Featured Savings Rates
Featured Accounts
  3. US Bank Screws Its Existing IRA CD Customers With Fee Change In Mid-Term

US Bank Screws Its Existing IRA CD Customers With Fee Change In Mid-Term

TJJackson
TJJackson   |     |   13 posts since 2011

Minnesota-based US Bank has decided to screw its existing IRA CD customers hard.

Previously, one could open an IRA CD with no annual fee as long as the amount was 5k (the current annual max) or more.  If you opened one with a lower principal amount, you paid a 10 dollar annual fee

A letter dated 5/10/2011 just went out indicating that the fees were changing more or less immediately to 30 dollars a year (a 300% increase) and the limit to waive the fee was raised to 25k.  The letter includes an extremely helpful suggestion that one deposit more money at US Bank to avoid the fee

So I guess the greedy bankers at US Bank forgot that one can only deposit 5k a year into an IRA account.  I guess they also forget that you cant deposit ANYTHING into a CD. Or maybe more accurately, they haven't forgotten - they ran a bait and switch scheme on a LOT of customers and will be collecting a ton of money via this fee.

When I called to ask how it was legal that they change terms on a existing CD (in my case, 2 years into a 5 year term) the helpful CSR indicated that the language inthe contract allowed them to raise the fee to any amount they desired at any time.  I then asked why they just didn't raise the fee to 5k or 10k a year and take it all, and her reply was that they were permitted by the contract to do so.

So my choices

1) take a kick to the teeth and pay 30 dollars a year because even if I had the money to do so, i cant deposit more than 5k this year into an IRA and 5k more will not get me to the magical 25k tier, which could well like the carrot in front of the doneky change again before I get there

2) Take a much bigger kick in the teeth by withdrawing my money, paying the huge early withdrawal penalty (which this greedy bank then gets) AND then also pay the taxes on the money or pay their 100 dollar roll-to-another-bank fee

I could understand applying said fee changes to NEW accounts, and had they been in place when I was shopping for a IRA CD, I would have gone elsewhere

I do NOT understand applying said fee changes to existing accounts, particularly CDs that are locked in for years

I recommend everyone keep their money away from this thief-in-bank's-clothing

I recommend class action lawyers take a good look at this one - I would bet good money there are enough of us to form a valid class.

-TJ-

  Post a comment
15


TJJackson
TJJackson   |     |   13 posts since 2011
Since my wife and I each made the mistake of trusting these thieves, I am actually on the hook twice - 60 dollars a year, 30 for each of us.
Reply
3
me1004
me1004   |     |   578 posts since 2010
I think you will be interested in this previous thread on this topic here.
Reply
2
jamesstewart
jamesstewart   |     |   20 posts since 2011
I thought that my IRA CD was protected with FDIC insurance, but apparently a failing or greedy bank can just raise fees at will and confiscate principal and earned interest on existing CD's. This also gives banks to opportunity to offer sham interest rates just to bait and take back funds.


This is the thanks the taxpayers get for keeping large banks in business the last few years. Caveat Emptor!


Should I hope that they won't raise the fees again or cut my losses and withdraw my accounts now? Fool me once...
Reply
2
CraigPD
CraigPD   |     |   94 posts since 2010
Should I hope that they won't raise the fees again or cut my losses and withdraw my accounts now? Fool me once...

Vote with your feet or expect more of the same.  Shadier, better-capitalized operations probably did due-diligence using behavior analysis and statistical cost/benefit outcome modeling.  Prove the BS research wrong and head for the exit ASAP. While class action may be an option even EWP or a $100 rollover fee is a small price to exercise principle.  It may even be recoverable in addition to punitive damages when the SHTF.
Reply
2
TJJackson
TJJackson   |     |   13 posts since 2011
I am already in the process of arranging to move all my funds not in CDs out of this theiving bank's hands

The total EWP to close out the 4 CDs is over 10% of my principal, so the 30 (x2=60) dollar kick to the teeth bloodies me far less than the EWP.  To add to my dismay, none of them mature for at least 3 years, some coming due nearly 5 years from now
Reply
2
Inforay
Inforay   |     |   17 posts since 2010
I posted this on ComplaintsBoard.com where others have had the same complaint.  Someone suggested sending a complaint to, Office of the Currency 1114 Avenue of the Americas, Suite 3900 New York, NY 19936.  I have used the web site-www.helpwithmybank.gov.  They have a form to fill out and submit on-line.  I hope others reading this will also send a complaint and maybe we can hope for the best.  My question is what is to prevent this Bank from charging a $100 fee next year, once they realize they can get away with this?  That way they won't have to pay any interest to the depositors or even worse take money out of our principal. 
Reply
3
BobSulli
BobSulli   |     |   1 posts since 2011
Please contact me at my msnbc e-mail address, Bob dot Sullivan at msnbc dot com.  Thanks
Reply
2
Inforay
Inforay   |     |   17 posts since 2010
In connection with the letters we received from U.S. Bank regarding the "maintenance fee" of $30 for our IRA accounts, I would like to direct interested readers to the U.S. Bank website at:

https://tools.usbank.com/ICToolsWeb/productComparison.html?productCode=SAV,REA

It sets out the monthly maintenance fees for CDs and Retirement Money Market Accounts as being $0 and this is as of 6/8/2011.  Click on the buttons and it clearly says that there is no fee associated with those accounts.  Only the Health Savings Account shows a maintenance fee of $2.50 per month, which is what we folks who have IRA CD accounts are being charged ($30 annually).  Please print this out before they change it.

If neither the CD nor the retirement money market account (which requires more maintenance since people are contributing monthly), have any fees, why are we, who have an IRA CD which pays interest annually and which does not even provide statements, have a maintenance fee?  This is clearly a bait and switch tactic where the website and the representative who opens your account tells you one thing, and then after you have opened the account, you are suddenly hit with a fee.

Reply
2
TJJackson
TJJackson   |     |   13 posts since 2011
http://redtape.msnbc.msn.com/_news/2011/06/09/6821261-new-usbank-ira-fee-can-eat-most-of-savers-interest
Reply
2