Consumer complaint received 2016-12-22
Company: U.S. BANCORP
State: WI
Product: Bank account or service
Sub-product: (CD) Certificate of deposit
Issue: Account opening, closing, or management

Complaint:
XXXX XXXX US Bank XXXX XXXX XXXX XXXX WI XXXX Dear XXXX : Please accept this letter as written direction to immediately redeem certificates XXXX and XXXX which were issued to XXXX XXXX XXXX by US Bank on XXXX XXXX, XXXX. 

I would also like to take this opportunity to express some concerns about my experience with US Bank : As we discussed, the renewal notice sent by US Bank had been unknowingly missed by our staff during a period of transition causing the certificates to auto-renew on XXXX XXXX, XXXX. As soon as the oversight was discovered on XXXX XXXX, XXXX, a call was made to US Bank. During the call, I was informed our {$240000.00} invested in 59-month certificates had been renewed by US Bank at a rate of just 0.50 %. 

As a reference, this new rate was nearly 2 % less than our original certificate rate of 2.47 %, multiple times below currently-offered market rates for similar term certificates elsewhere, and also multiple times below US Bank 's own currently-offered CD Rate for a new 59-month certificate. Ultimately, we estimate the auto-renewal with US Bank would cost us about {$20000.00} in lost interest income over the 59 months when compared to going market rates for this type of certificate. 

Both during the call on XXXX XXXX, XXXX, and multiple times in person at the XXXX, WI branch where the certificates were issued, I voiced my concerns with US Bank about the unfair, unethical, and deceptive nature of excessively dropping auto-renewal rates to take advantage of unsuspecting customers. Despite my concerns, US Bank was unwilling to negotiate the renewal rate or the early withdrawal penalty ( approximately {$7500.00} ) to allow us to move the certificates elsewhere. Additionally, during my call on XXXX XXXX, my request to not have the certificate auto-renew upon future maturities was also denied. 

I will acknowledge our error in not catching the renewal during the 10-day grace period following maturity, and I will also accept the amount of the early withdrawal penalty as it was disclosed on the back of our certificate forms at the time of issuance. 

My concern, however, is US Bank 's intentional practice of dropping certificate renewal rates to unreasonably low levels below market rates ( and below US Bank 's own offered rates for same-term certificates ). This, in combination with establishing unusually high early withdrawal penalties and not allowing customers to remove the auto-renewal clause, is intended to take advantage of unaware customers. It forces them to either accept huge losses due to the incredulously low rates they will be paid on their renewals over the lengthy term of the certificate, or to pay a large sum of money up-front to US Bank for early withdrawal in order to escape the mistreatment. In either scenario, the customer incurs significant losses, and US Bank reaps significant unmerited income. 

We agreed to the higher-than-usual early withdrawal penalty terms because we had no intention of redeeming early on our own accord. It is nauseating and disappointing to know any financial institution would defy the trust of their customer by unfairly pricing their renewal to basically strong-arm them into paying a hefty early withdrawal penalty. 

I feel US Bank has ingrained a business model which intentionally sets auto-renewal rates on certificates at predatory, unethical and deceptively low rates to unfairly exploit their customers. A copy of this letter is therefore being sent to both the Federal Deposit Insurance Corporation ( FDIC ) and the Consumer Financial Protection Bureau ( CFPB ) to notify them of the issue, in hopes they can protect innocent consumers going forward and/or compensate consumers who have already suffered losses because of this predatory business practice by US Bank. 

Thank you for your time and attention to this matter.

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