Does A Bank Have A Fiduciary Duty To Transfer CD Funds In A Timely Manner?

Confused1
Confused1   |     |   24 posts since 2018

On April 17th, my new institution faxed over direct transfer instructions to Synchrony Bank for my IRA CD maturing the next day. I called on the 22nd since funds were still in the account. Funds were removed from account on 23rd, I called a week later, still not received at other institution. I've made multiple phone calls and I've been in terrible stress about the missing funds and been constantly assured that there was nothing they could do till ten WORKING days had passed which was yesterday. I was able to finally talk to a supervisor yesterday who agreed to reissue a check today if funds still not received, I also missed a call from another manager from the Kansas office promising the same outcome. Meantime the check finally showed up yesterday on the 10th working day, the postmark showed the mailing date as April 30th and the check date as April 23rd so they've been using my money and not paying me any interest since the 23rd. Do I have any options here, this must be illegal in some way? I have notified Synchrony that check now received but I still want to talk to the manager about this delay that has cost me a loss of 14 days interest. I've seen other similar comments online about Synchrony bank, seems this is a common scam, who can I report them to?



Answers
QED
QED   |     |   95 posts since 2013
It's not illegal. It's just smart business . . . for them . . . not for us, of course.

I just had an IRA CD mature myself. As I have done for many tens of years, I took possession personally, and quickly, of my own IRA money. Under IRS rules I then had 60 days to reinvest that money into a new IRA. This is called a rollover. I was able easily to work within that 60 day limitation, and the new IRA account was opened quickly, without any trouble or fuss, and beneath my direct, personal, supervision. There was no "custodian to custodian" transfer of the funds because there are more horror stories when things are done that way than I'm able to recount.

So why do more people not take advantage of that 60 day gift horse? I have no clue whatsoever. You want something done right? Do it yourself.
111
111   |     |   65 posts since 2019
Sometimes a direct, NON-"custodian to custodian" transfer works fine, as you mentioned. But note that since 2015, IRS rule changes have limited these to a maximum of 1, in any particular 12-month period, no matter how many IRAs a person owns.
QED
QED   |     |   95 posts since 2013
Thank you for mentioning that, 111. And you are correct. I have played "KISS" with my IRA for so many years I forgot there are other approaches. "KISS" for me means all my IRA funds are together in one place, all the money moves together and all at one time, and all my IRA investments last one year or longer. But of course this "KISS" approach is not appropriate for everyone and does not well serve the needs of everyone. I should have thought of that. The approach has worked great for me, though. The notion of custodian to custodian transfers gives me the creeps.
Confused1
Confused1   |     |   24 posts since 2018
I already did a rollover in February so that was not an option unfortunately.
On the positive side, I did forget to mention that I called US Alliance last Friday at 2pm their time and had them transfer some IRA funds. It was done that day and Frontwave received the check on the Monday. That's amazing customer service from US Alliance, of course they're a credit union not a Megabank..
barry_NY
barry_NY   |     |   46 posts since 2015
Synchrony CSR seems to have a "follow through" problem. I've had issues with them forgetting to do things that they said would be taken care of. Unfortunately, banks holding onto money during transfers is part of the banking game.

I believe there is another rollover option that is still within IRS rules. You can have the old bank issue a check in the name of the new bank, which you can take to the new bank at your leisure. The key is that you are not in physical control of the money.. I had one bank charge me a $75 custodial transfer fee hidden in the terms. The CD was from long before the rules changed, so I never thought that this fee would apply to me when I opened it.
Confused1
Confused1   |     |   24 posts since 2018
US Alliance got me for a $30 transfer fee and they also charge a $3 monthly fee for IRA's which was fine with me because of the better rates when I opened the account. The Frontwave 4% deal was simply to good to pass up especially since I was already a customer
Been_There
Been_There   |     |   2 posts since 2019
I agree with barry_NY. Synchrony may be taking advantage of depositors because they think they can get away with. This Januaru 24th, when my IRA cd matured, it took 4 weeks to reach the other institution. I, at first, was thinking about taking legal action. But, decided against it. I should have opted for a wire transfer which would have been cheaper considering the loss of interest resulting from paper check delay. I have decided not to deal with Synchrony Bank ever again.
ORInvestor
ORInvestor   |     |   23 posts since 2014
Would you please clarify what you mean by taking "possession personally, and quickly, of my own IRA money." For an out of town account can you have funds from an IRA wire transferred to a non-IRA account?
Sylvia
Sylvia   |     |   204 posts since 2012
Synchrony Bank is regulated by Office of the Comptroller of the Currency (OCC). You may be able to file a complaint with the OCC, https://www.helpwithmybank.gov/complaints/index-file-a-bank-complaint.html. Link also includes # for speaking with a CSR.
Confused1
Confused1   |     |   24 posts since 2018
Thank you Sylvia, that"s what i was looking for. I will file a complaint, not that I'm expecting any compensation. I just refuse to sit back and let them pull these kind of shenanigans with peoples money without rattling their cage a little and documenting it with the banking authorities. I'm going to name names of the two supervisors that never called me back and I have the postmarked envelope which I got from Frontwave so they will have to explain the discrepancy.
Sylvia
Sylvia   |     |   204 posts since 2012
Good luck, Confused1. In case you missed explanation, this is how complaints generally play out, https://www.helpwithmybank.gov/complaints/what-to-expect/complaints-what-to-expect.html. Expect the OCC to share complaint with Synchrony, and for the process to take awhile.
me1004
me1004   |     |   859 posts since 2010
I don't know if there is a time limit for the transfer to be completed, but it is routine for it to take a while.
Ally6770
Ally6770   |     |   2,770 posts since 2010
I closed two Roth IRA's, last month and they were transferred and in the new credit union in less than a week. This month I closed my membership account and my Roth IRA savings account that had less that $10 in it from interest. I had my check in 3 days and the money from the Roth IRA savings was in my CD at Navy in less than a week.
It was transferred out of NASU credit union and they were very respectful, helpful and efficient.


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