HM Bradley - is it safe - FDIC response

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nisiprius
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Re: HM Bradley - is it safe - FDIC response

Post by nisiprius »

Thanks to the archive.org wayback machine, we can see what Beam Financial Inc. had to say about FDIC insurance as of 8/27/2019:

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Re: HM Bradley - is it safe - FDIC response

Post by anon_investor »

nisiprius wrote: Tue Jul 26, 2022 9:16 pm Thanks to the archive.org wayback machine, we can see what Beam Financial Inc. had to say about FDIC insurance as of 8/27/2019:

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Was Beam pure fraud or gross incompetence? With 6 mo T-Bills over 3%, why take the risk with HM Bradley?
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

anon_investor wrote: Tue Jul 26, 2022 11:00 pm
nisiprius wrote: Tue Jul 26, 2022 9:16 pm Thanks to the archive.org wayback machine, we can see what Beam Financial Inc. had to say about FDIC insurance as of 8/27/2019:
Was Beam pure fraud or gross incompetence? With 6 mo T-Bills over 3%, why take the risk with HM Bradley?
My understanding is everyone got their money back from Beam - so I can't imagine it was fraud...

I completely get people feeling like the "risk premium" (if you will) of HMBradley may not be worth it to them as rates are going up...

For me, maybe I'm completely naive, I'm definitely stubborn :wink:, and lucky enough to not feel worried about losing access to these funds for months if things should implode (as I still believe I'll eventually be made whole)... So, my "risk" view might be skewed...

If/when I can find a better rate that meets my needs, I'll likely reduce my holdings but leave my account open.

I'm really hoping that inflation starts to go down (hopefully sometime soon), and when it does so will things like T-Bills, HYSA, MM's, etc. Assuming HMBradley is still operating with a similar model, they may well return to offering 2% (or more) over what you can easily find elsewhere (as they've done for much of the past two years).
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Re: HM Bradley - is it safe - FDIC response

Post by PicassoSparks »

anon_investor wrote: Tue Jul 26, 2022 11:00 pm Was Beam pure fraud or gross incompetence? With 6 mo T-Bills over 3%, why take the risk with HM Bradley?
This is a good point and it occurs to me that I could just be parking this money in, like, VTIP or some other short term TIPS fund.
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

nisiprius wrote: Tue Jul 26, 2022 9:13 pm
SnowBog wrote: Tue Jul 26, 2022 4:42 pm We've covered this ground before... [HMBradley's direct access to Hatch bank accounts] ... is not an "undocumented" feature...
Apologies, I struck out the relevant part of my posting above.
Well, they give you the account and routing numbers, but they only explicitly say you can ACH deposit, ACH withdrawals aren't promised.
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Re: HM Bradley - is it safe - FDIC response

Post by MikeG62 »

Nuestroro wrote: Tue Jul 26, 2022 6:07 pm I am a fintech lawyer. (Though not yours and I’m not providing legal advice for your specific situation.) The law is this area is not clear. The largest white-shoe law firms aren’t willing to give a legal opinion on what will happen. We’ve asked.

My motive is simply to educate and help people avoid financial distress. Please assume fintech deposits could become locked up for a year.
This should be enough to give pause to even the most ardent fintech bulls.
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

MikeG62 wrote: Wed Jul 27, 2022 10:31 am
Nuestroro wrote: Tue Jul 26, 2022 6:07 pm I am a fintech lawyer. (Though not yours and I’m not providing legal advice for your specific situation.) The law is this area is not clear. The largest white-shoe law firms aren’t willing to give a legal opinion on what will happen. We’ve asked.

My motive is simply to educate and help people avoid financial distress. Please assume fintech deposits could become locked up for a year.
This should be enough to give pause to even the most ardent fintech bulls.
Personally, I've been clear that doesn't bother me, given the way I use this account/funds (and with the understanding that I'll eventually get my money back).

Ultimately, it's all relative...

We bought $45k of I Bonds this year that we can't touch for a year.

We bought another $40k of I Bonds as gifts, the last $20k we couldn't touch for one and a half years from purchase. We may end up buying another $20-40k yet this year, which couldn't be touched for 2.5 - 4.5 years.

By year end we'll have added over $40k to our 401k(s), which (without a bunch of hoops) we can't touch for another 14 years.

My 20 something niece won't be able to touch their 401k contributions for 30+ years.
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

VMFXX going to 2.25% in 3...2...1...
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Re: HM Bradley - is it safe - FDIC response

Post by anon_investor »

Vulcan wrote: Wed Jul 27, 2022 12:01 pm VMFXX going to 2.25% in 3...2...1...
Does this mean you will be exiting HM Bradley?
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Re: HM Bradley - is it safe - FDIC response

Post by MikeG62 »

SnowBog wrote: Wed Jul 27, 2022 11:33 am
MikeG62 wrote: Wed Jul 27, 2022 10:31 am
Nuestroro wrote: Tue Jul 26, 2022 6:07 pm I am a fintech lawyer. (Though not yours and I’m not providing legal advice for your specific situation.) The law is this area is not clear. The largest white-shoe law firms aren’t willing to give a legal opinion on what will happen. We’ve asked.

My motive is simply to educate and help people avoid financial distress. Please assume fintech deposits could become locked up for a year.
This should be enough to give pause to even the most ardent fintech bulls.
Personally, I've been clear that doesn't bother me, given the way I use this account/funds (and with the understanding that I'll eventually get my money back).

Ultimately, it's all relative...

We bought $45k of I Bonds this year that we can't touch for a year.

We bought another $40k of I Bonds as gifts, the last $20k we couldn't touch for one and a half years from purchase. We may end up buying another $20-40k yet this year, which couldn't be touched for 2.5 - 4.5 years.

By year end we'll have added over $40k to our 401k(s), which (without a bunch of hoops) we can't touch for another 14 years.

My 20 something niece won't be able to touch their 401k contributions for 30+ years.
It’s obviously a personal choice, but equating your money being tied up in a bankrupt fintech to funds in your 401K or your I Bonds seems like a bridge too far to me. But to each their own.
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

anon_investor wrote: Wed Jul 27, 2022 12:07 pm
Vulcan wrote: Wed Jul 27, 2022 12:01 pm VMFXX going to 2.25% in 3...2...1...
Does this mean you will be exiting HM Bradley?
Already on my way
If you torture the data long enough, it will confess to anything. ~Ronald Coase
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Re: HM Bradley - is it safe - FDIC response

Post by anon_investor »

Vulcan wrote: Wed Jul 27, 2022 12:12 pm
anon_investor wrote: Wed Jul 27, 2022 12:07 pm
Vulcan wrote: Wed Jul 27, 2022 12:01 pm VMFXX going to 2.25% in 3...2...1...
Does this mean you will be exiting HM Bradley?
Already on my way
Just going all to VMFXX?
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

MikeG62 wrote: Wed Jul 27, 2022 12:07 pm
SnowBog wrote: Wed Jul 27, 2022 11:33 am
MikeG62 wrote: Wed Jul 27, 2022 10:31 am
Nuestroro wrote: Tue Jul 26, 2022 6:07 pm I am a fintech lawyer. (Though not yours and I’m not providing legal advice for your specific situation.) The law is this area is not clear. The largest white-shoe law firms aren’t willing to give a legal opinion on what will happen. We’ve asked.

My motive is simply to educate and help people avoid financial distress. Please assume fintech deposits could become locked up for a year.
This should be enough to give pause to even the most ardent fintech bulls.
Personally, I've been clear that doesn't bother me, given the way I use this account/funds (and with the understanding that I'll eventually get my money back).

Ultimately, it's all relative...

We bought $45k of I Bonds this year that we can't touch for a year.

We bought another $40k of I Bonds as gifts, the last $20k we couldn't touch for one and a half years from purchase. We may end up buying another $20-40k yet this year, which couldn't be touched for 2.5 - 4.5 years.

By year end we'll have added over $40k to our 401k(s), which (without a bunch of hoops) we can't touch for another 14 years.

My 20 something niece won't be able to touch their 401k contributions for 30+ years.
It’s obviously a personal choice, but equating your money being tied up in a bankrupt fintech to funds in your 401K or your I Bonds seems like a bridge too far to me. But to each their own.
I understand the difference between "what could happen" vs. "what will happen".

Could HMBradley fail? Of course. Every business can fail, even those people think are "too large to fail".

If HMBradley fails, does that mean my money is absolutely tied up for a year? Not necessarily, and maybe I'm optimistic but I'd like to think not likely.

Is it possible that my money could end up tied for months, maybe even a year+? Sure. But I make the same assumption about a local bank. Again, let's say the local bank president steals all my money and flees the country, and the bank is unable to pay me back. Presumably the courts and/or regulators might end up involved, maybe the bank is ultimately forced to declare bankruptcy, and as a result I'd be made whole from the FDIC. Granted this is an unlikely situation, but that's the point... We can imagine all sorts of worst case scenarios if we want to play the "what if" game...

I'd also add that Nuestroro is an anonymous user on an internet forum who claims they are a FinTech lawyer. I'd like to believe they are, as I generally assume people are being honest and helpful (especially here). But they've provided no supporting evidence, and even the failure Beam wasn't nearly 1 year for people to get their money back, and their users didn't have direct access to the underlying bank accounts. So based on precedent, the 1 year seems possible but unlikely.
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Re: HM Bradley - is it safe - FDIC response

Post by vbdoug »

After evaluating this thread I am convinced T bills are a wiser investment than HM Bradley. I pulled out 90k yesterday and it all ready shows up in my Chase account [and from there on to Vanguard]. HM Bradley served me well.
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Re: HM Bradley - is it safe - FDIC response

Post by anon_investor »

vbdoug wrote: Wed Jul 27, 2022 12:38 pm After evaluating this thread I am convinced T bills are a wiser investment than HM Bradley. I pulled out 90k yesterday and it all ready shows up in my Chase account [and from there on to Vanguard]. HM Bradley served me well.
Which T-Bills will you be buying? 6 month?
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Re: HM Bradley - is it safe - FDIC response

Post by vbdoug »

My plan is to purchase either a 6 month or a 1 year term.
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

anon_investor wrote: Wed Jul 27, 2022 12:19 pm
Vulcan wrote: Wed Jul 27, 2022 12:12 pm
anon_investor wrote: Wed Jul 27, 2022 12:07 pm
Vulcan wrote: Wed Jul 27, 2022 12:01 pm VMFXX going to 2.25% in 3...2...1...
Does this mean you will be exiting HM Bradley?
Already on my way
Just going all to VMFXX?
At the end of the quarter.
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Re: HM Bradley - is it safe - FDIC response

Post by PicassoSparks »

SnowBog wrote: Wed Jul 27, 2022 12:30 pm Is it possible that my money could end up tied for months, maybe even a year+? Sure. But I make the same assumption about a local bank. Again, let's say the local bank president steals all my money and flees the country, and the bank is unable to pay me back. Presumably the courts and/or regulators might end up involved, maybe the bank is ultimately forced to declare bankruptcy, and as a result I'd be made whole from the FDIC. Granted this is an unlikely situation, but that's the point... We can imagine all sorts of worst case scenarios if we want to play the "what if" game...
This is not for your sake. You have said clearly that you are comfortable with the risks and are happy to accept that your money could by tied up in bankruptcy proceedings. I wish you luck. This is for anyone else reading the thread and trying to follow along.

As best I can understand, the scenario outlined above is not how things play out with FDIC insurance and regulated banks. I've pieced it together from a few different sources and I am not a lawyer and not a financial expert.

If an FDIC-insured bank fails, your money is not tied up for the duration of the courts working things out. The FDIC aims to assure liquidity to depositors. From their FAQ (emphasis added).
Historically, the FDIC pays insurance within a few days after a bank closing, usually the next business day, by either 1) providing each depositor with a new account at another insured bank in an amount equal to the insured balance of their account at the failed bank, or 2) issuing a check to each depositor for the insured balance of their account at the failed bank.
The reason for this is that the main purpose of FDIC insurance is to prevent 'runs' on banks which begin when people suspect there might be a problem with the bank. Runs can be contagious and destabilize the entire industry. So what's being insured is not only the amount on deposit but also the liquidity of the deposit. The promise is: "Whatever your concerns about the specifics of this particular insured bank, we will make you whole quickly and with the full faith and credit of the US government."

How is this possible? Banks are heavily regulated. The regulators don't only show up like a disaster clean-up crew or your home insurance agency. They are proactive. They are working with banks on a regular (heh) basis. This section from the bits about money newsletter offers some narrative flair.
How to ensure that the money is there on Monday? Well, the bank didn’t fail in a day. It has been making bad loans for years. Its supervisors (regulators) have almost certainly noticed its deteriorating health for a while. They told the bank to correct its loan practices and raise more capital. That didn’t happen.

So eventually, on a Friday, the supervisor (which is not the FDIC) tells the bank that it has failed. Concurrently with this, the FDIC swings into action. The micro-mechanics of this are fascinating; they resemble a police raid on the bank headquarters except mostly conducted by people who look like accountants (and in some cases, are).

That action is, in almost all cases, selling the deposits and assets of the bank to another financial institution. Banks benefit from scale. This is a core reason that they open new branches at the margin. The FDIC’s proposal is “Hey, a bunch of perfectly good branches with perfectly good bankers just came on the market. They’ve also got some assets and… well… nobody gets here if the assets are also perfectly good. But almost any pile of assets is good at the right price. Let’s make a deal.”
(Follow the link for more about what happens next. It's a fascinating process.)

What if the bank president embezzles? The FDIC doesn't cover that.
Robberies and Other Thefts
Stolen funds may be covered by what's called a banker's blanket bond, which is a multi-purpose insurance policy a bank purchases to protect itself from fire, flood, earthquake, robbery, defalcation, embezzlement and other causes of disappearing funds. In any event, an occurrence such as a fire or bank robbery may result in a loss to the bank but should not result in a loss to the bank's customers.
The FDIC insurance is a final backstop on a whole host of regulations and guardrails designed to keep regulated banks in line. The protections to the liquidity of deposits in a regular regulated bank are considerably higher and more sophisticated that I'd realized and than SnowBog seems to realize. Fintechs are not subject to the same constraints or oversight that govern regular banks and that frees them up to innovate in all kinds of exciting ways but also to create all sorts of exciting precedent-setting case law.

I come away from this mini research expedition with about the same level of trust as SnowBog that any money you have in HMBradley would mostly be returned to you eventually in the case of a problem. But I come away far more impressed with the amount of infrastructure behind securing FDIC insured deposits in ordinary banks. HMB is much less bank-like than I'd first come to appreciate because I didn't really understand banks.
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

My HMBradley monthly statement lists my Hatch Bank account number (that I used to direct deposit a portion of each paycheck into) and "Powered by Hatch Member FDIC" wording.

I am not sure what it means in terms of FDIC protection legally speaking, but I am not terribly concerned.

It's just that the hoops are no longer worth it with the latest rate hike.

Got the card cancelled and the transfer to VMFXX scheduled at the end of the quarter.
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Re: HM Bradley - is it safe - FDIC response

Post by patrick »

PicassoSparks wrote: Wed Jul 27, 2022 1:28 pm
SnowBog wrote: Wed Jul 27, 2022 12:30 pm Is it possible that my money could end up tied for months, maybe even a year+? Sure. But I make the same assumption about a local bank. Again, let's say the local bank president steals all my money and flees the country, and the bank is unable to pay me back. Presumably the courts and/or regulators might end up involved, maybe the bank is ultimately forced to declare bankruptcy, and as a result I'd be made whole from the FDIC. Granted this is an unlikely situation, but that's the point... We can imagine all sorts of worst case scenarios if we want to play the "what if" game...
This is not for your sake. You have said clearly that you are comfortable with the risks and are happy to accept that your money could by tied up in bankruptcy proceedings. I wish you luck. This is for anyone else reading the thread and trying to follow along.

As best I can understand, the scenario outlined above is not how things play out with FDIC insurance and regulated banks. I've pieced it together from a few different sources and I am not a lawyer and not a financial expert.

If an FDIC-insured bank fails, your money is not tied up for the duration of the courts working things out. The FDIC aims to assure liquidity to depositors. From their FAQ (emphasis added).
Historically, the FDIC pays insurance within a few days after a bank closing, usually the next business day, by either 1) providing each depositor with a new account at another insured bank in an amount equal to the insured balance of their account at the failed bank, or 2) issuing a check to each depositor for the insured balance of their account at the failed bank.
There isn't a guarantee of next-day availability from the FDIC. I can think of a couple of ways it might not happen:

If one of the top 4 banks fails, it could be difficult to arrange a takeover that quickly. This is especially likely if more than one of them fails in rapid succession.

If the failed bank has severe problems with recordkeeping, it could take a long time to work out how much money each depositor should get. Recordkeeping problems could also impair access to funds for a while even if the bank is still solvent.

That said, I have already transferred my funds from HMBradley into TIPS. However much a risk of HMBradley's failure may be, that risk wasn't my reason for withdrawing, and definitely didn't how up for me. A year ago, HMBradley they were paying 3.5% while nominal treasuries were 1.89% at the highest. Under the assumption that TIPS would have similar expected return to nominal treasuries, I presumed the 1.61% yield premium at HMBradley was decent compensation for inflation risk. That yield premium is now gone.
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Re: HM Bradley - is it safe - FDIC response

Post by MrJedi »

I've also noted that the interest paid also comes from Hatch Bank directly, as shown by the 1099-INT forms I've gotten the past couple years. The deposit account agreement also explicitly says the account is from Hatch Bank and that you are opening the account with Hatch Bank. Combine all of that with the routing number I use to transfer funds in/out is Hatch Bank, and I have no doubt that the funds are held there.

Disclosure: I no longer hold any funds there because the rates are no longer competitive for me given the extra hoops. I had no problem putting large amounts in there before though.
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Re: HM Bradley - is it safe - FDIC response

Post by nisiprius »

If you have an actual bank account, held directly at an FDIC-insured bank, and the bank fails, your money is not tied up. Or, at least, this was not the case when I had money in an NCUA-insured credit union that failed, nor was it the case when a colleague of mine had money in an FSLIC-insured savings & loan that failed.

In both cases, it was truly a nonevent.

In my case, the credit union had one sign over the door on Friday, and when I came in to work on Monday I noted there was another sign over the door, and a stack of handouts. The next statement I received had a different logo printed at the top. It had been taken over by different credit union. Although I guess it isn't always the case, our CD ladder, which at the time represented important money for us, kept the same interest rates (and account numbers). It wasn't even an inconvenience.

The issue with these fintechs is that you have an indirect relationship with the FDIC-insured bank. In the case of HMBradley, you apparently do have an individual direct channel to the bank that holds your deposits. Nuestroro raised the possibility that despite this, the business relationships between a hypothetically bankrupt HMBradley and its creditors might somehow interfere with that. (I'm thinking creditors might have blanket objection to any assets leaving the HMBradley orbit).

The point here is that a) every fintech and its exact relation with the bank that is "backing it up" is different; b) analyzing that relationship is complicated; c) that relationship could change. For example, if I recall correctly, HMBradley at one point implied that they might place customers' funds with a network of different banks, rather than always placing them with an individually identifiable and directly accessible account at Hatch Bank. Apparently they didn't. If I'm wrong, I apologize, but the point is still valid.

An account directly at an FDIC insured actual it-really-is-a-bank is a known quantity, with a many-decade history of depositors not being hurt when a bank fails.

An account with one of this "we are not a bank, we are a fintech that provides banking services by using a bank" is something new, and legitimately suspect. Beam Financial was not OK, despite the "FDIC" language. The fintechs are introducing an extra layer of risk, and they are so new that it is hard to appraise that risk. You need to be a "fintech lawyer" to appraise the risk accurately. It is not the same as a bank account. You don't need an FDIC lawyer.
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

nisiprius wrote: Wed Jul 27, 2022 4:17 pm The point here is that a) every fintech and its exact relation with the bank that is "backing it up" is different; b) analyzing that relationship is complicated; c) that relationship could change. For example, if I recall correctly, HMBradley at one point implied that they might place customers' funds with a network of different banks, rather than always placing them with an individually identifiable and directly accessible account at Hatch Bank. Apparently they didn't. If I'm wrong, I apologize, but the point is still valid.

An account directly at an FDIC insured actual it-really-is-a-bank is a known quantity, with a many-decade history of depositors not being hurt when a bank fails.
Great insight - and completely agree! And again why I have a level of comfort with how I understand HMBradely is approaching things vs. some other generic FinTech who isn't setup the same way... Again, HMBradley could disappear tomorrow - but as far as I know my money remains on deposit at Hatch and I can withdraw it at any time (again baring the involvement of the courts to impose otherwise).

One minor clarification, HMBradley/Hatch does use a network of banks. More specifically, this is all handled by Hatch, as I understand it HMBradley has nothing to do with it operationally speaking (other than processing requests if you want to exclude a specific bank to stay under FDIC insurance levels).

So, in this sense, Hatch is doing the exact same thing as UMB does with Fidelity's CMA. The money is all "within" the FDIC banking system at all times.

Bottom line - everyone should do their due diligence! I've done mine, and I feel comfortable with what I've found. If others feel otherwise, that's their prerogative.
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Re: HM Bradley - is it safe - FDIC response

Post by JBTX »

SnowBog wrote: Wed Jul 27, 2022 4:56 pm
nisiprius wrote: Wed Jul 27, 2022 4:17 pm The point here is that a) every fintech and its exact relation with the bank that is "backing it up" is different; b) analyzing that relationship is complicated; c) that relationship could change. For example, if I recall correctly, HMBradley at one point implied that they might place customers' funds with a network of different banks, rather than always placing them with an individually identifiable and directly accessible account at Hatch Bank. Apparently they didn't. If I'm wrong, I apologize, but the point is still valid.

An account directly at an FDIC insured actual it-really-is-a-bank is a known quantity, with a many-decade history of depositors not being hurt when a bank fails.
Great insight - and completely agree! And again why I have a level of comfort with how I understand HMBradely is approaching things vs. some other generic FinTech who isn't setup the same way... Again, HMBradley could disappear tomorrow - but as far as I know my money remains on deposit at Hatch and I can withdraw it at any time (again baring the involvement of the courts to impose otherwise).

One minor clarification, HMBradley/Hatch does use a network of banks. More specifically, this is all handled by Hatch, as I understand it HMBradley has nothing to do with it operationally speaking (other than processing requests if you want to exclude a specific bank to stay under FDIC insurance levels).

So, in this sense, Hatch is doing the exact same thing as UMB does with Fidelity's CMA. The money is all "within" the FDIC banking system at all times.

Bottom line - everyone should do their due diligence! I've done mine, and I feel comfortable with what I've found. If others feel otherwise, that's their prerogative.
Best I can tell this is no different than T mobile money and has many of the same characteristics is fidelity cash management. But we aren’t seeing a half dozen threads of people hypothesizing their inevitable demise.

This all started when they came out and offered 3%, with hoops, which smacked of being too good to be true, and people started dreaming up ways this will fail.

I can completely understand people’s hesitancy given this is new and on the surface different. What is frustrating is people decide it isn’t for them, which is fine, then start creating a lot of theoretical hypotheticals, or comparing them to things they are not, like Beam.

When everything associated with the account says Hatch bank, the routing number is hatch bank, and the ach transfers say hatch bank I feel pretty good it is hatch bank.

But now with rates up it’s arguably not worth the trouble. Just liquidated most of mine today.
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Re: HM Bradley - is it safe - FDIC response

Post by ChiKid24 »

Just got an email from HMB that they are eliminating the credit card annual fee. Anyone who paid one in 2022 will get a credit to their account. Bad news is they are moving to a flat 1.5% cash back. So no more 3% or 2% tiers. Still worth it to me for the bonus boost to 3% on my savings account. I'll continue to charge the minimum each month on the credit card to qualify.
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Re: HM Bradley - is it safe - FDIC response

Post by frugalor »

At this point, HMBradley is just a normal soso checking account. I am moving my money to T-Bill ladder, and use Sofi as my primary checking account.
nolesrule
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Re: HM Bradley - is it safe - FDIC response

Post by nolesrule »

ChiKid24 wrote: Fri Aug 12, 2022 12:37 pm Just got an email from HMB that they are eliminating the credit card annual fee. Anyone who paid one in 2022 will get a credit to their account. Bad news is they are moving to a flat 1.5% cash back. So no more 3% or 2% tiers. Still worth it to me for the bonus boost to 3% on my savings account. I'll continue to charge the minimum each month on the credit card to qualify.
I was chargimg more than the minimum as I had switched over a category of spend from my 2% card to get the 3%. Now I'll be looking at finding a monthly recurring charge that just barely exceeds the minimum needed to maintain the boost.
ossipago
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Re: HM Bradley - is it safe - FDIC response

Post by ossipago »

HM Bradley didn't categorize my direct deposit from a new employer correctly.

I don't have their card. I couldn't be bothered to call them and fix it, just transferred my money out and will buy T-bills.
SnowBog
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

nolesrule wrote: Fri Aug 12, 2022 1:05 pm
ChiKid24 wrote: Fri Aug 12, 2022 12:37 pm Just got an email from HMB that they are eliminating the credit card annual fee. Anyone who paid one in 2022 will get a credit to their account. Bad news is they are moving to a flat 1.5% cash back. So no more 3% or 2% tiers. Still worth it to me for the bonus boost to 3% on my savings account. I'll continue to charge the minimum each month on the credit card to qualify.
I was chargimg more than the minimum as I had switched over a category of spend from my 2% card to get the 3%. Now I'll be looking at finding a monthly recurring charge that just barely exceeds the minimum needed to maintain the boost.
+1

For normal monthly spend, I the BoA Preferred card with 2.625% (after bonus), so the 0.3x% I'll lose, on the small amount I changed, won't be a big loss... And is likely largely offset by dropping the annual fee...

The one place this may "hurt" is with how I managed the balance in the account. In particular, since the CC payment doesn't count as a "withdrawal", I could shift spend to their CC to essentially "withdraw" that much (by not having that much pulled out of my checking account). A few times I got lucky with this being a big ticket item that hit the 3%. But sometimes it was a few things in different categories, which pushed my average rate down, probably higher than 1.5% (as I rarely had three categories).

Not the end of the world.

And as I've stated before, I'm quite unexpectedly happy with how things have worked out at HMBradley.

Sure, others are finally starting to have better rates, and things like T-Bills might even have better rates. And to be blunt, if FZDXX gets above 3%, I'll likely move my money out of HMBradley (at least not return my next quarterly withdrawal). But I don't expect (ok hope) that rates don't stay high for long, so I'm expecting the other options to return to paying much less than HMBradley at some point.
SnowBog
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

ossipago wrote: Fri Aug 12, 2022 1:17 pm HM Bradley didn't categorize my direct deposit from a new employer correctly.

I don't have their card. I couldn't be bothered to call them and fix it, just transferred my money out and will buy T-bills.
Did you try chat?

Seems like I had an issue with mine as well. IIRC took like 2 min via chat to fix... But that was over a year ago...
ossipago
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Re: HM Bradley - is it safe - FDIC response

Post by ossipago »

SnowBog wrote: Fri Aug 12, 2022 3:09 pm
ossipago wrote: Fri Aug 12, 2022 1:17 pm HM Bradley didn't categorize my direct deposit from a new employer correctly.

I don't have their card. I couldn't be bothered to call them and fix it, just transferred my money out and will buy T-bills.
Did you try chat?

Seems like I had an issue with mine as well. IIRC took like 2 min via chat to fix... But that was over a year ago...
Not trying to be petty, but one of the reasons I was ok dealing with the extra risk from HM Bradley was the assumption it would be a tech-forward, streamlined interaction. The more hurdles they have put in place and the more issues that arise, the less I feel like dealing with them. And in any case, I already took my money out.
MrJedi
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Re: HM Bradley - is it safe - FDIC response

Post by MrJedi »

I was an early user back in 2020 and my first direct deposit didn't code correctly. I sent them a support message via email and the next day they had it fixed. After that all subsequent direct deposits from the same employer were automatically tagged correctly. As a newer company I would expect some manual fixes would need to be made here and there as new employers showed up on their system.

Disclaimer: I no longer keep any significant funds at HMB due to competitive rates elsewhere with less hoops.
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Vulcan
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

Vulcan wrote: Wed Jul 27, 2022 2:52 pm My HMBradley monthly statement lists my Hatch Bank account number (that I used to direct deposit a portion of each paycheck into) and "Powered by Hatch Member FDIC" wording.

I am not sure what it means in terms of FDIC protection legally speaking, but I am not terribly concerned.

It's just that the hoops are no longer worth it with the latest rate hike.

Got the card cancelled and the transfer to VMFXX scheduled at the end of the quarter.
Here's to Fed's impeccable timing :beer
If you torture the data long enough, it will confess to anything. ~Ronald Coase
jst
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Re: HM Bradley - is it safe - FDIC response

Post by jst »

For sure I'll use next quarter to take the >$100K cash out of this account and just coast.

Assuming nothing changes with them, I'll have to redeploy that $100K on 1/1/23 and consider whether to put in the work to qualify during Q1 2023 for Q2.
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Vulcan
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

Vulcan wrote: Wed Sep 21, 2022 1:50 pm Here's to Fed's impeccable timing :beer
With DollarSavingsDirect now paying 3.0% APR I am emptying out my HMBradley holdings a few days ahead of schedule.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
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PicassoSparks
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Re: HM Bradley - is it safe - FDIC response

Post by PicassoSparks »

That is the sketchiest looking website for a bank I have ever seen. From a bit of looking it seems legit, but it has the graphic design of a scam email. Wild.
SnowBog
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

PicassoSparks wrote: Mon Sep 26, 2022 8:40 am That is the sketchiest looking website for a bank I have ever seen. From a bit of looking it seems legit, but it has the graphic design of a scam email. Wild.
LOL. That was almost exactly my thoughts.

As I've said before, I intend on keeping my account open at HMBradley, they paid well above market rate for a long time, they might well again...

But, as coincidence turns out, looks like I'll lose my tier boost in January, due in part to the pending change in the credit card (cash back) not keeping my balance down as much as it used to, and mostly due to how we use the account (pre-fund Roth, HSA, 529, Savings Bonds, etc. all purchased in January).

So I'll park any remaining funds in another location for a few months in Q1. I'll reassess at the end of Q1 where to go next. If HMBradley lags my other options, my money stays in those other options. If/when HMBradley has more attractive rates than other options, I plan to return.
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Vulcan
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

SnowBog wrote: Mon Sep 26, 2022 12:55 pm
PicassoSparks wrote: Mon Sep 26, 2022 8:40 am That is the sketchiest looking website for a bank I have ever seen. From a bit of looking it seems legit, but it has the graphic design of a scam email. Wild.
LOL. That was almost exactly my thoughts.
If you folks are talking about DollarSavingsDirect, there's nothing sketchy about them.

I've been using them (and their parent, EmigrantDirect) - since 2005.

I moved away when their rates stopped being the best, but my account is still there, ant it only took me a minute to transfer the money back in.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
jst
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Re: HM Bradley - is it safe - FDIC response

Post by jst »

Can't wait for 10/1. That's the day I pull all money over $100K out of my accounts!
SnowBog
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

Vulcan wrote: Tue Sep 27, 2022 11:59 pm
SnowBog wrote: Mon Sep 26, 2022 12:55 pm
PicassoSparks wrote: Mon Sep 26, 2022 8:40 am That is the sketchiest looking website for a bank I have ever seen. From a bit of looking it seems legit, but it has the graphic design of a scam email. Wild.
LOL. That was almost exactly my thoughts.
If you folks are talking about DollarSavingsDirect, there's nothing sketchy about them.

I've been using them (and their parent, EmigrantDirect) - since 2005.

I moved away when their rates stopped being the best, but my account is still there, ant it only took me a minute to transfer the money back in.
Wasn't specifically saying they were sketchy... But was saying their website is atrocious...

But that's the beauty of FDIC entities. You can move around your funds to whatever works the best for you. And if/when that changes in the future, you can do so again.
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Vulcan
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

SnowBog wrote: Wed Sep 28, 2022 3:50 am Wasn't specifically saying they were sketchy... But was saying their website is atrocious...
That it is. :)
But that's because they left it unchanged for almost 20 years.
It's simple, and it works.
Fast, too. No bells and whistles to load.
But that's the beauty of FDIC entities. You can move around your funds to whatever works the best for you. And if/when that changes in the future, you can do so again.
Yup.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
criticalmass
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Re: HM Bradley - is it safe - FDIC response

Post by criticalmass »

Vulcan wrote: Tue Sep 27, 2022 11:59 pm
SnowBog wrote: Mon Sep 26, 2022 12:55 pm
PicassoSparks wrote: Mon Sep 26, 2022 8:40 am That is the sketchiest looking website for a bank I have ever seen. From a bit of looking it seems legit, but it has the graphic design of a scam email. Wild.
LOL. That was almost exactly my thoughts.
If you folks are talking about DollarSavingsDirect, there's nothing sketchy about them.

I've been using them (and their parent, EmigrantDirect) - since 2005.

I moved away when their rates stopped being the best, but my account is still there, ant it only took me a minute to transfer the money back in.
Just be forewarned that Emigrant / DollarSavingsDirect/ MySavingsDirect will offer teaser rates then suddenly reduce them. They seem to favor one website brand or another for a while for the highest rate, then reduce the rate hoping nobody notices for a while.
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Vulcan
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Re: HM Bradley - is it safe - FDIC response

Post by Vulcan »

criticalmass wrote: Wed Sep 28, 2022 7:48 am
Vulcan wrote: Tue Sep 27, 2022 11:59 pm
SnowBog wrote: Mon Sep 26, 2022 12:55 pm
PicassoSparks wrote: Mon Sep 26, 2022 8:40 am That is the sketchiest looking website for a bank I have ever seen. From a bit of looking it seems legit, but it has the graphic design of a scam email. Wild.
LOL. That was almost exactly my thoughts.
If you folks are talking about DollarSavingsDirect, there's nothing sketchy about them.

I've been using them (and their parent, EmigrantDirect) - since 2005.

I moved away when their rates stopped being the best, but my account is still there, ant it only took me a minute to transfer the money back in.
Just be forewarned that Emigrant / DollarSavingsDirect/ MySavingsDirect will offer teaser rates then suddenly reduce them. They seem to favor one website brand or another for a while for the highest rate, then reduce the rate hoping nobody notices for a while.
DSD has been their top-earning one for a long time now.

But of course I will notice if their rates are not competitive, regardless of what other sites they run.
If you torture the data long enough, it will confess to anything. ~Ronald Coase
engaged73016
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Re: HM Bradley - is it safe - FDIC response

Post by engaged73016 »

ChiKid24 wrote: Fri Aug 12, 2022 12:37 pm Just got an email from HMB that they are eliminating the credit card annual fee. Anyone who paid one in 2022 will get a credit to their account. Bad news is they are moving to a flat 1.5% cash back. So no more 3% or 2% tiers. Still worth it to me for the bonus boost to 3% on my savings account. I'll continue to charge the minimum each month on the credit card to qualify.
Good morning!
I have the HMB credit card and I still did not get an email about this change in % cash back. Did "everyone else" get it?
Thanks!
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Nate79
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Re: HM Bradley - is it safe - FDIC response

Post by Nate79 »

engaged73016 wrote: Thu Sep 29, 2022 7:38 am
ChiKid24 wrote: Fri Aug 12, 2022 12:37 pm Just got an email from HMB that they are eliminating the credit card annual fee. Anyone who paid one in 2022 will get a credit to their account. Bad news is they are moving to a flat 1.5% cash back. So no more 3% or 2% tiers. Still worth it to me for the bonus boost to 3% on my savings account. I'll continue to charge the minimum each month on the credit card to qualify.
Good morning!
I have the HMB credit card and I still did not get an email about this change in % cash back. Did "everyone else" get it?
Thanks!
Yes, it was in Auguest. The terms are posted on their website:

https://www.hmbradley.com/credit-card-t ... ct-billing
MrJedi
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Re: HM Bradley - is it safe - FDIC response

Post by MrJedi »

New banking partner with New York Community Bank and slightly different structure to earning interest. Highest rate is still 3%. Saving rate is slightly relaxed as now you only need a positive cash flow into the account each month instead of saving at least 20% of all deposits every quarter. $500 monthly credit card spend still required to get the highest rate. New account requires actually opening a new account.

Also they are closing the Hatch Bank accounts after October 31. If you do not transfer out or initiate the close yourself, they are going close it and mail you a check after October 31.

https://www.hmbradley.com/blog/a-new-chapter

Noncompetitive for me. I plan to transfer out the last few dollars I have and let them close my Hatch account. I don't think I'm going to open the new one.
SnowBog
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Re: HM Bradley - is it safe - FDIC response

Post by SnowBog »

MrJedi wrote: Thu Sep 29, 2022 1:08 pm New banking partner with New York Community Bank and slightly different structure to earning interest. Highest rate is still 3%. Saving rate is slightly relaxed as now you only need a positive cash flow into the account each month instead of saving at least 20% of all deposits every quarter. $500 monthly credit card spend still required to get the highest rate. New account requires actually opening a new account.

Also they are closing the Hatch Bank accounts after October 31. If you do not transfer out or initiate the close yourself, they are going close it and mail you a check after October 31.

https://www.hmbradley.com/blog/a-new-chapter

Noncompetitive for me. I plan to transfer out the last few dollars I have and let them close my Hatch account. I don't think I'm going to open the new one.
Interesting... I'll probably create a new account, if nothing else to confirm transfers/etc. all work like they did before.

So far, I think here's what I like:
  • Lower direct deposit of $500 (vs. $1500) monthly
  • Simpler bonus tiers, 3% just needs positive cash flow (deposits > withdrawals) and $500 monthly CC spend
  • Monthly rate changes, meaning if you need to pull out funds (such as I do for January), the you only need FYI wait one month for the higher rate to start again.
  • Interest paid on up to $250k now...
Overall, this will make the account far easier for me to manage. No more quarterly withdrawals and trying to engineer how much CC spend to keep my balance down.

The downside is perhaps the higher monthly ($500) credit card spend, especially with the new lower 1.5% cash back. Maybe that's a wash with their CC going to no annual fee... But it's yet to be seen if they'll count CC payments "against" you now (aka if your deposit need to exceed your credit card payments, currently you can actually have a declining balance while still meeting the 20% "savings" target).

Against other current market rates, this is not really attractive anymore, as you can get similar with perhaps no hoops... But I still plan on keeping an account open for awhile, in the hopes that inflation/interest rates return to "normal" (good for our retirement portfolios) which means banks will return to paying far less, and if HMBradley maintains their model, they'll return to paying above market rates.
MrJedi
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Re: HM Bradley - is it safe - FDIC response

Post by MrJedi »

I plan to keep an eye on the account at least. The credit card hoop is by far the biggest deterrent for me. If rates plummet again I may consider jumping through that hoop but not with current rates.

It does appear that the credit card spend/payment still doesn't count against the saving rate (now just positive cash flow rate). Emphasis mine.
  • Customers who open an HMBradley Deposit Account with NYCB will be rewarded with 1.00% APY just for signing up. There’s no need for a monthly direct deposit or requirement to save any deposits.
  • Customers who make a direct deposit of at least $500 per month to their HMBradley Deposit Account with NYCB and maintain positive monthly cash flow (meaning that monthly deposits exceed monthly withdrawals, not including HMBradley Credit Card payments) will earn 2.00% APY in the following month.
  • Customers who fulfill the requirements in the previous bullet point and also spend $500 per month on their HMBradley Credit Card will earn 3.00% APY in the following month.
jst
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Re: HM Bradley - is it safe - FDIC response

Post by jst »

Agreed - the higher cap for the 3% (up to $250,000) is pretty attractive, but the $500 credit card requirement is also decently hefty for me. That might mean giving up some bonused spend on other cards. But, again as the previous poster noted, the penalty for missing the requirements will only be one month of the higher rate - and the lower rate will still be 2% if you only miss the spend requirement.

On the flip side, short term brokered CDs are paying well over 3%. I'm pretty new to that game but I'm dipping my toe and they seem to be a better place to park my money. Yes, they require a bit of an active roll, but so does this account.
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Re: HM Bradley - is it safe - FDIC response

Post by nisiprius »

I will be interested to hear, from those who go along with the switch, if they get individual account numbers at New York Community Bank, and whether it continues to be possible to make deposits and withdrawals directly from that bank account without having HM Bradley as an intermediary.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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