Consumer complaint received 2020-08-11
Company: CHARLES SCHWAB CORPORATION, THE
State: NY
Product: Payday loan, title loan, or personal loan
Sub-product: Personal line of credit
Issue: Getting a line of credit

Complaint:
Charles Schwab received my application for an Overdraft Credit Line on XX/XX/XXXX. This application was for my checking account that is linked to my brokerage account. On my XX/XX/XXXX statement, Schwab states : Effective XX/XX/XXXX, XXXX.. Deleted the following sentence : " Clients who qualify may be offered an Overdraft Credit Line ( OCL ). '' Added the following in its place : " As of XX/XX/XXXX, Schwab Bank no longer offers or establishes new Overdraft Credit Lines ( OCL ). Any existing OCL will remain in effect subject to the terms of its agreement. '' I contact Charles Schwab on XX/XX/XXXX after submitting my application to confirm receipt. They confirmed my application was received and would be processed within 1-2 business days. I never heard back, and contacted again. At this point I was told the application may take 3-5 business days. I then contacted Schwab again on XX/XX/XXXX via Secure Message, asking for an update. I received a reply that my application was currently in process, and was provided a phone number to call to speak with the XXXX XXXX   team. I called this number on XX/XX/XXXX, and the representative confirmed my application was received and under processing. She stated she noticed there was a hold on my application until XX/XX/XXXX. I was aware that the OCL was ending that date for new customers. I asked the representative " are they holding my application so they can flat out deny me on XX/XX/XXXX? '' She said no, as I already submitted my application before that date. on XX/XX/XXXX I contacted Charles Schwab again. I was told " Ok, I was able to see that the request was submitted originally on XX/XX/XXXX. I do unfortunately have to relay that the application was holding with the pending changes upcoming.. .At the time you submitted - we held every application until we had final clarification if the product was going to continue or no longer be offered. I am sorry that it was not going to be an option for the account ''. 

XXXXharles Schwab, according to their statement and documents, did not remove any Overdraft Credit Line feature or application ability prior to XX/XX/XXXX. Schwab by their own admission on XX/XX/XXXX, has held every application for any Overdraft Credit Line for every person who has applied in the month of XXXX. They have refused to process any application, and on XX/XX/XXXX, they mass denied these applications. Schwab effectively backdated their new terms effective XX/XX/XXXX to an undisclosed date earlier in the year. 
Charles Schwab did not publicly disclose this, it was against their statement documentation, and they lied when I specifically asked if they were planning to hold the application until XX/XX/XXXX and issue a denial. That is exactly what they did. Effective XX/XX/XXXX, Schwab refuses to continue processing this application, and has issued a denial, citing the terms that the OCL has ended on XX/XX/XXXX. I spoke with a supervisor who stated OCL would end later this year for existing customers as well. This is not stated anywhere on Schwab.com. He stated the info was retrieved from an internal site. My most recent statement of XX/XX/XXXX states that existing OCL terms will remain in effect. I would like Schwab to continue processing my application under the terms that were effective prior to XX/XX/XXXX, and apply my application under the existing terms that were publicly available on XX/XX/XXXX. If Schwab truly will remove ALL Overdraft Credit Lines, including existing OCL, by the end of this year, then I would like this information to be disclosed in some public or semi-public manner. My checking statement from last week states preexisting OCL will continue to exist indefinitely. A representative promised it will be removed later this year, while I was complaining. The publicly available information provided means Schwab should continue processing my application. Please disclose on Schwab.com if Schwab will remove existing OCL opened prior to XX/XX/XXXX, in which case I would not expect my application to continue being processed.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation