The problem faced by the Mannings with Harleysville National Bank (now First Niagara Bank), which I wrote about in Sunday's Consumer 10.0 column and blogged about yesterday here, raises lots of questions. Today I'm going to focus on two of the most basic: How can you tell if your bank is giving you bum information, and what to do if you think something has gone wrong.
If that happens, you face a couple fundamental problems. The first is that the rules are often complicated - as the Mannings found out when everyone told them they were out of luck, and out $5,200, when the actual federal rules say otherwise. The second is that because of our fragmented regulatory system, it's often not clear where to turn for information or to file a complaint.
Unless and until Congress passes President Obama's proposal for a Consumer Financial Protection Agency, you're stuck with the current alphabet soup of regulators: the FRB, the OCC, the FDIC, and so on till your head spins. But since the Federal Reserve writes the rules for all banks (even though it regulates only a fraction of them), it's as good a place as any to start. Though they're sometimes hard to find, the Fed's consumer-information Web pages do answer some frequently asked questions.
One of my favorites is a series titled: "Can a bank really ... ?" It asks whether your bank can legally:
- post withdrawals from my account from the largest dollar amount to the smallest to get more overdraft fees?
- wait to give me access to the money that I deposit?
- refuse to cash my check?
- increase the rate or add fees to my credit card account?
- change the terms on my deposit account?
- ask me for additional information when I make a large deposit or withdrawal?
- keep the rate on my mortgage loan the same even if the Fed lowers the interest rate?
- send me a notice stating that I'm denied credit even though I did not apply for a loan?
- not give me back my checks?
- require me to have photo identification (ID) to get a loan or open a deposit account?
- require an escrow account for my home loan?