Image by: by Frits Ahlefeldt

Sometimes, enough is enough. We’ve tried talking to you, but you don’t want to listen. We tried talking to your supervisor (the FDIC), but they don’t seem to care. So we are left with very few options.

On late December 24th, you sent a notice that you were canceling some of your certificates of deposit. You claim the FDIC ordered you to do so, but we have yet to see actual proof of this. You hang your hat on a clause in your disclosures that reads, “We may also close this account at any time upon reasonable notice to you and tender of the account balance personally or by mail.” First problem, sending a notice on the same day that you send a wire isn’t reasonable. Second problem, a CD is not a typical deposit account. A CD is a time deposit with a contractual term and rate. You may have the right to close the account, but you are obligated to pay the interest through the maturity date. That is the agreement you made with each of these CD account holders. Anything less, is a travesty, unimaginable act of bad will, and most of all, you are breaking your word.

So Main Street Bank located in Kingwood, TX, I’m calling you out. I’m giving notice to you and any future customers of yours, that your word is worth less than the paper it is printed on. Anyone that considers opening a future CD or any other account with you will hopefully shop with a different bank or even better yet look to a credit union. No wonder people don’t trust banks.

You see, the depositor had other options at the time that they opened their Certifcate of Deposit. You have robbed them of the interest that you promised them for the original term of the CD. If you had any honor, you would immediately wire the remaining interest that you owe. And not only did they trust you, but so did we. Shame on you. And shame on the FDIC for not doing their duty (and believe me this isn’t the first time) to protect depositors from unscrupulous banks that hide behind small print.

No reasonable depositor expects that a bank can just up and close their CD without paying all interest. Historically, the only exception to this has been when the FDIC closes the bank.

Main Street Bank of Kingwood, Texas, I will gladly retract this post, just pay the depositors what is due to them. Just be honorable.

Update: A comment below asked to see the letter that was sent out. Here is the letter with the appropriately redacted information. View letter And to be clear, it wasn’t just one CD. It was 14 CDs that totaled about $1.4MM. Lost interest is about $32K. So a fairly decent chunk of change. Also, although the letter references a consent order from the FDIC, the only thing the consent order mandated was that they shrink in size. The bank came up with the plan to do it. And the bank unfairly closed a set of CDs with out properly compensating the CD holders.
cd :O)

Just thought I would make a post before Christmas. We will be closed on the 24th. I will post a “Looking Back” next week. For now, let’s look forward to celebrating the Christmas season with friends and family. May your day be filled with joy, laughter, good food, good conversation, and fun family traditions.

We start on the 24th with a Christmas Eve service at our church. We follow that with a trip around the town enjoying the Christmas lights. Finally, we end up at home and everyone gets to open up one gift.

Our Christmas Day starts between 8:00 and 9:00 in the morning. The kids are able to get up before that and open their stockings and their Santa Gift arrives unwrapped with special labels. My wife and I come down and make some coffee and open our stockings. We move to the living room where the tree and presents are. We start with a reading from Luke (from the Bible, not my son :O) ). We then sing Happy Birthday to Jesus. Next is the passing of the gifts and the opening of the presents. We end our morning with a nice breakfast.

So share your traditions in the comments below. As I said, I’ll be back with a look back and a look ahead to 2011.

Merry Christmas to all and to all a good night.
cd :O)

Okay, first a few comments. 1) I appreciate all of our readers and subscribers to the ends of the earth. 2) Time is money. 3) I use some of my time to help you earn more money with your CDs. 4) Our blog is supported by ad revenue. That is how I earn money so that I can spend more time helping you.

A recent reader ruffled my feathers a little when they didn’t like the extra words I write and just wanted CD Rates. Part of my enjoyment comes from not only hunting down the rates, but providing some additional insights. I am a story teller by nature and naturally want to tell a story about the bank. So I hope you can give me some grace and realize that part of what makes this enjoyable for me is the “story” that I tell.

Alright, enough of that, on to the rates (sans story this time).

AIG Federal Savings Bank

I am surprised that AIG Federal Savings Bank hasn’t changed their name like GMAC and Lehman Brothers, but Kudos for staying the course. Their CD Rates leave a lot to be desired though. I suppose if you have over $1MM dollars and are looking for a healthy bank, they would end up in the top 5 CD rates or so.

cd :O)

Featured CDs at Ally Bank

If you have been reading the recent posts and comments you may have noticed a representative from this bank has been visiting. I thought it would be good to go ahead and feature the bank.


Aurora Bank FSB was formerly known as Lehman Brothers Bank, Fsb. Most people can understand the desire for a fresh start. After all, Ally Bank (formerly GMAC) did the same thing. This bank does have quite a history. They first opened in 1921, before the FDIC existed as Delaware Savings And Loan Association. Interestingly they didn't add FDIC insurance until 1958. They became Lehman Brothers in 1999 and Aurora in 2009.

Aurora Bank FSB has had a positive change since I last reviewed them and posted. They have a long history, but 2008 and 2009 were not stellar for them. Of course, those weren't good years for many banks. They have had two additional quarters of positive financials and did achieve a 4-star rating. They also made their rates page more friendly and added a button for easy access to open accounts. Aurora Bank does take IRA CDs, but the rates are pretty low. I wonder if this will change since Ally Bank is now offering competitive IRA rates.

An interesting side note on their early withdrawal penalty. Most banks have language the effect of "if we consent" which means they could technically not honor a request to close a CD early. In our history, that has happened once. Aurora Bank does not have that language, at least in the disclosure info they have posted on-line. As to their rates, the 1-year is the most competitive. They do have a tiered rate structure, but it only varies by a few basis points from their $1,000 minimum to their jumbo CD offering. Any body have experience with this bank, please leave a comment.

cd :O)

Update: 06/28/11 - We did end up being contacted by an agency that is handling ads for the bank and we are hosting those ads. So although we aren't being paid for this review directly, we are paid for the referrals that we send. Hopefully, though you will still find this an unbiased commentary.