Consumer complaint received 2024-12-05
Product: Money transfer, virtual currency, or money service — Domestic (US) money transfer
Issue: Confusing or missing disclosures — 
Company: BANK OF AMERICA, NATIONAL ASSOCIATION (MI)

Consumer Financial Protection Bureau ( CFPB ) Complaint Complainant Information : Name : XXXX XXXX XXXX XXXX Contact Information : [ Your contact details ] Complaint Date : XX/XX/year> Date of Incident : XX/XX/year>, XXXX XXXX Company Information : Name : Bank of America ( BOA ) Location : XXXXXXXX XXXX XXXXXXXX, XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX Employee Involved : XXXX ( Customer Service Representative, In Person ), XXXX ( Customer Service Manager for Depository Department, on Speakerphone ) Subject of Complaint : Ageism, Incompetence, and Violation of Consumer Rights by Bank of America Complaint Details : On XX/XX/year>, I visited the Bank of America branch at XXXX XXXX XXXX XXXXXXXX XXXX XXXX XXXX XXXXXXXX, and interacted with XXXX, a Customer Service Representative, in person. I was also on the phone with XXXX, the Customer Service Manager for the Depository Department, and XXXX was present during the conversation through speakerphone. My request involved clarification regarding the processing of the following items : The deposit of a Fiscal Service Form 1522, assigning Bank of America for deposit into my trust account, Cashing a Sight Draft Bill of Exchange, Registering my trust account with the Federal Reserve to access financial services, including utilizing the FedWindow Discount program. 
Despite spending 1 hour and 35 minutes on the phone, the response I received was unsatisfactory. XXXX expressed complete unfamiliarity with the Fiscal Service Form 1522 and denied the request to deposit the form into my trust account. XXXX, while on the phone, was unable to provide any assistance and suggested that I call the Fiscal Treasury directly instead of assisting me in processing my request. XXXX, present in person at the branch, did not take any initiative to resolve the issue, instead suggesting that I was being misled with the information I was presenting, assumed I was missing information yet admitted he has never used a Fiscal Service Form 1522 which undermined my credibility. 

This situation raises several concerns : Ageism and Disrespectful Treatment : The manner in which I was treated by both XXXX and XXXX was dismissive, with XXXX suggesting that I was being misled and offering no meaningful assistance. This behavior was rushed and unprofessional, potentially rooted in ageism or a lack of respect for my inquiries. I was made to feel as though I was not knowledgeable or valid in my request, despite having a legitimate inquiry regarding my financial rights and transactions. 

Incompetence and Failure to Assist : XXXX and XXXXXXXX XXXX inability to understand and process the Fiscal Service Form 1522, Sight Draft Bills of Exchange, and the registration of my trust account with the Federal Reserve constitutes incompetence in performing basic banking services. As a financial institution, Bank of America is obligated to handle financial instruments like the Fiscal Service Form 1522 and provide clarity on financial matters related to trust accounts and Federal Reserve services. The refusal to assist me and the suggestion to call the Fiscal Treasury is not only unprofessional but also represents a failure to properly serve a customer. 

Violation of UCC, CFR, and MI Laws : Bank of Americas failure to recognize and process my request for the Fiscal Service Form 1522 and other related financial actions constitutes a violation of multiple laws, including the Uniform Commercial Code ( UCC ), which governs financial transactions and trust agreements. The failure to facilitate this process also breaches the Code of Federal Regulations ( CFR ) that mandates financial institutions to properly process requests from customers, including those involving Treasury Forms and financial instruments. 

Impediment to Progress and Grounds for Equity Damages : The actions of Bank of America not only delayed my financial progress but also impeded my ability to access essential financial services. This delay and obstruction can result in significant financial damages, as I was unable to deposit the Fiscal Service Form 1522, cash the Sight Draft Bill of Exchange, or register my trust account with the Federal Reserve, hindering my access to available financial services. 

Additional Laws and Regulations Granting Banks the Authority to Cash Bills of Exchange ( BOE ) and Process Fiscal Service Form 1522 for Deposit, and Financial Benefits to the Bank I. Uniform Commercial Code ( UCC ) A. UCC Article 3 : Negotiable Instruments UCC 3-202 - Transfer of Instrument This section allows financial institutions to transfer negotiable instruments, such as Bills of Exchange ( BOEs ), in accordance with the rules for negotiability and proper endorsement. By refusing to cash the BOE, Bank of America has failed to fulfill its obligation under this provision, which allows financial institutions to complete transactions with valid negotiable instruments. 

UCC 3-501 - Presentment for Payment A Bill of Exchange must be presented to the drawee ( the bank ) for payment. When a valid negotiable instrument like the BOE is presented for deposit, banks must honor the presentment if it is properly endorsed. This provision reinforces that the bank is legally obligated to cash or deposit such instruments unless there is a legitimate legal issue with the instrument. 

UCC 3-602 - Discharge of Obligation by Payment This section makes it clear that payment of a negotiable instrument, such as a BOE, discharges the debt it represents. A bank receiving a BOE for deposit is effectively facilitating the discharge of the financial obligation outlined by the instrument. By refusing to process the BOE, Bank of America is not fulfilling its duty to honor this financial discharge. 

B. UCC Article 9 : Secured Transactions UCC 9-203 - Attachment of Security Interest A bank can attach a security interest to funds deposited in a trust account, including proceeds from a Bill of Exchange or a Fiscal Service Form 1522 deposit. By refusing to process such deposits, Bank of America is neglecting to recognize the validity of these instruments as collateral, which could be beneficial for both the depositor and the bank in securing transactions. 

UCC 9-310 - Perfection of Security Interest This section allows financial institutions to perfect a security interest in collateral, which may include deposits made via instruments like the Fiscal Service Form 1522. The bank stands to gain by processing such instruments, as they may be used as collateral for loans or other financial products. 

II. Code of Federal Regulations ( CFR ) A. 31 CFR 202.3 - Processing of Treasury Transactions The U.S. Department of the Treasury regulations under 31 CFR 202.3 specifically require banks to process deposits of Treasury forms, including the Fiscal Service Form 1522. By refusing to process the 1522 form for deposit, Bank of America violates these regulations, impeding the depositors ability to complete a legally valid deposit into a trust account. 

B. 12 CFR 12.2- Standards for Depository Institutions This regulation emphasizes the need for depository institutions to provide fair and equal access to financial services. The refusal to process the Fiscal Service Form 1522 and the Sight Draft Bill of Exchange for deposit may constitute a violation of this regulation, denying the customer access to services they are entitled to under U.S. banking regulations. 

III. Federal Reserve Regulations A. Federal Reserve Regulation D ( Reserve Requirements ) Regulation D, 12 CFR 204.1 - Reserve Requirements for Depository Institutions The Federal Reserve requires certain reserve requirements based on the types and amounts of deposits held by financial institutions. When a bank accepts deposits from instruments like the Fiscal Service Form 1522 or the BOE, it can leverage those deposits to meet reserve requirements, ensuring compliance with Federal Reserve policies. 

FedWindow Discount Program By processing these financial instruments, including the deposit of the Fiscal Service Form 1522, the bank can qualify for access to the FedWindow Discount Program, which offers short-term liquidity at favorable interest rates. This program can benefit the bank financially, as it provides a direct route for obtaining low-cost capital. The bank can use the deposits to meet liquidity requirements and access funds for lending and other activities. 

IV. Financial Benefits to the Bank Interest Earnings on Deposits By accepting deposits of the Fiscal Service Form 1522 and Sight Draft Bills of Exchange, Bank of America would be able to access substantial deposits into trust accounts. These funds can be utilized to earn interest through various investment vehicles, such as interbank lending or other short-term instruments, which generate income for the bank. 

Increased Access to Liquidity Processing such transactions enables the bank to access additional liquidity through the Federal Reserves discount window or by using the deposits as collateral for other financing activities. This access to liquidity allows the bank to offer more loans, engage in higher-yield investments, and manage financial risks more effectively. 

Fee Revenue Banks charge fees for processing complex transactions, including cashing Bills of Exchange or managing trust account deposits. By refusing to process the Petitioners requests, Bank of America potentially forgoes revenue from transaction fees, fees for managing trust accounts, and fees for offering ancillary services tied to these financial instruments. 

Risk Mitigation through Collateralization By processing deposits from negotiable instruments like the BOE and Fiscal Service Form 1522, Bank of America could mitigate its exposure to financial risk by holding secured collateral. The funds deposited via these instruments can serve as collateral for loans, reducing the bank 's overall risk exposure in lending activities and increasing its ability to offer competitive rates. 

Compliance with Regulatory Standards Complying with these regulations, including the Federal Reserves liquidity requirements, can enhance the banks standing with regulators and investors. The ability to process these forms efficiently and in compliance with applicable laws provides the bank with a strong financial and operational position. 

V. Conclusion Bank of America 's refusal to process the Fiscal Service Form 1522 and the Sight Draft Bill of Exchange for deposit not only violates various provisions under the UCC, the CFR, and Federal Reserve regulations, but also limits the financial benefits that the bank could derive from processing these instruments. By processing such deposits, the bank can enhance its liquidity, earn interest on deposits, access regulatory benefits like the FedWindow Discount Program, and generate fee revenue. 

This failure to comply with established banking regulations not only deprives the Petitioner of their legal rights but also prevents Bank of America from realizing financial opportunities that come from properly handling these financial instruments. 

Relief Requested : A thorough investigation into the conduct of XXXX and XXXX, including the discriminatory treatment and failure to assist me in processing my request. 
Immediate clarification from Bank of America on how they will handle requests involving Fiscal Service Form 1522, Sight Draft Bills of Exchange, and trust account registration with the Federal Reserve. 
Compensation for the inconvenience, time lost, and potential financial damages resulting from the failure to process my request in a timely and efficient manner. 
I respectfully request that this matter be investigated and resolved, ensuring that Bank of America complies with all applicable legal standards and provides adequate customer service.