Charles Schwab Closes Accounts of "Deplorable" Customers from OptionsXpress Brokerage
One bank purchases a smaller bank, then inexplicably closes some accounts belonging to the old banks customers.
December 8, 2017
A merger dragged Optionsxpress Customers into Charles Schwab Bank last month. They had no choice in the matter, as one bank had purchased a smaller bank. Now, some of the customers dragged kicking and screaming into Schwab, are being evicted with no explanation. Some are in danger of being unbanked, or having their credit diminished through no fault of their own.
Charles Schwab bank, the nation's second largest brokerage, has more than ten million customers. Giant banks like Schwab routinely close accounts of persons they decide are undesirable. However, those customers have usually signed account documents accepting the banks power to close their accounts "for any reason.' OptionsXpress customers signed no documents at Schwab bank, however, so it's unclear that the bank has this authority.
In 2011, Schwab acquired OptionsXpress, an online trading platform, paying $1 billion. The two online platforms operated independently for 6 years, but in October, OptionsXpress customers were migrated over into the Schwab brokerage platform. Schwab opened new accounts for Optionsxpress customers.
Now some are being closed by Schwab, with a letter that explains "it was a business decision." We called Michael, who works at the Bank's "Customer Verification and Research Center." He had no further information, noting that "I just work here."
TD Ameritrade has purchased Scottrade Bank, and intends to merge completely with it in March of 2018. Schwab's latest move calls into question whether they will also rid themselves of "the deplorables," leaving consumers with fewer choices.
The Charles Schwab Corporation is a bank and brokerage firm, based in San Francisco, California. It was founded in 1971 by Charles R. Schwab. It is on the list of largest banks in the United States and is one of the largest brokerage firms in the United States. The company provides services for individuals and institutions that are investing online. The company offers an electronic trading platform for the purchase and sale of financial securities including common stocks, preferred stocks, futures contracts, exchange-traded funds, options, mutual funds, and fixed income investments. It also provides margin lending, and cash management services. The company also provides services through registered investment advisers.
Schwab operates in four main divisions: investing, wealth management, banking, and trading. As of December 31, 2016, the company had 10.155 million active client brokerage accounts, with $2.779 trillion in assets. The company operated 335 branches in 46 states, as well as a branch in each of Puerto Rico and London.
We have reached out to Schwab CEO Walter Bettinger for comment on this story.