Don't Let Bank Fees Deplete Your Child's Coogan Account, Image via Wikipedia
Understanding exactly what a Coogan blocked trust account is and how it works is no easy feat for a parent of a child actor or model. Many employees at banks are just about as clueless about Coogan accounts as you probably are, and some are even more so.
In fact, finding the information you need related to Coogan blocked trust accounts can be next to impossible. Some additional information about Coogan accounts can be found in “What Is a Coogan Account?” and “What Is a Coogan Blocked Trust Account?”
Not long after we opened my daughter’s Coogan blocked trust account, the financial institution hosting it was taken over by another financial institution. They assured me that the transfer of her account would be handled seamlessly.
Trustee’s Statement
I had to have a new trustee’s letter/statement of account (see “What Is a Coogan Account?” for details on the Trustee’s Letter/Statement) prepared to show all the new information for her Coogan account. The representative wanted to charge me $5.00 since they had previously prepared a statement for me. I asked to speak to the supervisor and got the $5.00 charge waived since it was not my fault. So at this point, I would definitely not have called it seamless, even though everything seemed to be going okay.
Fees Being Deducted From a Coogan Account
When I received my daughter’s first quarterly statement after her Coogan account had been inherited by the new bank, I noticed that fees were being deducted from her account. I certainly was not happy about the changes to her account that was supposed to remain the same after the transfer.
I proceeded to make phone calls to investigate what was going on with her account at this point. Why were fees being withheld from her Coogan account? After talking to three different bank representatives and spending over an hour on the phone, one of the representatives assured me that it was just set up incorrectly and that it would be fixed immediately.
But when her next statement came, I noticed fees were still being deducted each month from her account! I thought the idea of the account being a blocked trust was that no money, fees included, would be deducted from her account. It took another hour of phone calls and finally a visit to the bank to get this problem fixed.
So, “Can a Bank Deduct Fees from a Coogan Blocked Trust Account?”
Well, in answer to this question, a bank should not be deducting fees from a Coogan account! It may not be against the law (and indeed, I am in the process of investigating this right now), but it is certainly something that should not be occurring. No one should deduct money from the Coogan blocked trust account, not even the bank, until the minor turns 18 or becomes emancipated.
What is the point of the Coogan Law requiring 15% to be put into an account for the minor’s use if the bank is just going to charge fees and use that money? Even banking fees can use up the money in a small Coogan account quite rapidly.
Talk to the Bank or Credit Union If Fees Are Deducted Unexpectedly
If the bank or credit union is deducting fees from your child’s Coogan account, you must talk to the bank about it immediately. If they will not refund the fees and/or stop charging fees on the account, you need to transfer the money to a different bank or credit union that will not charge fees.
If a bank or credit union will charge fees if no deposits are made for a certain time period, find out exactly how often a deposit must be made. Then make a very small deposit into the account for the purpose of avoiding any fees if that will solve the problem.
Since California law requires that you open a Coogan trust account for your child when you get them a work permit, it just seems wrong that the banks can then deduct fees from the very accounts created to protect the earnings of the minor child.
For information on this and many other related topics, please subscribe to Your Young Actor’s Newsletter.
To your success,
Debbie Sikkema
21 comments
jinnie from mobile banking credit union says:
March 14, 2010 at 11:04 pm (UTC -8)
The Bank now days is as important as the banker. When WAMU was bought out by Chase and they start playing the old switch-a-roo without notification of changes. Your good old banker could do nothing for you.
nimmy from mobile banking credit union says:
March 16, 2010 at 9:14 pm (UTC -8)
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sanarita from mobile banking credit union says:
March 19, 2010 at 1:05 pm (UTC -8)
This is really a great post about the particular topic and i am really impressed to know about it. I have read your full article and truly speaking that it was really very knowledgeable and very interesting. I think you are really very close on your points. Anyways keep it up and keep continue with your valuable thoughts. In the near upcoming future.
fraud says:
March 19, 2010 at 1:10 pm (UTC -8)
Its nice that Washington finally put some restrictions on the banks. Only time will tell where banks raise prices to make up for the huge losses.
Anderson says:
April 2, 2010 at 12:53 pm (UTC -8)
Debbie,
I understand all these details you have mentioned in both your blogs. I have a question, when you get a paycheck where do we have to see this 15% mentioned? Under After tax deduction or under my net pay?
Forex Robots says:
April 12, 2010 at 12:10 am (UTC -8)
sometimes I start thinking that banks are just trying to ruin the economy of our country. but i can`t understand what final aim do they want to achieve
MarkSpizer says:
May 2, 2010 at 3:30 am (UTC -8)
great post as usual!
Traci says:
October 12, 2010 at 1:58 pm (UTC -8)
This is exactly what is happening to our daughter’s account. B of A will not reverse all of the fees and is now saying she has to have $300 in there at all times or fees will keep getting taken out. We are in the process of finding a new bank. Any recommendations for one that does not charge fees?
Debbie Sikkema says:
October 27, 2010 at 3:32 pm (UTC -8)
Hi Traci,
AFTRA-SAG Credit Union is what I recommend. There are others that are good, but you can’t beat the service, information, and benefits you will get at this credit union. I talk about them in my other posts about Coogan accounts. You can also find them on the internet. Call and talk to them and they can answer all your questions. You may be the person who told me about this problem a few months ago, and if so this post was written especially for you!
Best regards,
Debbie
antibiotics and alcohol says:
March 12, 2011 at 8:12 pm (UTC -8)
we get a very good info and we must say that you really got the stuffs that are very interesting and one has to closely observe this.
ShelsyBanks says:
July 13, 2011 at 12:25 pm (UTC -8)
OMG Thank you so much Ma’am. I got some really good infos ’bout the account that i never knew about. God bless.
Shame on WaMuChase says:
October 14, 2011 at 8:26 am (UTC -8)
We deposited $100 to open our Coogan account at Wamu back in 2003, They changed our account number in 2006. I’ve talked to Chase and they said they didn’t get this account from WaMu. I suppose it’s possible that somewhere between them the account was eaten up by fees?
Debbie Sikkema says:
October 17, 2011 at 11:22 am (UTC -8)
Hi,
I think you need to push on this to find out what happened to your $100. Were you receiving statements showing the fees being deducted? So did WaMu get bought out by Chase and that is how the account ended up at Chase? I thought Chase bank told me that they did not have Coogan accounts. You should have been informed about this or anything else regarding that account. Do you have proof of the $100 that you deposited? You need to go with information in hand and find out what happened to that money! Technically, banks should not be deducting fees from Coogan accounts. I am telling people to find a bank that won’t deduct fees and make sure they don’t get deducted. Since banks do deduct fees, it is possible that the money has been depleted but you should’ve been receiving statments showing you that this was occurring so you could’ve stopped it. Well, as you can tell, this is really a sore point with me, and I could go on and on about how bad this process is — requiring people to have these accounts for their kids but then allowing the bank to deduct fees and use the money up. This is so wrong! Unfortunately, parents and guardians really have to work hard to make sure this does not occur. Please let me know what you find out on this.
Warm regards,
Debbie
Alex says:
November 29, 2011 at 2:49 pm (UTC -8)
Hi Debbie,
I have done a lot of research recently since happening on some frustrating news. I opened 3 Coogan accounts a year ago with Bank of America. I was not told there was a minimum fee to open as I would have gone somewhere else if I had to come up with $900. The process was fairly easy and I went on my way. My children worked on occasion and I never thought twice about those accounts. My son finally received a large check, which was difficult to cash. BoA told me they could not cash nor deposit as there was no account open for him. After reviewing the account I was told that the account was closed last month since there was no money in it and the last transaction was a 5 dollar service fee. He said he could not give me any further information. That is when I learned of the 300 minimum deposit at time of opening. I asked to see information which stated this and he did not have any to provide. Only given a brochure on a standard savings account. This means all 3 of my children’s accounts have been closed and all their money is gone, while they were all still under 300, they have all been robbed of their money.
I understood no one could access their accounts, so what makes the bank any different?
Now I have a 15 percent check floating around as I spend my time finding another bank who won’t steal from minors.
I have yet to find anything else on the subject. Please let me know if you have anymore information regarding laws and bank fees. If there are any, they should be changed.
Debbie Sikkema says:
December 1, 2011 at 9:48 am (UTC -8)
Hi Alex,
I am so sorry this has happened to you. Let me look into this a little. I really think you need to talk to someone. Why did they let you open the account with less than the minimum if it is not allowed? Can you talk to the AFTRA/SAG credit union? You may be able to open an account there to deposit that check — talk to them about it as they are experts in this area. They have a site that I always refer people to–check my blog posts as I think I have a link to that site, or just search for it on the internet. They will be happy to open an account there for you–but you need to make sure the other one is closed or that it is transferred appropriately. Tell them the whole story and see what they say. I have heard similar stories to yours, and I did call the SAG office and someone in there told me that the bank could deduct fees, though I thought the law stated that they could not — and in reality, they should not be able to — if no one can deduct fees or take that money, why should the banks be able to? It is a racket. But someone else commented here on my blog stating that the banks really are breaking the law. One person I recommend you contact is Anne Henry. She is big into all the laws associated with children and acting and is a great resource. Go to Professional Actors Resource Forum and create a free account. Anne Henry is a moderator on that forum and she and others will see if you post there on this and I know they will have an answer for you on this or tell you who to talk to about it. Anne Henry has a website as well, http://www.bizparentz.org, but I don’t see much on this topic on there. This whole thing makes me so angry! The banks should not be allowed to do this.
With great sympathy to you,
Debbie
Debbie Sikkema says:
December 1, 2011 at 7:28 pm (UTC -8)
Hi Alex (again),
I found the comment posted on my blog by Mary Fry about the laws associated with Coogan accounts. Here is the content from her comment which is posted on my blog post on transferring a Coogan account from one financial institution to another.
Mary Fry says: December 28, 2010 at 8:41 pm (UTC -8)
According to the actual text of the Coogan law “no withdrawal by the beneficiary or any other individual, individuals, entity, or entities may be made of funds on deposit in trust without written order of the superior court pursuant to paragraph (7) of subdivision (b) or paragraph (5) of subdivision (c) of Section 6752.” The bank is an “entity,” therefore not entitled to withdraw any money as fees or charges. Ironically, the banks offer FREE accounts to children with a minimum deposit of $25. Those types of accounts are not Coogan accounts and can be withdrawn at any time. Banks know Coogan accounts are easy targets. The children can’t move their money and parents only receive quarterly statements while fees are deducted monthly. Any bank that acts as a “predator” by charging a child’s Coogan account is in violation of federal law as it is currently written.” — I hope this helps. I’m still looking into this more also. –Debbie
Alex says:
December 2, 2011 at 3:12 pm (UTC -8)
Dear Debbie,
Thank you so much for all your valuable information. I am sure I read the same thing in regards to no one can withdrawal funds. I feel the need to do something about this as I am sure the bank is wrong and have probably done this to other innocent children.
Debbie Sikkema says:
December 4, 2011 at 10:07 pm (UTC -8)
Hi Alex,
You are welcome. I can’t tell you how many people have commented or emailed me with similar Coogan situations as yours. You really do need to investigate this further. The person I talked to in the SAG office told me that banks could deduct fees but I don’t see how when the law states that they can’t. It is just plain wrong. These trust accounts are supposed to be protecting our children’s funds and not taking them. Please let me know what else you find out. I am still investigating this myself and if I find anything more out I will let you know.
Warm regards,
Debbie
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