“Our relationships are built on trust that we build every day through every interaction. Our employees are empowered to do the right thing to ensure they share our customers’ vision for success. We work as a partner to provide financial products and services that make banking safe, simple and convenient…”
From the US Bank About Us Page
Built On Trust…
In February, a number of U.S. Bank (USB) customers/homeowners who sent important loan-related inquiries and documents to the official mailing address provided by USB were horrified to find their materials returned to their home address:
- “Box Closed No Order—Eagan”
- “Return to Sender Attempted—Not Known Unable to Forward.”
Many of these communications were urgent; some containing inquiries for loan modifications or documents to prevent property foreclosures.
Having failed to respond to these communications, the procedures of which customers had followed according to the bank’s instruction, US Bank had potentially violated a legal protocol, stripping their borrowers of rights guaranteed by federal law.
It turns out that US Bank’s PO Box in Eagan, Minnesota had been closed for approximately five weeks.
The reason: they refused to pay the $50 rental fee.
For US Bank, the negative consequences were small: their PO Box had been closed, and all they had to do to fix the situation was to pay USPS its $50 to reopen it (which they did on March 8).
For homeowners, the negative consequences might have been disastrous: the loss of a home, extreme financial hardship; the consequences of which would likely have gone beyond the financial--as such a strain could easily have torn households apart.
For the seventh largest bank in the nation, an institution that made billions of dollars just over the last year, such a refusal seems inexcusable.
At the least, it reveals to us how USB views its customers, and how seriously they take their rhetoric of “trust” and “doing the right thing” when such promises are put to the reality test.
Doing the Right Thing…
USB paid its CEO, Andrew J. Cecere, Jr., more than $20,000,000 since he took the helm in 2017.
Since then, the bank generated billions in profits, a windfall partly due to the Trump tax cuts.
From a business standpoint, “doing the right thing” might have been considered something of an understatement, saving one crucial factor: they failed to hold up their end of the bargain with many of their customers.
By refusing to fork over $50 for a PO Box rental fee, they put many of their home owning customers at risk, the consequences of which could have been quite drastic.
Yet through it all, the notion of accountability may not have been significant enough to prevent their CEO, executives, and management from earning a large sum for “a job well done.”
Sharing the Customer’s Vision for Success...
Not quite the “vision for success” that USB might have expected of the affected homeowners, the affected customers filed a federal class action suit via DannLaw and Zimmerman Law Office, P.C. of Chicago on March 15, 2019.
The suit was filed in the United States District Court Northern District of Ohio Eastern Division in Cleveland - Case# 1:19-cv-00538-DAP.
According to Dann (DannLaw):
- “I’m dismayed but not surprised by USB’s disregard for the law.”
- “Company employees consistently refused to provide documents they are legally required to produce and asserted spurious reasons for doing so.”
- “It’s clear USB’s goal is to obfuscate and delay so they can pile on late fees and other charges for as long as possible.”
- “Unfortunately, it’s a common practice in the mortgage servicing industry.”
- USB’s just taken it to another level. I guess they thought closing down the P.O. box would mean they wouldn’t even have to send denial letters because they never received the requests.
- “We think they’re dead wrong and we believe the Court will agree with us.”
Services That Make Banking Safe...
U.S. Bank is a major financial institution. The purpose of saying this is not to point out the obvious but to point out the implications this may have on the rest of the banking industry.
This case illustrates a potential violation of federal law. It illustrates just one case, potentially among many others that have not been exposed (as Dann states, such actions may be “common practice” in the industry).
But it does not illustrate the legally-sanctioned power that banks have over your money--how they can legally freeze and confiscate your funds in times of crisis and insolvency.
During times of financial crisis, there are no “services that make banking safe.”
And although it’s nearly impossible not to have some sort of bank account, you should at least take a few proactive steps to protect your money.
Click here for GSI Exchange’s Bank Failure Survival Guide to learn how to hedge your money against a system that sees profits first and customers last.