Advertising Disclosure

Customers...Not Much Of The Bank...No Longer A Customer

IGR
  |     |   573 posts since 2020

The Disclosure: After many years of being loyal Customer of Customers Bank, the letter was received from Digital Banking that CB "has determined that it is no longer able to maintain a deposit relationship"

Subject: CB Max and Legacy HYDS Account that predated CB to MaxMyInterest relationship. Both Accounts were Joint, but only one owner received notification and was instructed to "Discontinue" ALL Credit and Debit transactions on behalf of ALL Owners.

Habitually, no hint of the explanation on the nature of "determination" was given.

And thought over the years I kept at CB above average Deposits amounts and conducted above average number of ACH Transactions There, I had to do digging on my own.

What was discovered is very Discouraging.

Recently, Customers Bank was targeted by Class Action Lawsuits and Enforcement actions by Federal and State Banking Regulators.

There is very damning allegations that Customers Bank wasn't acting as Community Bank but rather as willing extension of various FinTechs; T and Green Mobiles, Six Trees Capital LLC(MaxMyInterest), Raisin GmbH(Raisin) to name a few, and in the process violated every possible Banking Regulation and Risk Management practice... none of that information is mentioned on CB Press Releases, but publicly available as https://www.federalreserve.gov/newsevents/pressreleases/files/enf20240808a1.pdf

https://www.businesswire.com/news/home/20241210240826/en/INVESTOR-ALERT-Law-Offices-of-Howard-G.-Smi....

https://www.globenewswire.com/news-release/2024/12/03/2991018/10782/en/Gainey-McKenna-Egleston-Annou....

Effectively Customers Bank tried to Blame its CFO, but relented and bought her off.

The Credit goes to Jay S. Sidhu who ruled the Bank the maharaja style, supervising Jay S. Sidhu Executive Officer as Jay S. Sidhu Executive Chairman!

Personally, I incurred no Financial damages because i had a back up to CB Banking Services and could have no legal recourse against CB actions to recover administrative losses.

I only post this as a gratitude to the Community.

When the Bank smells like a Fintech, it isn't the Bank it is a Fintech.

Be prepared to part with it, even if this is your favorite.

  Post a comment
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fdic
  |     |   248 posts since 2022
Sorry to hear that. When did you receive the letter? I hate this part where banks can do anything they want whenever they want. A lot of folks have been s$rewed over by this.
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midas89
  |     |   959 posts since 2017
Thank you, IGR, for sharing your experience with Customers Bank. I second fdic's expression of sorry that happened to you. I really wish it was mandated that if banks decide to close someone's account or accounts, they must divulge the exact reason why. If the Consumer Financial Protection Bureau would solicit Congress for this on our behalf, I think many would be appreciative.

So, from the articles you linked, money laundering seems like one of the top things Customers Bank might have allowed. So perhaps if people do above average or more of ACH transactions, Customers Bank might pull the plug as a just-in-case, even if the account holder isn't doing any money laundering whatsoever.

Sadly, no one would ever know how many ACH transactions would trigger the bank to think there might be money laundering. I am just speculating that this might be the reason, but of course, I have no idea. Thank you again for sharing your experience with the Community.
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QED
  |     |   366 posts since 2013
I agree. Fintechs should be avoided right across the board.
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IGR
  |     |   573 posts since 2020
It is not a big deal.
Just minor inconvenience not related to personal experience
It is about the cost of doing personal due diligence and risk management... even and especially when it comes to "favorite" financial institution. I've done that and I am fine... not s$rewed
The purpose of the post is to bring to light much more complex issue.

How personally and individually identify, Customers Bank as an example, that the Bank isn't much of The Bank in conventional understanding of Banking Services.
How to recognize that the Bank is just a shell, allowing various unregulated Fintechs to run shadow Banking Business under the cover of Customer Bank Banking License
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milty
  |     |   1,471 posts since 2018
Are you saying Customers Bank is a fintech?
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fdic
  |     |   248 posts since 2022
The worst part of US banking is that no one wants to offer decent money movement services on the personal banking side. No bank has adopted that new Fed thing. They are all happy earning free interest with super slow ACH or earning fees with wires. I have been to a few developing countries and even they offer instant money transfers with 0 to miniscule fees. Here they are happily $crewing their customers, specially garbage banks like Marcus and Bread where it is up to their whim if they will allow a particular ACH or Wire or not, and even worse lock up your accounts for even trying that.

Customers is the only bank we could find that offer decent same day ACH. To be honest, I am not even that familiar with rest of their business. I only kept some savings with them when they were briefly the rate leader. Other than that, I keep a few k here in case I have to send it another bank or my primary checking in a hurry
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vlad
  |     |   287 posts since 2020
Hopefully IGR could resolve the problem via his local branch manager.
Customers bank dealt honestly with me through many years.
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IGR
  |     |   573 posts since 2020
@vlad, you still don't get it?
IGR has no issue that needs to be resolved.
Local Branch Manager, IGR had very good relationship with over the years, is powerless and claims to have no knowledge because the Action is Corporate.

IGR would not make Personal experience Public unless IGR recognizes Public implications of it.
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vlad
  |     |   287 posts since 2020
Sudden closing accounts in such a hub bank, without warning the customer, would certainly create much problems for anyone.
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IGR
  |     |   573 posts since 2020
All right...
my fault to explain properly.
The letter Received was a Warning of kind.
"As a curtesy, we will delay the closing of your account(s) for 30 days from the date of this latter..." Joint owner received no letter???!
Never the less, my loyalty to Financial Service Providers is limited in scope and I do hedge my Banking Relationships.
Because of IGR Personal Policy everything was in place many days before the "date of the letter " and it took me 30 minutes to reroute Deposit Strategy with Zero immediate or near term loss
I will have to be making further adjustments to reflect the loss of NBD ACH.

The story of Customers Bank and the predicament of IGR was posted as Warning to Others
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fdic
  |     |   248 posts since 2022
May I ask what is NBD?
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midas89
  |     |   959 posts since 2017
@fdic If I had to guess, I would guess that NBD is Next Business Day ACH. (At first I thought it might be Northern Bank Direct.)
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IGR
  |     |   573 posts since 2020
Yep, the second guess is right on the money.
There is very little use of Northern Bank Direct and ACH in the same sentence
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vlad
  |     |   287 posts since 2020
@IGR: Your branch manager certainly knows if they banned you personally, or just these two your accounts. In the latter case, you still may have other CB accounts and enjoy the same day ACHs.
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IGR
  |     |   573 posts since 2020
@vlad, you still don't get it?
IGR has no issue that needs to be resolved.

Time and effort was involved to insure that no single entity or single action creates an issue.
It was minor setback, the solution was in place, the solution was implemented

Yes, IGR was taking full advantage of Next Business Day ACH, but IGR designed and implemented business continuity solution to avoid the reliance on single point of failure of Service and Provider.

I am not sure that I am qualified to explain...
I am not sure IGR can appreciate the claim of "certainty" when I personally spoke with Local Branch.
I am not sure IGR can appreciate the concept of former and latter where latter is just a record that cannot possibly be banned,
The record that is a property of the Bank and IGR is the person with the ownership rights to the Funds assigned to that record(aka Deposit).

The Law of this Land is that, unless specifically Legislated, the Business like a Marriage is at will.
Once the will runs out and the relationship is dissolved, the separated parties must move on separately.

There, IGR made an attempt to ensure that if and when @vlad receives the notice of the marriage/business relationship dissolution, he/she/it would not be ruined financially.
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vlad
  |     |   287 posts since 2020
@IGR: It would be useful just to post here a few best alternatives to the CB Same Day ACHs, if you know such.
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midas89
  |     |   959 posts since 2017
@vlad For so long I have searched far and wide for any other bank besides CB that offers same-day ACH the way CB does with high limits, and have only read about Fidelity. I, too, welcome anyone who has found one to share the info.

I myself have never had a Fidelity account, and have not inquired if the following comment I am pasting in below regarding Fidelity posted elsewhere on Dec. 31, 2024 would apply to everyone, or is 100% accurate:

Pros:

Same-day ACH transfers until at least 1100 Pacific Time, sometimes as late as 1300 PT
Push out 100k/day, pull in 250k/day, no weekly or monthly limits
Free domestic wires, receiving AND sending, up to 1M/day
40+ simultaneous connected banks supported (probably unlimited)
Check writing upon request, with free check printing
Debit card upon request

Cons:

Some people have experienced very long hold times on pulled funds. I have never had a hold of more than 3-4 days, and not more than 1 day since the first year of my account.
Recently they introduced Finicity, a Plaid-like service for linking external banks, but with a MUCH smaller roster of supported institutions. In theory, you can still decline to use Finicity and use the trial deposit method. However, three times lately this has returned the following error message: “We tried to link your bank using your account and routing number, but need more information to verify your account.” And apparently, the only way to give them the information they want is… logging in with Finicity.
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IGR
  |     |   573 posts since 2020
Certainly "useful", "available" is None to my knowledge.
There is no such thing as "Same Day ACH".
For Same Day Transfer there are FED Wire and Zelle at the disposal with all the limitations and aggravations attached. ACH isn't about the speed, it is about C(Clearing) and liability.
CB was offering virtually unlimited and in most use cases sufficient ACH Services at the cost of foregoing Banking Regulations and Risk Management. Once Bank Regulators and Lawyers smelled the problems, CB started pruning Customers, next logical step CB will curtail ACH services to catch up with ACH Regulations.
There are multitude of NBD ACHs, they all come with limitations making them less or even UN useful.
You can consult with DoC on all available options.
"Best alternatives" comes out of specifics of Personal Requirements and Toleration.
Sorry, not licensed to advise you on that.
Personally, I am exploring on Private Banking and Brokerage Sweep alternatives.
So far to no avail to my Individual Requirements.
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midas89
  |     |   959 posts since 2017
@IGR Respectfully, there is same-day ACH. Same-day transfers processed through the Automated Clearing House. Multiple sites will confirm this, including this one at Fifth Third Bank:


"In order to facilitate same-day funds settlement in the ACH network, the National Automated Clearing House Association (NACHA) introduced the first phase of new rules late last year. As a result, instead of settling ACH transactions in one to two days, the option of settling funds within 24 hours is now available. A “same day fee” is included with each Same Day ACH transaction to cover the costs associated with the faster settlement process."

https://www.53.com/content/fifth-third/en/financial-insights/business/treasury-cash-flow/difference-...
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vlad
  |     |   287 posts since 2020
@IGR: How do you know that "CB started pruning Customers"? Did your branch manager tell you that CB "pruned" many others with you?
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IGR
  |     |   573 posts since 2020
@midas89.
Respectfully back. There is NO Same Day ACH in context of Bank-to-Bank Transfers.
What you referring as Same Day ACH is NACHA ruling designed to Clear thru Federal Reserve and facilitate ACH PAYMENTS such as Direct Deposits. 5 days rule and Requirement for ODFI to conduct Fraud Monitoring is still in effect. Federal Wire is cleared in most aspects and irreversible in most instances because it is processed as one-way PAYMENT, not a bilateral agreement to exchange Funds.
I am not qualified to go further and I don't believe DA format is suitable for such discussion.
The only "site" that can reliably confirm or dismiss the interpretation is NACHA or Federal Reserve.
I prefer not to go by "site" confirmations, although access to Original requires professional credentials to access.
I don't need "site" confirmations. Chase offers to me REALTIME TRANSFER as an option to send ACH PAYMENT from Business Account.

Anyway, in the context of Risk Management, Same Day ACH and Plaid are the red flags of the same kind.
Some get concerned because they couldn't get link accounts via direct trial deposits.
IGR got concerned because he/she/it was forced to share external access credentials with third party.
Third party which is likely Unregulated and Registered in some shady London's neighborhood as very Limited Liability Corporation. CB cut the cost and employed Fintechs such as Plaid, Max an Raisin, IGR IS glad it didn't pay the price.
I am here to inform, not to influence.

@vlad
If "How" is more important to What, you'll be bound for self-study.
NO, she didn't!! She is the professional who serves her Employer first and foremost, and IGR is not fool to be asking stupid questions.
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vlad
  |     |   287 posts since 2020
@IGR: "If you have a fountain, plug it"
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midas89
  |     |   959 posts since 2017
@IGR I initiated a push at Customers Bank before 9AM Eastern Time. That money showed up at my external bank account where I got notice from the external bank at 1pm my time that the transfer arrived, and I confirmed the money is now in my available balance to use immediately. It was not a wire transfer. Are you saying that the money is not a bank-to-bank transfer and did not go through the Automated Cleaning House even though it is called an ACH Transfer? And again, it arrived Same-Day. So, isn't this a bank-to-bank "Same-Day ACH"?
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IGR
  |     |   573 posts since 2020
@midas89.
It is not easy to explain, unless there is a familiarity with Backend Banking Operations and ETNs.
It does look to you as Same Day and lets call it same Day, technically it is not
In reality, RDFI as a matter of Policy, can make funds available to you even before they arrived and transaction is settled, just after ODFI sends notification that transfer is pending.
RDFI has nor responsibility beyond receiving Funds and updating your Account Record, because most Banks will do balk updates at night, some RDFI's may,(not obliged) to provide you with free Advance in leu of pending incoming transfer.
If you familiar with Risk Management and read FED Docket you'll realize that Customers is playing dangerous game with your funds.
I am not going into details of how Money Laundering occurs, but imagine what happens when Customers, though Required by NACHA to fulfil its role as ODFI, skips the expense of Compliance and pushes your Money out without proper validation.

Now imagine that by negligence or intent(with no details how it could happen) the receiving Account Number is wrong by one digit and belongs to IGR.
At 1pm IGR receives notification that Funds deposited to IGR's Account and Available for withdrawal.
At 1:03pm the withdrawal is initiated...
Even if Customers is alerted and as ODFI notifies receiving institution that the mistake was made and it wants to reverse the transfer, RDFI has no obligation to return funds back.
@midas89 spends half of the lifetime tracking his/her/its Funds across the Globe. the remaining half @midas89 spends suing banks and IGR trying to claw Funds back.
if the Receiving Bank is a Customers kind @midas89 will never find the trace of Funds.
I know @midas89 LIKES "Same Day", but I also understand and Banking Regulators tend to agree with IGR that @midas89 NEEDS Safety, Security and Integrity of every Banking Transaction.

On that the fountain is plugged and the the podium is yielded to @vlad
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