I opened an IRAaccount in 1984. At the time, I was guaranteed that the interest rate would never go below 8%. A few years ago the bank tried to lower the rate, but was stopped when account holders threatened to sue. Now the bank has sent me a letter saying they are going to resign as custodian of the account and will no longer hold it. Can they do this?
Apparently, the bank has determined that it no longer wishes to subsidize the earnings on your IRA to fulfill the contractual yield requirement. There is no rule that would prevent the bank from resigning as custodian. That will require you to establish another IRA elsewhere and arrange for a rollover of your funds so as to avoid any penalties or taxes on the disbursement. You would be wise to make the arrangements promptly.
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Apparently, the bank has determined that it no longer wishes to subsidize the earnings on your IRA to fulfill the contractual yield requirement. There is no rule that would prevent the bank from resigning as custodian. That will require you to establish another IRA elsewhere and arrange for a rollover of your funds so as to avoid any penalties or taxes on the disbursement. You would be wise to make the arrangements promptly.
