on 10-6.The employees are very nice and I know they are doing the best they can, they simply have so many accounts to open.Want to say thank-you so much to Kelly, who was able to help me on the phone and get our accounts opened.