And my assessment of the evidence, as his consumer rights investigator and advocate, thus far points in that direction: the money and all records of what happened to the money are just gone--lost in the ether, so to speak.
The story begins in 2003. Byline Bank was then known as North Community Bank. The young man was sitting across the desk from his personal bank advisor, asking questions about the best and most secure way to invest $10,000 he had scrupulously saved and certainly never wanted to see lost.
“Why don’t you put your money in a Money Market Account?” recommended the personal banker, according to the young man. “You can drop it in the Money Market Account, let it grow with interest, and just forget about it while it grows!”
And that’s exactly what the young man did. He followed his personal banker’s advice. He deposited the $10,000 in a Money Market Account and forgot about it, knowing that, should he ever need access to it, his hard-earned money would be safe and secure at the bank.
This transaction transpired at the Lakeview branch of Byline Bank. This was the young man’s neighborhood bank, and would be for years. The personal banker who recommended investing in a Money Market Account, in fact, still works at the same Lakeview branch where this story of lost money begins. The young man was then a relatively recent immigrant to America from a third world country, living the American Dream, and he entrusted an American financial institution with his $10,000.
Come 2018, the young man had put on some years, developed a disability that made it difficult for him to work, and decided it was time to tap into the Money Market Account he had opened in 2003.
Except there was a problem: when he called Byline Bank to arrange for a withdrawal, Byline representatives said they had no records of the account, other than the fact that it was opened in 2003 with an initial deposit of $10,000.
The lack of any other records, like statements, or tax documents, meant that the account was closed and the money was gone, said Byline Bank officials. After this: the silent treatment. The Bank would not meet with the consumer. The Bank would not disclose its document retention and destruction policies to the consumer. The Bank, in fact, would not talk about this Money Market Account, except through external counsel.
I had become involved in advocating for this now middle-aged consumer and I was, to be sure, astonished and enraged that a bank could so callously lose track of longtime consumer’s money and justify a declaration that the money was gone with the fact that the bank had retained no records of what happened to the money after it was placed in the Money Market Account. I therefore helped the consumer file a complaint with federal regulators. The complaint was ultimately forwarded to the FDIC for examination.
The FDIC’s “examination” of the complaint was, to my mind, just astonishing--and eye-opening. According to the FDIC, Regulation DD requires financial institutions to retain records of accounts for only (2) two years. So Byline Bank was off the hook and bore no responsibility for returning the consumer’s investment. By this logic, a consumer could invest $10,000 in a Money Market Account, forget about it for two years, receive no statements or disclosures regarding the account during those two (2) years, and after these two (2) years have elapsed find that all records of his or her investment have been destroyed or lost. And the consumer would have no way of recovering funds for which no records existed.
If the FDIC nonchalantly allows such conduct on the part of financial institutions, then our investments in these institutions are neither safe nor secure. An investment may as well be viewed as a donation to the financial institution for which you get no tax deduction and the records of which simply may vanish into thin air after a mere two (2) years.
I suspect that Byline Bank’s practices may be especially unique, in terms of flagrantly losing track of a consumer’s money, but the FDIC’s response to the missing records in this case surely makes me second guess the idea of putting my own money in a bank—ever again. In light of Regulation DD, a combination safe now seems far safer and more secure a place to store money than a financial institution that can make accounts vanish after two (2) years.
To be sure, the effort to recover this consumer’s $10,000 plus interest has only just begun. The FDIC’s examination of the complaint did reveal new information that Byline Bank may also have lost track of another investment of over $8,000 in a second Money Market Account.
What makes this case particularly interesting is that the consumer’s personal tax records fail to account for interest earned on two separate Money Market Accounts at Byline Bank. Is it possible that Byline Bank simply embezzled the consumer’s money and issued no disclosures or tax forms? Yes, it is possible. Because the Bank destroyed records of what happened to the money invested. Regulation DD be what it may, this kind of conduct, on the part of a financial institution, cannot stand. More reports soon on the effort to recover one man’s investments.
Author Dan Sullivan is a writer, public speaker, and consumer and civil rights consultant. You can reach him at (202) 340-6724 or firstname.lastname@example.org.