You’re bombarded with information about safeguarding your bank accounts from scam artists, identify thieves, embezzling employees and errant spouses. Yet there’s an even bigger threat to the money in your account: your own bank.
Banks don’t like to lose money. They don’t like to be in the middle of lawsuits as stakeholders. They don’t like to be held liable for their own mistakes.
Consequently, if they have an excuse not to give you back your own money, they will seize upon it.
How can this happen? Let me count the ways.
It can freeze an account if
- someone else claims they have an interest in the funds.
- it receives a court order enjoining the account holder from withdrawing the funds.
- it believes the account owner is “kiting” checks.
- someone in the bank thinks there is unusual activity on the account.
Most people know that a bank can refuse to give credit on newly deposited funds for anywhere from 3 days to 10 days.
What they don’t realize, however, is that a bank has a right to offset their account for a past-due debt. If you have an outstanding loan with the bank that becomes past-due, the bank can take the money out of your account to pay the balance.
Think you can cash out that account at any time and take your money elsewhere? Not really – the bank has the option to give you your funds in the form of a cashier’s check, not cash. And most banks will treat a cashier’s check like any other newly deposited fund.
Scared? You should be – your bank can crash your credit score and put you out of business in a heartbeat.
So how do you protect yourself? You have several options.
- Spread your accounts among two or three institutions – a large bank, a credit union, and a local bank.
- Know your banker.
- Keep some cash on hand.
- Read your account agreement.
- Read your bank statements as soon as you receive them.
If you are having a problem with your banking institution, call Hammerle Finley Law Firm. Virginia Hammerle and Thad Finley have been members of the Texas Association of Bank Counsel for over twenty years.