AboutJim Meadows Expertise I can respond to most questions concerning consumer and business relationships with US financial institutions. My expertise touches on deposit and loan issues and particularly on strategies to navigate through bank policies personell and practices. I have a degree in Economics, attended law school, Graduate Shool of Banking, and Commercial Lending and Compliance Schools.
Experience I have twenty years experience as a bank CEO. Most of those years were spent operating a bank focused primarly on serving consumer/retail needs. I helped pioneer deposit and loan products for low/moderate income individuals. I currently serve on multiple bank boards and am Chairman of a Commercial Bank in Atlanta.
Question I have a 2nd trust deed equity line of credit on my home in the amount of $500,000. In 2007, I used the line and always made payments on time, etc. I paid the line down to 0 in dec 2007 and the small balance of interest in the amount of $8 and change in jan 08. I have used the line at times and repaid as per statements. The line was paid all the way down and not used for 6 month in 2009 until I borrowed $5,000, on 6/01 and repaid the $5,000 the next day. When I receved my statement the interest was calculated at some odd amount (not $5,000 for one day at 3.75% which should be 52 cents). I called customer service and to make a long story short after multiple calls and trips to the branch I was still going back and forth for 3 to 4 months latter and it was still not cleared up properly. Then on the about the 10th? try I was told by a rude customer service manager that I owed interest from Dec 2007 in the amount of $3,089.37. I thought she must be meaning some other person's line of credit as this was a total surprise out of the blue and this was never mentioned over the past 3 - 4 months and was never reflected in any of my statements ever. Again, my line had been paid all the way to zero and borrowed up to limit and paid down again to zero during the 2 years since Dec. 07. Subsequently, they have just sent me a letter for the first time this week which explained that somehow they had messed up and the interest charges were not charged at that time and now they are asking for payment. Not exactly the most timely event - I could have used the interest expense at that time with the business transaction I was using the money for at that time. I see from their letter that they are correct in that they messed up. Is there any provision that allows me some concession for their error or do I have to pay the interest now as discovered? This line of credit is with Washington Mutual Bank which is now Chase. When I go and view my account online The line of credit actually shows a small credit and does not show the amount of interest they are referring to - only the letter of explanation they sent has the reference to the amount owing and my line is frozen at this time. They caught their mistake when they were looking into my complaint of the miscalculation of the interest on the $5,000 for one day. Otherwise, I never new of this missed interest and only wished they had caught their mistake in 2007 so I could have applied it at that time. If it was on my statement of would have paid it a long time ago.
Answer Paul, even though the banks may have managed the accounting of your line poorly, if in fact you owe the balance claimed you are probably better off paying it. You could offer in writing to compromise the amount by offering to pay, say half, but the odds may be against you. By the way, I'm not familiar with the particular practices of Chase but many banks because of pressure to shrink their balance sheets are finding "fine print" reasons to refuse to renew or advance on exsisting HLOC's. Jim
