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A trust lesson on banking from a CIBC letter to clients about changes to their GICs
March 28, 2023
10:41 am
Wayno
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A trust lesson on banking from a CIBC letter to clients about changes to their GICs

https://www.theglobeandmail.com/investing/personal-finance/retirement/article-a-trust-lesson-on-banking-from-a-cibc-letter-to-clients-about-changes/

..." banks probably don’t want to repeat the miscalculation Canadian Imperial Bank of Commerce ... made recently. In what should have been an innocuous letter to some of its clients, the bank raised trust issues that reflect on the entire financial industry."

..."The letter was sent last month to outline changes to account agreements for customers holding non-registered guaranteed investment certificates. Here’s the interesting part of the notice, ... “We have added a new section as follows, which allows us to change any term of your agreement with at least 30 days notice. If you do not wish to accept, you can close your account without cost.”...

..."CIBC says the answer is no." [No Change to TERM and RATE !!!!!!]

“These account changes don’t affect the rate or the length of the term of any GICs [customers] hold with us, which we will always honour,” the bank said in an e-mail reply to questions. A spokesperson later added that the bank understands it could have done a better job of communicating with clients."

..."Mary Rygiel of Conservative Investors’ Services checked the account agreements at 10 random GIC issuers she deals with and didn’t find this kind of term or condition. “A deal is a deal!” she said by e-mail."

March 28, 2023
10:57 am
savemoresaveoften
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Wayno said
A trust lesson on banking from a CIBC letter to clients about changes to their GICs

https://www.theglobeandmail.com/investing/personal-finance/retirement/article-a-trust-lesson-on-banking-from-a-cibc-letter-to-clients-about-changes/

..." banks probably don’t want to repeat the miscalculation Canadian Imperial Bank of Commerce ... made recently. In what should have been an innocuous letter to some of its clients, the bank raised trust issues that reflect on the entire financial industry."

..."The letter was sent last month to outline changes to account agreements for customers holding non-registered guaranteed investment certificates. Here’s the interesting part of the notice, ... “We have added a new section as follows, which allows us to change any term of your agreement with at least 30 days notice. If you do not wish to accept, you can close your account without cost.”...

..."CIBC says the answer is no." [No Change to TERM and RATE !!!!!!]

“These account changes don’t affect the rate or the length of the term of any GICs [customers] hold with us, which we will always honour,” the bank said in an e-mail reply to questions. A spokesperson later added that the bank understands it could have done a better job of communicating with clients."

..."Mary Rygiel of Conservative Investors’ Services checked the account agreements at 10 random GIC issuers she deals with and didn’t find this kind of term or condition. “A deal is a deal!” she said by e-mail."  

The globe and mail link is behind a paywall so cant read it.

Essentially as some of us had speculated from day one without a doubt, it is simply NOT possible for CIBC to add a clause that allow them to change a rate and term that is already "agreed" upon when the GIC is booked.

April 23, 2023
11:55 am
rqs
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I had accepted their offer to close the GIC if I didn't agree with their proposed changes. After they rescinded their poposed changes, they refused my acceptance to close. I believe that offer + acceptance = contract and I should be allowed to close. Am I right?

April 24, 2023
12:26 am
Norman1
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According to the CIBC letter bhuc posted, the offer was a right to close the account within 30 days of the changes taking effect, without cost.

One now needs to wait until changes take effect to exercise that right.

April 24, 2023
9:22 am
bhuc
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CIBC has communicated by written notice (snail mail) they are not going ahead with the proposed changes at this time.
And by extension , the offer to close your GIC without cost or penalty has been rescinded.

April 24, 2023
10:20 am
Norman1
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If CIBC is not going ahead with the proposed changes, then it will be a very long wait before that 30-day window begins!

May 20, 2023
10:40 am
rqs
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Not that long.... this squeaky wheel just closed his accounts.

May 20, 2023
11:55 am
Norman1
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Maybe you should also avoid GIC's at EQ Bank as well. Their GIC agreement has always had similar terms, contrary to what that Globe & Mail article says about no other bank having such terms and conditions:

Changes to this GIC Agreement

Changes to this GIC Agreement (including replacing it with another agreement) may be made by us at any time, without prior notice to you, unless advance notice is required by law. When changes are made, notice of the change will be posted on the Message Centre or on the Website. You agree that if you access or have funds on deposit in any GIC, you will be deemed to accept the change. You can obtain a copy of the current GIC Agreement by visiting our Website.

May 20, 2023
12:44 pm
rqs
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Norman1..
I believe you have missed the point. The requested GIC closures were due to low interest rates not because of possible Bank mistrust.

May 21, 2023
4:32 am
bhuc
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rqs said
Not that long.... this squeaky wheel just closed his accounts.  

Out of curiosity did you close any GIC's and if so did you have to forego or repay any accrued interest ?

May 21, 2023
8:15 am
rqs
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Yes and No....They did not want to do it but after some meetings and complaints, it was accomplished.

May 21, 2023
9:41 am
bhuc
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rqs said
Yes and No....They did not want to do it but after some meetings and complaints, it was accomplished.  

Good on you, to be able to make a big6 bank blink .

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