Customer Deposits Are Property of the Bank: Close Your Account NOW

By Susanne Posel - heintelhub.com - August 24, 2012 – h/t to MJ

In June of 2012, Eric Bloom, former chief executive, and Charles Mosely, head trader of Sentinel Management Group (SMG) were indicted for stealing $500 million in customer secured funds.

Both Mosely and Bloom were accused of “exposing” customer segregated funds “to a portfolio of highly risky derivatives.”

These customer funds were used to “back up personal investments” which were part of “collateral for a loan from Bank of New York Mellon” (BNYM).

This loan derived from stolen customer monies was “used to purchase millions of dollars worth of high-risk, illiquid securities, including collateralized debt obligations, or CDOs, for a trading portfolio that benefited Sentinel’s officers, including Mosley, Bloom and certain Bloom family members.”

Fast forward to August 9th of 2012, and the 7th Circuit Court of Appeals (CCA) rules that BNYM can be moved to first in line of creditors over the customers that had their funds stolen by SMG.

When a banking customer deposits their money into their bank account, the Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SPIC) are in place to protect the customer from fraud or theft.

The ruling from the CCA means that these regulatory systems will not insure customer funds, investments, depositors and retirees who hold accounts in banks.

In fact, the banking institution is now legally allowed to use those customer funds deposited as collateral, payment on debts for loans made, or free use on the stock market to purchase investments as the bank sees fit.

Fred Grede, SMG trustee, explained that brokers are no longer required to keep customer money separate from their own. “It does not bode well for the protection of customer funds.”

Since the ruling gives banks the right to co-mingle customer funds with their own, no crime can be committed for the use of customer deposited monies.

According to Walker Todd , former lawyer for the Federal Reserve Bank of New York and Cleveland:

“Basically, there is a new 7th Circuit opinion saying that there is no reason to impose a constructive trust on a lender’s takings of customers’ funds from client commodity firms that were used (inappropriately) to secure the firms’ borrowings, as long as the lender can say that it did not know WITH CERTAINTY that customers’ funds were being repledged. Negligence and misappropriation (vs. knowing criminal intent) are now a sufficient excuse for letting the lender keep the money and go to the head of the line for distributions in bankruptcies of the client commodity firms.”

When a customer deposits money into a bank, the bank essentially issues a promise to have those funds available when the customer returns to withdraw the deposited amount.

When the same customer withdraws funds from their account (whether checking or savings) the customer assumes that the bank has enough funds to cover their withdrawal; including the presumption that their monies are separate from the bank’s assets.

Now, those funds are up for grabs by the bank at their discretion without explanation to the customer – nor is the bank obligated to recoup the customer should they “lose” those funds due to bad loans, bankruptcy or stock market loss.

In Texas, Pamela Cobb, manager of Bank of America (BoA), stole an estimated $2 million from customer funds for personal use. Cobb had been taking customer segregated funds since 2002.

Customers have complained of fraudulent charges placed on their accounts that BoA cannot explain. When the customer brings these charges to the in-house fraud department, they are given the run-around until they acquiesce.

Other customers have had their private possessions stolen right out of their safety deposit box held at BoA. The safety deposit box was drilled into and the contents shipped to the BoA corporate holding center in South Carolina.

In 1992 to 2003, Citibank called their theft of customer funds “account sweeping” wherein they stole more than $14 million from customers nationally.

Using computerized credit card processes to remove positive and negative balances from customers, the scheme included double payments or funds paid out on returned purchases that were then attributed back to the customer.

At Chase bank, an anonymous employee opened an account under a customer name (targeting an Alzheimer’s sufferer), complete with a personal debit card.

An estimated $300 per day was withdrawn on the fraudulent account. When family representing the victim alerted Chase, they brushed them off with an internal investigation claim – even as the family sought legal action.

Banking fraud against the elderly has risen of late, since banks realize they can steal massive amounts of cash from their aging customers with little to no repercussions.

The recent ruling on SMG has given the banking industry the legal backing they have been lacking when stealing from their customers.

Our financial institutions have been planning for a financial collapse wherein the US government will not offer assistance.

The resolution plans required by the Federal Reserve Bank, described schemes to have the major domestic banks remain afloat by selling off assets, finding alternative sources of funding, reducing risky measures that make a quick buck. These strategies were to be perfected with “no assumption of extraordinary support from the public sector.”

The mega-banks, through Wall Street, are also acquiring firearms, ammunition and control over private mercenary corporations like DynCorp and ‘Blackwater” as authorized by the Department of Defense (DoD) directive 3025.18 .

DynCorp is a military-based private mercenary contractor that provides (among other services) intelligence training and support, international security, contingency plans and operations. Ninety-six percent of their funding is based on annual revenues from the US federal government.

The international branch of DynCorp has operated as a “police force” even assisting local law enforcement during Hurricane Katrina.

Named as investors for the amassing of gun and ammunition manufacturers are Citibank, BoA, Barclays and Deutsche Bank who are pouring money into Cerebus and Veritas Equity who have taken over private corporations involved in the controlling riot situations.

The Federal Reserve Bank, one of the heads of banking cartels, has their own police force which operates as a protective security for the Fed against the American public.

As part of the Federal Reserve Act signed in 1913, the designation of a Federal Law Enforcement – special police officers that are exclusively regulated by authority of the Fed (whether in uniform or plain clothes.

These specialized police officers (who train with Special Response Teams) can work in tandem with local law enforcement or US federal agencies. These officers are heavily armed with semi-automatic pistols, sub machine guns and assault rifles as well as body armor.

Of recent, when withdrawing cash from an ATM, the daily allotted amount has decreased with some banks, thereby forcing the customer to go into the branch and extract the difference with a teller.

At this point, according to anonymous informants, the customer is taken into a backroom to be questioned as to why they want the cash, what they are purchasing with the cash, why they are not choosing to use a debit card or another form of digital trade to make the purchase. These questions are not only intrusive, they are illegal.

Some anonymous sources have said that banking representatives who conduct the integrations are directed to keep a record of customer responses on an online application that will be sent to the FBI in conjunction with Patriot Act mandates on tracking banking activity.

Customer funds are no longer secure, no longer backed by the FDIC or other insurance corporations, and banks are legally allowed to co-mingled customer money with other funds of the bank. The only safe place for your money is with you.

Now is the time to close your bank account.

Susanne Posel is the Chief Editor of Occupy Corporatism Our alternative news site is dedicated to reporting the news as it actually happens; not as it is spun by the corporate-funded mainstream media. You can find us on our Facebook page.

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Technorati Tags: DOD,Banks,Big Brother,banksters,money,BoA,New Economic World Order,global elites,NWO,Blackwater,DynCorp,FDIC,Deutsche Bank,Barclays,Cerebus,Veritas Equity,savings,your savings,Citibank,Federal Reserve,private army,SMG,preparedness,BNYM,the FED,banking cartels,International bankers,investors money,survival

BFP Report: Meet the Department of Homeland Security’s ‘Distinguished’ Privacy Advisory Committee Members

Wednesday, 30. November 2011

Let’s See Who is Watching DHS Mega Fusion Center

Yesterday I came across an article on DHS plans to create its own internal fusion center so that its many agencies can aggregate the data they have and make it searchable from a central location. Let’s read a few excerpts from this typical half-hearted MSM attempt to provide a semi-complete picture of the state of ‘things’ when it comes to our government:

Information sharing (or lack thereof) between intelligence agencies has been a sensitive topic in the U.S. After 9/11, there was a push to create fusion centers so that local, state, and federal agencies could share intelligence, allowing the FBI, for example, to see if the local police have anything in their files on a particular individual. Now the Department of Homeland Security wants to create its own internal fusion center so that its many agencies can aggregate the data they have and make it searchable from a central location…

Of course this is another troubling development in an extremely troubling state of ‘things.’ However, this wasn’t the focus my attention. Here comes the not-really-reported angle in this half-covered story [All emphasis mine]:

The DHS is calling it a “Federated Information Sharing System” and asked its privacy advisory committee to weigh in on the repercussions at a public meeting in D.C. last month…

So what is this ‘privacy advisory committee’ and who are its members? This is what the article provides on that front:

The committee, consisting of an unpaid group of people from the world of corporate privacy as well as the civil liberty community, were asked last December to review the plan and provide feedback on which privacy protections need to be put in place when info from DHS components (which include the TSA, the Secret Service, and Immigration Services, to name a few) are consolidated. The committee raised concerns about who would get access to the data given the potentially comprehensive profile this would provide of American citizens…

It sounds good. Doesn’t it? It hits all the rights adjectives and catch phrases: Unpaid, Civil Liberties Community, Corporate Privacy Activists-Experts …Let’s read one more relevant excerpt and then I’ll tell you the ‘real’ significance of this half-covered report:

The committee’s recommendations are available in draft form below. DHS would not provide the original document — a “tasking letter” — that it issued to the committee describing its plans. But DHS’s Immigration and Customs Enforcement division did announce this month that it had awarded a contract to Raytheon for a “new system [that] will enhance how agencies manage, investigate, and report on law enforcement and intelligence activities by improving data sharing between multiple law-enforcement agencies,” reported Information Week. Raytheon’s work started on September 27, a week before the privacy committee got back to DHS with its draft privacy policy recommendations (available below). The committee noted that it had been given an “aggressive timeline” by DHS on coming up with its recommendations…

What got my mind wondering, what should have gotten the wheels turning in MSM reporters’ head, was this question:

Who are the members of this ‘selected’ aka government hand-picked, privacy-integrity advisory committee?

An important and very logical question, no? And I tell you what, not a difficult one to find an answer to. The article even had a link to the DHS website where the members of this ‘select’ committee are listed by name with their background. Check for yourself here. Because the information contained in this page is at least as significant and revealing as the point half-covered in this quasi exposé. Let me show you a few examples of what I am talking about here:

Chairman: Richard V. Purcell, Chief Executive Officer, Corporate Privacy Group, Nordland, Wash. Mr. Purcell runs an independent privacy consulting group, focusing on policies, practices, and education. He is currently Chairman of TRUSTe and was formally the Chief Privacy Officer for the Microsoft Corporation.

Well, Mr. Purcell had served Microsoft Corporations for many years, and only recently left MS to start his ‘vague’ consulting business.

In 2003 Microsoft was chosen as exclusive Department of Homeland Security contractor.

DHS has chosen Microsoft Corp. as its preferred supplier of desktop computer and server software, according to a statement issued late Tuesday…The contract “establishes a key partnership relationship” between the government and Microsoft, the world’s biggest software maker, the statement said…The deal is worth $90 million.

The business (and the large dollars involved) between Microsoft and DHS has been growing and prospering ever since. Every year, including this year, 2011, Microsoft is listed as one of DHS’ major private business contractors. Are you with me so far? Now during all these lucrative Microsoft-DHS business marriage years, Mr. Purcell was working as the CPO at Microsoft. Not only that, he was royally exposed in his involvement in the Microsoft-NSA Key-Echelon case and its subsequent cover up. You can read more on this major 2000 exposé and related communications here at Cryptome. Here is the title of the exposé and some background on Microsoft’s and Purcell’s  ‘intimate’ involvement in the NSA Key controversy and the subsequent cover up:

Microsoft Offer to Resolve “Questions About NSA_Key”, then Put Up a Brick Wall

Background : Duncan Campbell gave a presentation on Global surveillance and the Echelon network at the Computers, Freedom and Privacy 2000 (CFP2000) conference held in Toronto, Canada from 4-7 April 2000. During the presentation, he instanced the NSA_KEY controversy as one of a number of outstanding issues related to security and surveillance.

Richard Purcell, Microsoft’s Director of Corporate Privacy, also attended the CFP2000 conference. After the presentation, Purcell approached Campbell. He said that he wished to resolved the doubts about NSA_KEY. He would see that this was done.

Campbell then put a number of key questions, politely but persistently. After three weeks, Microsoft backed off. They refused to answer outstanding questions. They declined even to explain why they were unwilling to continue contact. They stopped answering e-mail.
…

I encourage you to read the entire communication-correspondence between the investigator and Purcell’s unit at Microsoft here. Also check out this article on ‘How NSA Access was Built into Microsoft Windows.’

You see, our government, the Department of Homeland Security, could not have cherry-picked a better candidate as its Chairman of Privacy-Integrity Advisory Committee. With his long years in Microsoft as an executive until recently, with his stocks and shares tied to Microsoft, with his proven track record in covering up privacy and liberty-violating government-private business collusion and practices, Mr. Richard Purcell appears to be the best candidate to chair the Department of Homeland Security’s ‘Privacy and Integrity Advisory Committee.’

Let’s check out another hand-selected colluder by DHS for its mockery of an advisory board on ‘privacy and integrity’:

Christopher Pierson, Chief Privacy Officer and Senior Vice President, Citizens Financial Group, Inc. (Royal Bank of Scotland- RBS). Dr. Pierson was President and Chairman of the Board of the Intraguard Phoenix Member’s Alliance, Inc., from 2003-2007 and served on the Arizona Office of Homeland Security’s Homeland Security Coordinating Council from 2003-2006.

Well, right off the bat, this dude used to directly work for the Department of Homeland Security; 2003-2006. Now, what is this the Intraguard Phoenix Member’s Alliance, Inc.? Here are a few noteworthy excerpts from its website:

Arizona InfraGard is an alliance between the Arizona Office of the Federal Bureau of Investigation and individuals committed to protecting the nation’s infrastructure and its people. The members, who are representative of all infrastructure sectors, public and private, identify and mitigate physical and cyber threats through information sharing. Arizona InfraGard promotes best practices, security awareness and training, community outreach, and the exchange of information between law enforcement and infrastructure owners and operators.

So we have Mr. Christopher Pierson hand-picked by the DHS to watch over DHS practices and objectively advise on whether certain policies and practices violate the people’s privacy and integrity. The man used to work for them-the DHS, he worked with the FBI to help ‘share data,’ and now he will watch out for your privacy and mine!

Let’s check out other member:

David A. Hoffman, Director of Security Policy and Global Privacy Officer, Intel Corporation, Hillsboro, Ore. Mr. Hoffman has experience in privacy policy issues at the business and technical level, working on issues of interoperability, improved data quality, and data retention. He serves on the board of directors for the non-profit privacy compliance organization, TRUSTe.

Where do I begin? Let’s begin with Intel Corporation’s business and services to the federal government as a contractor. They had so much that they had to form a wholly owned subsidiary ‘Intel Federal LLC.’ Of course Intel has major contracts and advisory positions with DHS. Oh, interestingly he is closely connected to Richard Purcell, the Chairman of this DHS mockery privacy advisory committee. Purcell is the chairman of this TRUSTe, and Hoffman serves on its board of directors. And here is another blurb on Hoffman from a release only 3 months ago:

WASHINGTON, Aug. 10, 2011 /PRNewswire/ – The National Cyber Security Alliance (NCSA), a nonprofit public-private partnership focused on cybersecurity awareness and education for all digital citizens, today announced that David Hoffman, director of security policy and global privacy officer at Intel Corporation, has joined the organization’s board of directors.

…

NCSA board includes all our government partners and contributors to its surveillance program:

NCSA board members include: ADP, AT&T, Bank of America, Cisco Systems, EMC Corporation, ESET, Facebook, General Dynamics Advanced Information Systems, Google, Intel, Lockheed Martin Information Systems & Global Services, McAfee, Microsoft, PayPal, Science Applications International Corporation (SAIC), Symantec, Verizon and Visa…

Please check the list of this laughable privacy advisory board and continue this thread. Whether it is a member from other government contractor moguls like IBM, or academics from University departments generously and heavily funded by our governments, or lap-dog watch-dog organizations funded by the shadow government players such as Rockefellers, Soros, Carnegie, Ford…you’ll see a board of clowns juggling self-interest and profits while faking advisory roles on the 99% absent-privacy and long-gone integrity committee.

Please follow the links in the article to find out more.

Also check out this article on ‘How NSA Access was Built into Microsoft Windows.’

Source:  Boiling Frogs  - h/t to Jean Stoner

BIG BANKS LOSE BILLIONS ON ‘BANK TRANSFER DAY’ – BUT THIS MIGHT BE IN THEIR FAVOR

Bank Transfer Day, the movement that urged bank customers to close their accounts and instead deposit funds in credit unions on or before November 5, led to at least 650,000 new credit union members and a total of $4.5 billion in new deposits, according to the Credit Union National Association.

(Related: New Measure Puts U.S. Poverty Rate at 16 percent)

About 80 percent of credit unions in the U.S. saw an increase in accounts in October, with membership increases of 10,000 or more in 21 of the 50 states and the District of Columbia in the past month.

California credit unions saw the biggest gains, adding about 90,000 new members and $624 million in new deposits.

Texas came in second, with $326 million in new deposits from 47,000 new members.

Mary Beth King, communications director for the Credit Union Association of New Mexico, said that the association would be sending out surveys to its member institutions to gauge new numbers.

“Regardless of how many people joined credit unions Saturday, there is a big new awareness of credit unions as not-for-profit financial cooperatives owned by their members. That is the credit union difference we’ve worked to let people know about all along,” said King.

However, despite the loss of capital and customers, there are some analysts who argue that “Bank Transfer Day” was actually in the banks’ favor. How? Motley Fool columnist Morgan Housel explains (h/t Christian Science Monitor):

One of the drivers behind [Bank Transfer Day] is people trying to teach banks a lesson. The irony of that is since the financial crisis, and especially over the last three months as there has been a panic about Europe . . . banks have been inundated with cash deposits.

They’ve been seeing a higher inflow of deposits than they can turn into loans.

But how does that translate into “Bank Transfer Day” working in their favor? Apparently, the high inflow of deposits “puts pressure on their margins because banks have to pay [Federal Deposit Insurance Corp.] premiums and overhead costs.”

By removing hundreds of small-time accounts with low balances, they would actually be saving money on their premiums. Housel explains:

. . . in the past banks could earn money [from customers with lower balances] from overdraft fees and debit interchange fees and a lot of that has been scaled down through recent regulations…

People are going to be moving to credit unions, and that’s good for them because they’re going to have lower fees, they’re going to have better service, they’re going to have the feeling that they are investing in their community.

And then the banks are going to be better off because they are getting rid of their least-profitable or not profitable clients.

However, probably most important is the fact that the accounts appear to have had low enough balances that being closed did not turn into a financial nightmare for some banks.

As mentioned earlier on The Blaze, in events where customers panic and withdraw all deposits, the results can be disastrous. But this does not seem to be the case from Saturday’s protest. In fact, “despite news that the financial industry lost roughly 650,000 customers and $4.5 billion in deposits to credit unions because of Bank Transfer Day . . . some of the biggest U.S. banks moved upward today, outperforming the major indices.”

Therefore, because some of the biggest banks are moving upward on the market and that closing some of the accounts could actually save them money, in an odd way it would seem that everyone benefited from “Bank Transfer Day.”

The protesters felt a sense of accomplishment and some banks were able to offload thousands of reportedly low-balance, non-profitable accounts.

[Editor’s note: portions of the above originally appeared on Wall St. Cheat Sheet]

Related:

Be careful. It’s ok if the banks rip you off, but don’t dare say, write, or PAINT anything bad about them…  The Art of Burning Banks - YouTube

Source:  the Blaze

BANK OF AMERICA TO CHARGE $5 MONTH FEE FOR USING DEBIT CARD

NEW YORK (The Blaze/AP) — Bank of America plans to start charging customers a $5 monthly fee for using their debit card to make purchases. The fee will be rolled out starting early next year.

A number of banks have already either rolled out or are testing such fees. But Bank of America’s announcement carries added weight because it is the largest U.S. bank by deposits.

Anne Pace, a Bank of America Corp. spokeswoman, said Thursday that customers will only be charged the fee if they use their debit cards for purchases in any given month. Customers won’t be charged if they only use their cards at an ATM.

The fee will apply to basic accounts and will be in addition to any existing monthly service fees. For example, one of the bank’s basic accounts charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum average balance of $1,500.

A fee for using debit cards is still a novel concept for many consumers and was unheard of before this year. But there are signs it may soon become an industry norm.

SunTrust, a regional bank based in Atlanta, began charging a $5 debit card fee on its basic checking accounts this summer. Regions Financial, which is based in Birmingham, Ala., plans to start charging a $4 fee next month.

Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to roll out the fee more broadly.

 

“I might use all cash. Or go back to writing checks,” he said.

The debit card fee isn’t the only unwelcome change for checking account customers are seeing either. The banking industry has been raising fees and scaling back on rewards programs as they adjust to new regulations that will limit traditional revenue sources.

Starting Oct. 1, a regulation will cap the fees that banks can collect from merchants whenever customers swipe their debit cards. Those fees generated $19 billion in revenue for banks in 2009, according to the Nilson Report, which tracks the payments industry.

There is no similar cap on the fees that banks can collect from merchants when customers use their credit cards, however. That means banks may increasingly encourage customers to reach for their credit cards, reversing a trend toward debit card usage in the past several years.

An increasing reliance on credit cards would be particularly beneficial for Bank of America, which is a major credit card issuer, notes Bart Narter, a banking analyst with Celent, a consulting firm.

“It’s become a more profitable business, at least in relation to debit cards,” Narter said.

This summer, an Associated Press-GfK poll found that two-thirds of consumers use debit cards more frequently than credit cards. But when asked how they would react if they were charged a $3 monthly debit card fee, 61 percent said they’d find another way to pay.

If the fee were $5, 66 percent said they would also change their payment method.

Bank of America’s debit card fee will be rolled out in stages starting with select states in early 2012. The company would not say which states would be affected first.

Bank of America shares rose 9 cents, or 1.5 percent, to $6.25 in afternoon trading.

h/t to the Blaze

Dodd-Frank: The End Of Free Checking?

On Sat., Oct. 1, new regulations from the Dodd-Frank financial overhaul go into effect on debit cards. Specifically, they impose price controls on “interchange fees,” the fees that banks and credit unions charge to retailers on debit card transactions.

The average interchange fee is about 44 cents. The new rules limit the fees to 21 to 24 cents.

“The costs of processing debit card transactions doesn’t go away because you limit the price,” said John Berlau, director of the Center for Investors and Entrepreneurs at the libertarian Competitive Enterprise Institute. “That shifts the costs to consumers.”

These fees are used by banks to offer free checking and rewards programs. But now those programs may be be coming to an end. Just 45% of noninterest checking accounts are now free, down from 65% last year, according to a recent survey by Bankrate.com. The average monthly fee for those accounts has risen 75% in

the last year to $4.37.

Bank of America (BAC) just announced a $5 monthly fee for debit cards, starting early next year. BofA cited regulatory costs. Wells Fargo (WFC) and Chase (JPM) has experimented with $3 fees in some markets. Earlier in the year, SunTrust (STI) bank ended its debit card reward program.

Berlau notes other consequences:

Much of these costs will be transferred to consumers in terms of loss of free checking and debit card rewards, new charges for using an ATM, and other fee hikes and service cuts. In its rule, the (Federal Reserve) almost invited banks and credit unions to do this, “helpfully” pointing out that “the interchange fee standard would not limit the ability of an issuer to earn revenue from other sources, such as charging fees to cardholders.”

And there may be other nasty surprises, such as job losses. A Wall Street Journal editorial blamed at least part of the 40,000 Bank of America job losses on the loss of revenue due to the Dodd-Frank price controls. And late last week, Texas-based International Bancshares announced that due to the revenue loss from the price controls, it was closing 55 branches in grocery stores and shedding 500 jobs.

Even retailers may not get the full benefit they are expecting. According to one article, debit card processors can charge an additional fee when merchandise is returned, and that fee may not be covered by the regulations. Processors also may charge flat fees on transactions rather than a percentage-based fee, meaning retailers may pay more on small sales. Expect more processors to do that as the regulations take hold.

By David Hogberg   -  Thu., Sept. 29, 2011 11:30 AM ET  -  Capital Hill  -  h/t to Jean Stoner

Related:

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And at the core of this guy’s fiscal policies…