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USAA closed all my accounts with no explanation due to USAA's error

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they charged you for early termination of an account that they initiated? is that even legal? it can't be. that's WF level abuse.

 

It wasn't an "early termination" fee. It was simply a termination fee. The T&Cs of their Education Savings Accounts say that the fee for closing an account is $20. When I called them to complain about the fee as it was their decision, not mine, to close the account, they responded by saying:

1. You agreed to the terms when you created the account. The T&Cs say that we can close the account at any time for any reason.

2. We can't refund the fee to you because the only way for us to refund it is putting it back into your account and you no longer have an account with us.

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Thank you very much to everyone who responded! I wasn't aware of these complaint channels (OCC, CFPB). Thanks for citing all the grounds for complaint. I'll follow these suggestions and post back the results.

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I filed a complaint with the VA Bureau of Insurance against them years ago. I was struggling financially, and mailed my premium in on the last day of the grace period. VA law says it has to be postmarked within the grace period, and it was. They said I was canceled. Needless to say, they changed their mind. ;) These companies don't want to be dealing with regulators.

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As suggested (thank you!), I filed a complaint against USAA with the CFPB over its closure of my accounts and its refusal to provide a reason.  In my complaint, I pointed out that the "account closures are adverse actions under the Equal Credit Opportunity Act (ECOA) Regulation B and under the Fair Credit Reporting Act (FCRA). As such, USAA is obligated to provide me the reasons why it took the adverse actions. USAA did not fulfill that obligation, and continues to refuse to fulfill it despite my explicit requests for information. I am not aware of anything that I have done that could have caused USAA to want to close my accounts. I have suffered injuries due to USAA’s closure of my accounts, including but not limited to account liquidation fees, time I had to spend transferring accounts and automatic bill payment to other financial institutions, and failure to receive promised bonuses and cash back rewards in USAA credit accounts. Since USAA has refused to provide a reason for their closure of my accounts; in violation of the ECOA, the FCRA, and the Dodd Frank Act; my ability to make informed decisions or to take action to avoid future injury is hindered."

 

USAA replied to my complaint saying that it "may close your account at any time without advance notice" and that it "notified you that it was exercising its right to no longer do banking business with you" and "Due to our continued decision to cease doing business with you, we sent a letter advising you that we had elected to close the Visa."

 

I responded to USAA's response pointing out that:

  • USAA still hasn't stated a specific reason for the closure of my accounts.
  • I never denied that USAA had a right to stop doing business with me.
  • The ECOA and FCRA require USAA to provide the specific reasons for any adverse action such as account closure.

I have gotten no further response from USAA (it's been 23 days), and CFPB provides no avenue for escalation when the company fails to respond substantively.  I believe that my only recourse at this point would be via private action in court.

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22 minutes ago, Tumango said:

As suggested (thank you!), I filed a complaint against USAA with the CFPB over its closure of my accounts and its refusal to provide a reason.  In my complaint, I pointed out that the "account closures are adverse actions under the Equal Credit Opportunity Act (ECOA) Regulation B and under the Fair Credit Reporting Act (FCRA). As such, USAA is obligated to provide me the reasons why it took the adverse actions. USAA did not fulfill that obligation, and continues to refuse to fulfill it despite my explicit requests for information. I am not aware of anything that I have done that could have caused USAA to want to close my accounts. I have suffered injuries due to USAA’s closure of my accounts, including but not limited to account liquidation fees, time I had to spend transferring accounts and automatic bill payment to other financial institutions, and failure to receive promised bonuses and cash back rewards in USAA credit accounts. Since USAA has refused to provide a reason for their closure of my accounts; in violation of the ECOA, the FCRA, and the Dodd Frank Act; my ability to make informed decisions or to take action to avoid future injury is hindered."

 

USAA replied to my complaint saying that it "may close your account at any time without advance notice" and that it "notified you that it was exercising its right to no longer do banking business with you" and "Due to our continued decision to cease doing business with you, we sent a letter advising you that we had elected to close the Visa."

 

I responded to USAA's response pointing out that:

  • USAA still hasn't stated a specific reason for the closure of my accounts.
  • I never denied that USAA had a right to stop doing business with me.
  • The ECOA and FCRA require USAA to provide the specific reasons for any adverse action such as account closure.

I have gotten no further response from USAA (it's been 23 days), and CFPB provides no avenue for escalation when the company fails to respond substantively.  I believe that my only recourse at this point would be via private action in court.

 

I hope you can and do sue them.

 

Sad that the CFPB is nothing but fairy tale.

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I hate USAA as much as anyone, but a few hours spent opening new accounts and setting up autopays at other institutions isn't "substantial harm."  

 

Harm, sure.  Substantial?  An improper foreclosure or losing an arm is substantial.

 

OP also hasn't advanced the case that s/he is a member of a protected class as defined by ECOA, and that being a member of the protected class was the reason for the closures.

 

Also, it's more than a little bit masochistic to open up an account with the same institution that shut down everything else just months prior.

 

The suggestions for recourse in this thread are just grasping at straws.  

 

Once or twice a year there is a thread where someone is indignant about an institution shutting down his or her account without reason, which is a right that's reserved in the account terms.  

 

This is a bilateral right.  Every one of us can close a card or bank account without providing the institution with a reason.  I canceled my Chase Marriott Visa about three weeks ago.  Chase hasn't turned me into a regulatory authority (at least not yet).

 

Make no mistake, I still hope that USAA rots in the fifth pit of the eighth circle of Hell. 

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The suggestions for recourse in this thread are just grasping at straws.  
 
Once or twice a year there is a thread where someone is indignant about an institution shutting down his or her account without reason, which is a right that's reserved in the account terms.


Sometimes people just vent. Very few of who post they were going to sue a creditor or CA actually do.

Make no mistake, I still hope that USAA rots in the fifth pit of the eighth circle of Hell. 


I don’t believe in Hell, but what’s in other four pits and circles?

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11 minutes ago, credit_help said:

Sometimes people just vent. Very few of who post they were going to sue a creditor or CA actually do.

 

I vent here all the time.  But too often people confuse sh!tty with illegal. 

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I vent here all the time. 

I haven’t noticed. :-)

But too often people confuse sh!tty with illegal. 
We need more such people to makeup for people who churn or use rewards. There must be a credit (thermo) dynamics law.

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A decision to stop doing business with a customer IS a specific reason.  It may not be the reason you want, but it IS specific and it IS a reason. 

 

Roll the college fund into an account somewhere else and carry on...

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10 minutes ago, centex said:

A decision to stop doing business with a customer IS a specific reason.  It may not be the reason you want, but it IS specific and it IS a reason. 

 

Roll the college fund into an account somewhere else and carry on...

I wouldn't say it's a specific reason because they could use that reason for every time they close accounts for anybody.

Anyway, unless it's the goal of the OP to sue USAA until the point they need to close up and declare bankruptcy, it may be time to move on.

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1 hour ago, Burgerwars said:

I wouldn't say it's a specific reason because they could use that reason for every time they close accounts for anybody.

Anyway, unless it's the goal of the OP to sue USAA until the point they need to close up and declare bankruptcy, it may be time to move on.

It IS a reason.  NOTHING requires they be specific beyond complying with the TOS in their account agreements.  Once the accounts were open the credit laws regarding denials no longer applied.  The TOS do.  

 

This is NO different than employers simply firing an employee with no reason.  They do not state one to avoid frivolous wrongful termination and discrimination claims.  

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1 hour ago, CreditSucksNot said:

It IS a reason.  NOTHING requires they be specific beyond complying with the TOS in their account agreements.  Once the accounts were open the credit laws regarding denials no longer applied.  The TOS do.  

 

This is NO different than employers simply firing an employee with no reason.  They do not state one to avoid frivolous wrongful termination and discrimination claims.  

I said the reason discussed is not a specific reason.

Anyway, whether or not they give you a reason, there are reasons they cannot use. An obvious example is the bank can't come up with a policy that they're closing accounts for people who are of a certain ethnic group. Whether they tell you that's the reason or not, they can't do that.

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1 hour ago, Burgerwars said:

I said the reason discussed is not a specific reason.

Anyway, whether or not they give you a reason, there are reasons they cannot use. An obvious example is the bank can't come up with a policy that they're closing accounts for people who are of a certain ethnic group. Whether they tell you that's the reason or not, they can't do that.

That's right. OTOH, an employer in an "at will" state (California is one of them which I find rather surprising) can flip a coin to decide whether to fire. Employees can quit for any reason including that they don't like their boss's ethnicity.

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This got me thinking. Years ago I applied for a checking account. I was approved online and I made an opening deposit. A couple days later they closed the account. They would never tell me why. The bank I'm talking about starts with "U.S." but isn't USAA. The bank later on did let me open an account.

Can a bank, to get around giving a customer a denial reason for a credit card or bank account, just open the account then close it the next day? Since you're "already a customer" this looks like a huge loophole.

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6 hours ago, CreditSucksNot said:

It IS a reason.  NOTHING requires they be specific beyond complying with the TOS in their account agreements.  Once the accounts were open the credit laws regarding denials no longer applied.  The TOS do.  

 

This is NO different than employers simply firing an employee with no reason.  They do not state one to avoid frivolous wrongful termination and discrimination claims.  

Just because you use all CAPS doesn't make it true.  Learn to read:

 

Regulation B defines adverse action as:

  • A refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms), and the applicant uses or expressly accepts the credit offered;
  • A termination of an account or an unfavorable change in the terms of an account that does not affect all or substantially all of a class of the creditor’s accounts; or
  • A refusal to increase the amount of credit available to an applicant who has made an application for an increase.

The FCRA incorporates Regulation B (ECOA) by reference. 

 

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6 hours ago, Burgerwars said:

I said the reason discussed is not a specific reason.

Anyway, whether or not they give you a reason, there are reasons they cannot use. An obvious example is the bank can't come up with a policy that they're closing accounts for people who are of a certain ethnic group. Whether they tell you that's the reason or not, they can't do that.

Unless the OP has direct proof that USAA is intentionally closing all accounts of people in a protected class then it is ridiculous to even suggest they are.  The burden of proof would be on the one making the claim of illegal discrimination.  This just makes my point:  by not giving a reason it is merely their choice to terminate the relationship.  Their TOS gives them the right to do it and the consumer consents to those terms when they apply for, open, and use the accounts.  

 

If you want to start a GoFundMe campaign for this losing idea of suing USAA by all means go right ahead but don't look for my donation.

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Who would like to discuss the ambiguity in USAA's account agreement?

 

"Bank may, at any time, in its discretion, close the Account."

 

 

 

 

 

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12 minutes ago, cv91915 said:

Who would like to discuss the ambiguity in USAA's account agreement?

 

"Bank may, at any time, in its discretion, close the Account."

 

 

 

 

 

 

I realize it's confusing for some, but being able to close an account doesn't mean an AA notice isn't required.  

 

There are antibiotics for those types of STDs.

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20 minutes ago, PotO said:

 

I realize it's confusing for some, but being able to close an account doesn't mean an AA notice isn't required.  

 

There are antibiotics for those types of STDs.

OP got a letter.

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On 6/9/2018 at 11:40 PM, Tumango said:

I’ve been a USAA member for 22 years and had generally been happy with USAA. However, USAA has recently exhibited mind-boggling incompetence which resulted in all my accounts being closed due to USAA’s error.

 

One day last year, without warning or explanation, I got a letter in the mail from USAA saying that it was closing all of my accounts in 30 days. Figuring this must be a mistake, I called USAA customer service to ask what was going on. I was told that USAA had decided to stop doing business with me, that the decision is final, and that no reason would be given to me. This meant that my children’s college accounts would be closed, my wife’s and my retirement accounts would be closed, and our checking account and credit card would be closed. I pleaded to customer service supervisors for an explanation, knowing this must be a mistake, but they said they did not have access to the reason for the decision.

 

True to their word, USAA closed all my accounts 30 days later. They even charged me a $20 account termination fee for closing one of the accounts. Most of my cost, though, was the hours I had to spend to move all my accounts and business to new banks and to file paperwork to avoid taxes on the closed education savings accounts.

 

 

1 hour ago, MarvBear said:

I've been commenting on the bank and retirement accounts.

 

The credit card would be covered by the link you posted. 

 

None of the other accounts are credit accounts (with the possible exceptions of overdraft protection on checking or margin account on the investments, although OP hasn't stated that s/he had either).

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If I had a banking account for years in good standing and suddenly the bank decided to close this account then I believe the bank then owes the consumer an "adverse action" notice.

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37 minutes ago, MarvBear said:

If I had a banking account for years in good standing and suddenly the bank decided to close this account then I believe the bank then owes the consumer an "adverse action" notice.

This comes up in every "my bank shut down all of my accounts" thread.  

 

I haven't seen any banking regulations that state that a bank must provide a reason when exercising its discretionary right to close a bank account per the account terms.

 

I would imagine that the investment accounts would be governed by other non-banking regulators since they aren't bank accounts.

 

I'm not saying you're incorrect, but we always end up going in conversational circles when bank accounts are shut down, and this never gets resolved.  :) 

 

For credit accounts the requirements are pretty clear.

 

Also, USAA's charter is unique compared to most of the banks we think of.  Their charter is what allows them to refuse banking services to people who don't meet certain criteria (military affiliation, etc.).  This may be a red herring, but I'm throwing it out there.

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