Banks and Credit Unions
Links to Topics below
Opening a bank or credit union account
It is often a good idea to open a bank or credit union account if you can. It is safer and provides many benefits. However, these type of accounts may involve fees and have other requirements. Although banks and similar financial institutions like credit unions may provide similar services, each offers different types of benefits for account holders and borrowers. Financial institutions include savings banks, credit unions, and commercial banks. Commercial banks are not just for businesses; many banks that offer personal checking accounts are considered a commercial bank. Some banks are licensed by states and some by the federal government. More information on state licensed banks can be found at the California Department of Business Oversite. More information on federally licensed savings and commercial banks can be found at HelpWithMyBank.gov while more information on federally licensed credit unions can be found at MyCreditUnion.gov .
Shop around and see who has the best deals, and ask friends and family for recommendations. Think about what’s important to you and what type of account you might need. Ask:
- What types of account are available and how much do they cost?
- What are the requirements for a free account?
- What services does the bank or credit union provide?
- What are the charges for each service?
- Can you decline services that cost money?
You will also need two pieces of identification to open an account, at least one of which should be a government issued identification, such as a passport, driver’s license, or state-issued identification card. You can find out about getting a California photo identification card at DMV website.
Some financial institutions will accept a utility bill for the second piece of identification. Some will also accept foreign identification documents, such as foreign passports or the Matricula Consular card issued by the Mexican government. The financial institution where you want to open your account will tell you what it requires.
A handy checklist on opening an account is at checklist, pdf.
Make sure your account will be insured—Whether it is a state or federally licensed (or chartered) financial institution, you want to ask if it’s a member of, or that is insured by, either the Federal Deposit Insurance Corporation (or FDIC) or, in the case of a credit union, the National Credit Union Association (or NCUA). If the financial institution is a member of the FDIC or NCUA, your account will be insured for up to $250,000 if the financial institution has difficulties. Both federal and state charted financial institutions can be members of the FDIC and the NCUA.
For more information on bank accounts and services visit CFPB Bank Accounts and Services Page.
Debit Cards and ATM Cards
Your credit union or bank might offer you a debit card or ATM card. These cards allow you to transact business with your bank or credit union at ATM machines. You can check your balance, withdraw money, and make deposits. However, be sure to find out what fees are involved in using the card, and at what locations you can use it without charge.
Debit cards look like credit cards and generally can be used anywhere that accepts credit cards. However, instead of borrowing money, your purchase is paid for out of your checking or savings account. As with all other services, check with your financial institution to find out what debit card services it offers and the fees associated with those services. For example, it might seem like a great idea to have the ability to use your debit card even if there’s not enough money in your account, but you might discover that even going a few cents over your balance can result in a $25 or more service charge.
As with your other bank account information protect your card information. Don’t give it out to anyone you don’t know or provide it on the phone unless you initiated the call. This includes your PIN code. Never write your PIN code down on your card or on any papers or statements associated with your card. Ideally, don’t write it down at all—memorize it!
Monitor your account activity online and through your monthly statements, and report unknown charges to your financial institution immediately. This will be a lot easier if you keep copies of your receipts and compare them to your statements. The Federal Trade Commission provides a sample letter for disputing a debit card charge. Keep copies of all correspondence and send by certified mail, return receipt requested. Generally, you must report unauthorized charges within 60 days of the date on the statement containing the invalid charge to avoid being responsible for them.
If you lose your card, report it to your financial institution as soon as possible. If you report it before it is used, you are not responsible for any charges made. In general, your maximum liability for fraudulent use of your debit card is $50; however, if you fail to dispute or report an unauthorized transaction within 60 days of it appearing on your statement, your financial institution may be able to hold you responsible for the charge.
Credit cards lend you money and you go into debt when you use them and may have to pay interest—often at a high rate—on the loan. For information on credit cards go to AG credit card page.
There are also prepaid cards where you load money directly onto the card. These cards are not linked to a savings or checking account. They are not credit cards either, although they might have a credit card company logo, such as “Visa” or “MasterCard” on them. Not all prepaid cards are the same. Each card has its own rules and fees. For more information on prepaid cards go to CFPB Prepaid card page.
Protecting your account and protecting yourself
Your bank account information, like your credit card information, can be used to make charges without your permission. Never:
- Provide your account number to someone if you don’t know who it is.
- Provide your account information over the phone unless you initiated the call.
- Provide your account information in response to an email claiming to be from your bank or credit union—that’s a scam.
If you think a phone call might be legitimate, tell the caller you will contact your bank or credit union and call the phone number listed on your account statement or on the back of your bank card. You can also call the phone number at a website if you know that the site is real.
Monitor your account by reviewing your statements or by going online. If you see account activity that you don’t recognize, contact your financial institution immediately. Keep a record of your call and follow up in writing. Keep a copy of any correspondence you send.
Some Common Scams
Check deposit scams
Sometimes someone will give or mail you a check and ask you to deposit it into your account and give them the money. The check may say it is “certified” or “registered.” The person or company may be purchasing something you are selling, and want to give you a check for a greater amount of money and get the difference in cash. They may tell you they are testing a wire service, and they want you to wire some of the money to them and keep the balance. Don’t do it. Although the check might say it is registered or certified, and although your financial institution might make the money available to you immediately or within one or two business days, the check may be no good and your financial institution will require you to pay back the missing funds. Always wait until your financial institution receives the funds from the other financial institution (the one whose name appears on the check) before giving anyone any money in return for a check. Your financial institution can tell you how long it will take and when the funds are received.
Card insurance scams
Someone contacts you and tries to sell you debit card or credit card insurance, telling you that this will protect you from people using your cards. Don’t buy it. Generally, your responsibility for fraudulent charges on your debit cards or credit cards is $50 as long as you take reasonable steps to notify your issuer. See Debit Cards and ATM Cards and credit card page for more information.
Unauthorized recurring charges
Sometimes you might provide your bank account information (or debit or credit card information) to a company that has offered to send you a product for free if you just pay shipping charges. Or you may be ordering something at a website and you are invited to check a box for a discount, or specials offers, or something similar. But what may be really happening is that the company will claim you “signed up” for regular shipments or some other product or service that entitles the company to charge you every month. Read all the disclosures carefully and dispute the charges as soon as you see them in your statement or online as discussed in the next section.
Joint account scams
Someone offers to assist you with your finances, but says you must open a joint account with them or put them on your account. Be careful. Once someone is on your account, they can withdraw all your money. For more information, visit www.consumerfinance.gov/ask-cfpb/a-financial-planner-offered-to-help-with-my-bill-paying-and-banking-but-said-the-only-way-she-or-he-could-help-is-if-i-opened-a-joint-account-with-both-of-our-names-on-it-is-this-true-en-1147.
You get a call telling you you’ve won a scholarship, or a sweepstakes, or some other cash prize—they just need is your bank account information. Don’t do it! Never give out your bank account information to someone who calls you!
If you have been a victim of these or any other related scams, contact your bank or credit union and file a complaint with the California Attorney General.
Complaints about banks and credit unions
There are different kinds of financial institutions, banks and credit unions, and they may be licensed by the federal government, California, or some other state. This difference can be important, especially if you want to file a complaint, because different financial institutions are regulated by different agencies. Sometimes this information might be in the financial institution’s name. For example, many credit unions and savings banks have those words in their name. If your financial institution does not, it could be a commercial bank. In addition, the name may contain the words “National Bank” or “National Association,” “NA,” or “FSB.” This almost always means that the financial institution is licensed by the federal government and not a state. But the absence of these words does not mean it is a state licensed bank.
Complaints about credit unions
If you are dealing with a credit union, go to Research a Credit Union page. Enter the credit union’s name and check the "Charter State" field. If the field says “CA,” your credit union is chartered in California. That means it is regulated by, and complaints can be filed with the California Department of Business Oversite or DBO.
If the field says "N/A," the credit union is federally chartered. Complaints about federally charted credit unions can be filed with the National Credit Union Administration.
If the field has another two-letter state abbreviation, you can find the appropriate regulator at NASCUS State Regulators. A list of two-letter state abbreviations can be found at https://pe.usps.com/text/pub28/28apb.htm.
Complaints about banks
If your financial institution is not a credit union, a good place to start is the Federal Financial Institutions Examination Council's Consumer Help Center. Type in the financial institution’s name exactly as it appears on your bank statement or other document. If you don’t get a hit, try typing fewer words. If it says that the regulator is the Office of the Controller of the Currency, it is a federal bank, and that is the agency you want to contact. You can and should also contact the Consumer Financial Protection Bureau. If it says that the regulator is the FDIC, it is likely a state-chartered bank. While you can contact the FDIC, you should also search for the financial institution at the California Department of Business Oversight’s website. If the financial institution is listed, it is licensed by the Department and you can file a complaint with the DBO right at this website.