Liz Weston

Dear Liz: I recently tried to open a high-yield, one-year certificate of deposit at an online bank. I already have one CD with this bank, but when I went to submit the form for the new account, I got a message on the screen that the bank had denied my request. I called the bank’s customer service line, but the rep said she could not give me any reasons as to why they denied my application.

I checked my three credit reports and everything is in order. The only thing I can think of was that I recently had a balance on one credit card that went slightly over 30% of my credit availability, but I paid that off in full. I did some research online and another reason might be that withdrawals from other bank accounts are appearing on my credit report. I have made some regular withdrawals recently from one of my money market accounts.

Why would a bank deny a customer giving them a large amount of money, so they could loan it out at the higher interest rates and make money? If I knew the reason for the denial, I could fix it. Is there a federal banking rights organization where I can dispute this denial?

Answer: You can file a complaint with the Consumer Financial Protection Bureau, which promises to work with your bank to resolve your issue. You also could file a complaint with the bank’s regulator, but there’s no guarantee you’ll get a response.

The denial probably wasn’t due to the information in your credit reports. A bank may check your credit before allowing you to open a new account, but you wouldn’t be denied because you used more than 30% of your credit limit. Bank transactions typically aren’t recorded in your credit reports, so that wouldn’t be a reason for denial, either.

The bank is required to send you an “adverse action” notice if it used your credit report or another consumer database to deny your application. That notice should explain the reason why, and the database it used.

It’s possible you encountered a technical glitch, or were trying to deposit more than the bank allowed for that account. Another possibility is that there were typos or errors in your online application. Whatever the case, the CFPB complaint should prompt a clearer response from the bank about what happened and what you can do to resolve the problem.