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  #1  
Old 09-06-2016, 10:21 AM
dire1straits dire1straits is offline
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Default IRA and brokerage accounts

Looks like I'm going to take a plea deal and be out in 3 years with good time..state prison.

I've got an individual retirement account (IRA) at Schwab and I've been reading that eventually they will find out and close my account because they don't want customers with felony convictions...which means an early distribution, penalties, taxes and the money won't keep growing while I'm away.

Has anyone found a felony friendly financial firm that will allow those of us with criminal convictions to have an account with them?

I have stocks in the account so needs to be a brokerage firm like Schwab, Fidelity etc....also, my crime is not financial or fraudulent or stealing.

thanks for all the great info on this board!
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Old 09-06-2016, 01:04 PM
corey1967 corey1967 is offline
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Default Re: IRA and brokerage accounts

Quote:
Originally Posted by dire1straits View Post
Looks like I'm going to take a plea deal and be out in 3 years with good time..state prison.

I've got an individual retirement account (IRA) at Schwab and I've been reading that eventually they will find out and close my account because they don't want customers with felony convictions...which means an early distribution, penalties, taxes and the money won't keep growing while I'm away.

Has anyone found a felony friendly financial firm that will allow those of us with criminal convictions to have an account with them?

I have stocks in the account so needs to be a brokerage firm like Schwab, Fidelity etc....also, my crime is not financial or fraudulent or stealing.

thanks for all the great info on this board!
I did three years with the Feds (released to the street November 2002). Later I started my own business and around 2006 I opened a SEP IRA with the Scottrade brokerage. This is a self-directed retirement account. I have steadily funded it over the years and have not had any problems. Maybe eventually they'll close it. Who knows? If so, I'll take my business elsewhere. There are numerous other brokerages.

On the other hand, Chase Bank closed all of my personal accounts (including my minor daughter's 529 college savings plan) around 2013 presumably due to my criminal conviction (although they never said why). This was inconvenient, but not really much of a problem. I took a cashier's check for the balance of my accounts and walked across the street to the credit union. I've been banking there with no problems ever since, and I am happier with the service at the credit union anyway. Now Chase sends me credit card offers which go straight into the trash.

My suggestion to you would be to simply try it. Open an account with the brokerage of your choice and see what happens. If they close your account, you won't lose your money. Just take your business somewhere else.

Hope this helps.
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  #3  
Old 09-06-2016, 03:19 PM
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if you have a broker or financial advisor, talk with him/her. Find out what their policy is and whether that person can help you by placing a few calls and finding an institution that deals with felons. You can also talk with your bank as more and more banks are offering this sort of service as well.

Good on you to plan ahead and deal with this now, not later.
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Old 09-06-2016, 07:41 PM
CenTexLyn CenTexLyn is offline
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There are plenty of people in prison who have various investment accounts...about once ever month of six weeks, I get a client that has a good-sized account and where they provide the statements for inclusion with materials to the Board.

Do not automatically presume that every brokerage is going to say they no longer want your business. If they do, then you take their FBO check and immediately roll it into an account elsewhere...no tax consequences should exist in that scenario. I base THAT claim on my own personal experience of changing where I had accounts parked...
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Old 09-07-2016, 08:46 PM
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Quote:
Originally Posted by dire1straits View Post
Looks like I'm going to take a plea deal and be out in 3 years with good time..state prison.

I've got an individual retirement account (IRA) at Schwab and I've been reading that eventually they will find out and close my account because they don't want customers with felony convictions...which means an early distribution, penalties, taxes and the money won't keep growing while I'm away.

Has anyone found a felony friendly financial firm that will allow those of us with criminal convictions to have an account with them?

I have stocks in the account so needs to be a brokerage firm like Schwab, Fidelity etc....also, my crime is not financial or fraudulent or stealing.

thanks for all the great info on this board!
You should have no problem at all doing a trustee-to-trustee transfer.

Almost all banks have a brokerage arm of some sort that can hold securities.

It's hard for me to imagine that a firm would just close your account, sell your securities, and cut you a check. You could always read the fine print about what they have to do if they don't want your business anymore.
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  #6  
Old 09-08-2016, 01:08 PM
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Originally Posted by corey1967 View Post
On the other hand, Chase Bank closed all of my personal accounts (including my minor daughter's 529 college savings plan) around 2013 presumably due to my criminal conviction (although they never said why).
Wow, Chase is really hostile. I posted in that other "rebuilding your credit" thread about how Chase is the only bank I've dealt with that apparently has me blacklisted from opening any credit accounts they manage, like through Amazon.com.

I originally just assumed it was because I defaulted on a Chase credit card 12 years ago, but now I'm beginning to wonder if it's because of my criminal record and the fact that I was in prison when they tried to unsuccessfully collect way back when.

Screw them indeed. We can take our business to a much more friendly credit union instead.
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Old 09-09-2016, 02:50 PM
dire1straits dire1straits is offline
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thanks for the suggestions! thought I would post some more detail for anyone else that may run into this...if you google "brokerage account felon" or something similar you will see some experiences that folks are having with financial firms closing their accounts.

I can't find the article, but the reason cited is that the internet age has made criminal checks as easy and common as credit reports...so now financial firms will know about criminal backgrounds just as easily as they run credit reports on people...and within about six months they will know if someone is a felon....this seems to be a fairly recent development...within the last year or two

most brokers like schwab and fidelity have clauses in their account agreements that let them close your account for "any reason, any time" and the incidents I've read about when pressed as to why they just say for business purposes or something vague.

i guess the best advice I've seen so far have been to ask the firm first (although they may say no problem and then cancel the account six months later - 'any reason any time") or remove the convicted felon's name from all accounts and just leave in the spouse's name.
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Old 10-21-2017, 10:13 AM
Derek Mack Derek Mack is offline
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Default Brokerage Accounts (Especially IRAs) for Felons

Is anyone aware of any brokerage company that lets felons keep their accounts (especially IRAs)?

I was recently sentenced for a felony and just got notice that TD Ameritrade wants to close my IRA.
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  #9  
Old 10-21-2017, 10:46 AM
CenTexLyn CenTexLyn is offline
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Originally Posted by Derek Mack View Post
Is anyone aware of any brokerage company that lets felons keep their accounts (especially IRAs)?

I was recently sentenced for a felony and just got notice that TD Ameritrade wants to close my IRA.
I have a few that are still with Edward Jones. I would have to pull files to see who else was being used. Much of the willingness of a company to do business may have to do with the nature of the offense AND the amount in the account...it is a lot easier to tell someone NO when there is only ten or fifteen thousand at play versus the client who has low seven figures...
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Old 10-21-2017, 11:46 AM
fbopnomore fbopnomore is offline
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The prior military member's best friend (you are eligible for life) USAA, will cancel vehicle, homeowner's, etc. insurance for anyone who served prison time for a crime. They may also provide you with a less than accurate reason for the cancellation, like "get rid of your dog" or "we aren't cancelling your insurance, we just won't let you renew it". Apparently a criminal record isn't enough justification for the insurance regulators to allow the cancellation of zero claim insurance coverage, otherwise they would have admitted why they were kicking me out.

The only issue I have had with anyone over my criminal conviction was with USAA.
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Old 10-21-2017, 03:04 PM
GaReform GaReform is offline
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That is so bizarre! I never even considered that they would have a problem with taking your money. Now if your crime was money laundering or embezzlement then maybe it might make some sort of weird sense. I guess they don't mind taking money from crooked business people or politicians but heaven forbid that a CRIMINAL would want to have an account with them.
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Old 10-21-2017, 03:10 PM
CenTexLyn CenTexLyn is offline
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That is so bizarre! I never even considered that they would have a problem with taking your money. Now if your crime was money laundering or embezzlement then maybe it might make some sort of weird sense. I guess they don't mind taking money from crooked business people or politicians but heaven forbid that a CRIMINAL would want to have an account with them.
Given the manner by which the Courts can attach funds, many financial institutions simply decided that it is easier to cut ties than it is to have to fund positions to do nothing more than deal with the attachment orders.
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Old 10-21-2017, 07:53 PM
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This is concerning to me.... our wealth management team know of the conviction—they cut the check for restitution off our acct. we are with Charles Schwab. Seriously, can this felony conviction really affect our insurance policies, local bank Accts, and investment Accts? The conviction has nothing to do with drugs and there is a complete paper trail of where our money was earned....does that make any difference?
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Old 10-21-2017, 09:18 PM
rockchalk1 rockchalk1 is offline
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Default Insurance

My husband is SS before the end of the year. In re to insurance (as mentioned above), while we don't have USAA, I had read online that it can happen if you cancel auto insurance you may have trouble getting insurance once they get out. I was wondering if that's true? I'm debating just keeping him on the insurance so that this is not an issue when he gets out. It seems easier than to call my insurance company (Geico) and tell them he's in prison and risk being dinged somehow for that, and then have them boot us altogether or deem us as high risk when he's out and or whatever and not insure us. Has anyone had any kind of problem like this.

Also, what about health insurance? Fortunately, I can remove him off our health insurance just in time at year-end, but what happens when he comes home in the middle of the year? How do I add him back to my policy? Do I need to do it effective Jan 1 of the year he comes home, hence pay for extra months? Trying to get our ducks in row before he leaves.
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Old 10-21-2017, 11:40 PM
MrsDeeKay MrsDeeKay is offline
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My auto insurance recently went up (almost doubled) mid-policy...it went from $340 to $600....they claimed it was due to a non-auto claim through another company. My husband was hunting and his CanAm hit a rut on top of a levy and he flipped down the levy into a lake. It is not something that would show up on his MVR(motor vehicle record).
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Old 10-22-2017, 05:16 AM
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You may, or may not run into problems because of his conviction. Chances are that your "wealth management" accounts will be fighting to keep you as a customer.

So many completely unpredictable "might, but probably won't" problems could arise, but I try not to borrow trouble, so the only way I will get involved is if something actually goes wrong.
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Old 10-22-2017, 05:41 AM
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Quote:
Originally Posted by MrsDeeKay View Post
My auto insurance recently went up (almost doubled) mid-policy...it went from $340 to $600....they claimed it was due to a non-auto claim through another company. My husband was hunting and his CanAm hit a rut on top of a levy and he flipped down the levy into a lake. It is not something that would show up on his MVR(motor vehicle record).
It might not be on the usual MVR reports but it WOULD be on the CLUE report if he had filed a claim with any other underwriting entity... https://personalreports.lexisnexis.c...ms/landing.jsp

The problem here that may lend to a complaint with State regulators is the change of premium mid-term. You need to look at both the terms of the policy and current State law to see if that is permissible. In MOST places, the premium quoted at the beginning of the term is what you are going to pay...they can jack the rate or non-renew at the expiration of the term, but not change it mid-term.

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Old 05-14-2018, 03:10 PM
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Default Financial Instutions and Felony Convictions-Close Accounts

Like some other threads...I had been with Chase for over 4 years with no issues. Then all of a sudden I couldn't check out at a grocery store with my debit card...turns out Chase had frozen all our accounts without giving a reason and closed them. No explanation given (branch people are clueless). This is actually the 2nd time that has happened. Not to mention Fidelity all of a sudden closing my retirement account (due to my 'past activities' as they called it in a letter). Then I was a co-trustee on my Mother's account who has dementia..and that firm all of a sudden wanted me off (for a white collar tax crime 5 years ago with no prison time). So the way the world is a 'felony' no matter how small is a life sentence it appears in the financial world; you just have to keep moving around and credit unions are probably much more forgiving. The large institutions are so large they don't care. And people wonder why recidivism rates are so high...what a joke. Make it very hard to get a decent job and now even hard to bank or invest.
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Old 05-14-2018, 03:37 PM
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Fortunately, that E*trade seems to be the only place where he's had the issue. I rolled the IRA over to Ameritrade without issue, I've since opened another IRA for him at Vanguard and have opened a new credit card account for him at Chase since the sentencing, with no issue. He continues to receive pre-approved offers as well but I don't bother with any of those, so for whatever reason that was an odd blip I guess.

It is frustrating though and I agree that for some people, they truly never get a second chance. One suggestion is to have an account that is an LLC that has an FEIN number. That was your social security number isn't affiliated with it and while you can't have an IRA in the name of an LLC, you can have regular investment accounts and they are better asset protected as well, especially if they are TBE's for married people.
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Old 05-14-2018, 03:41 PM
onedayatatime13 onedayatatime13 is online now
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I'm following this because he will need insuramce, a bank acct etc. I'm assuming trying the credit union for a bank acct or maybe capital one 360.

Now for insurance, retirement etc. He has nothing. What do you suggest?
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Old 05-14-2018, 04:23 PM
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A great credit union, also with great interest rates on savings and checking accounts, is Alliant Credit Union. We have used them for years and have been very happy with them. I have an individual account there and then we happen to have our joint account there as well and he has a savings account there too as well as credit card.

As for car insurance, I left him on mine and for health, I will just add him back to mine next January, just before he gets out. I didn't want to take any chances with the car insurance, wasn't worth it, or worth a rate increase if I took him off for being incarcerated then added him back.

I have also heard that if you try to get life insurance for a felon, that is unattainable. We already had it on him, but my girlfriend in the insurance business told me to increase it or we would never get it on him again. In our case, we had no plans to increase it because my husband is 59 and it would be too expensive and we didn't need more coverage, but it's unfortunate for young people/felons who down the line may want to get it and have trouble.
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Old 05-14-2018, 04:26 PM
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A great credit union, also with great interest rates on savings and checking accounts, is Alliant Credit Union. We have used them for years and have been very happy with them. I have an individual account there and then we happen to have our joint account there as well and he has a savings account there too as well as credit card. They also reimburse ATM fees up to $20 each month.

As for car insurance, I left him on mine and for health, I will just add him back to mine next January, just before he gets out. I didn't want to take any chances with the car insurance, wasn't worth it, or worth a rate increase if I took him off for being incarcerated then added him back.

I have also heard that if you try to get life insurance for a felon, that is unattainable. We already had it on him, but my girlfriend in the insurance business told me to increase it or we would never get it on him again. In our case, we had no plans to increase it because my husband is 59 and it would be too expensive and we didn't need more coverage, but it's unfortunate for young people/felons who down the line may want to get it and have trouble.
Alliant also refunds ATM fees up to $20 each month.
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Old 05-14-2018, 07:45 PM
CenTexLyn CenTexLyn is offline
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Alliant also refunds ATM fees up to $20 each month.
If someone is racking up ATM fees, then they are using cash...which has ZERO rewards. Get a decent credit card and become a rewards whore. No ATM fees that way.
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Old 05-14-2018, 08:57 PM
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I agree re the credit card and actually don’t use their ATM/debut card, but many people especially felons can’t qualify for credit. But having said that, for those that do, they have an awesome 3% cash back credit card with no annual fee the first year. After that it’s only $59 a year and 2.5% cash back so it’s still better than even the Citicard 2% cash back card if you spend over $11,800 a year because that’s where you break even on the $59 and extra 1/2%! There are of course the quarterly rebate cards that pay 5% in certain categories that are better during those months but this is great for year round. For instance, I just charged my husband’s tax estimate on it and will get 3% back and only paid a convenience fee of 1.67% plus get the float. The payment won’t even be due until June! Double win!
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