Consumer complaint received 2015-08-17
Company: HSBC NORTH AMERICA HOLDINGS INC.
State: NY
Product: Bank account or service
Sub-product: Checking account
Issue: Deposits and withdrawals

Complaint:
I request that the CFPB investigate HSBC 's unlawful restraint of exempt funds in my account and charging of an illegal {$100.00} fee in violation of XXXX Exempt Income Protection Act ( EIPA ). HSBC 's illegal acts have caused me significant hardship. I am currently unemployed and do not have a permanent residence. Because of my difficult financial situation, I rely almost entirely on unemployment income deposited to my account to make ends meet. Over a XXXX month period, HSBC repeatedly refused to release the exempt funds in my account despite my concerted efforts. I had no money at all during this time and had to rely on friends and family to support me. 
On or around XXXX XXXX, 2015, HSBC received a restraining notice against my account and levied a {$100.00} fee. ( Exhibit 1 ) The restraining notice was issued pursuant to XXXX law, in enforcement of a XXXX judgment. ( Exhibit 2 XXXX XXXX law provides that a restraining notice shall not apply to a bank account that contains less than a statutorily protected minimum amount ( currently {$2100.00} XXXX. If the account contains less than {$2100.00}, the restraining notice is deemed void. XXXX XXXX XXXX ( i ). At the time of the restraint, I had only {$270.00} in my account, far below the statutory minimum of {$2100.00}. Therefore, the restraining notice was void and my account never should have been restrained. 
Upon unlawfully restraining the account, HSBC failed to send me notice and an exemption claim form. XXXX XXXX XXXX ( b ) ( XXXX ). The next day, XXXX XXXX, {$490.00} in unemployment benefits were directly deposited to my account and restrained, even though unemployment benefits are exempt from restraint by law. ( Exhibit 1 ). Shortly thereafter, I attempted to make cash withdrawal from an HSBC branch XXXX, and was only then informed for the first time that the account was frozen. When I complained that my account contained exempt funds, the bank representative told me that there was nothing she could do. 
On XXXX XXXX, 2015, with the help of an advocate from New Economy Project, I reached out to the HSBC XXXX Department and was wrongly told by a representative that the restraint was not governed by XXXX law because the account was opened XXXX. The representative proceeded to place me on hold for over one hour and told me that an attorney from HSBC would contact me during the week, but no attorney ever contacted me. On XXXX XXXX, 2015, I reached out to HSBC a second time and was told by a representative to call the following Monday as no one in their Legal Department was available. The following Monday, XXXX XXXX, 2015, I called HSBC for a third time and was not allowed to speak to a bank attorney but was told once more that XXXX law did not apply. On XXXX XXXX, 2015, an attorney from New Economy Project spoke directly with the HSBC XXXX Department and explained that EIPA applies to my account and that the restraint was void, but once again HSBC refused to release the account. 
On XXXX XXXX, 2015, New Economy Project reached out to the creditor 's attorney who agreed that the account should not have been restrained and offered to request that HSBC release the account. The creditor 's attorney informed us that she had received a legal opinion letter from HSBC reiterating an incorrect legal position. HSBC did not share the opinion letter with me or New Economy Project, but apparently the letter stated that EIPA did not apply because the account was opened XXXX. There is no basis in XXXX law for this opinion. To the contrary, the law is quite clear that a XXXX restraining notice does not apply to bank accounts containing less than {$2100.00}, and there is no geographic limitation on this protection. XXXX XXXX XXXX ( i ). 
On XXXX XXXX, 2015, more than XXXX months after the unlawful restraint, HSBC finally released my account, but HSBC still has not refunded the {$100.00} fee.

Company response to consumer: Closed with explanation