A CNBC.com piece entitled, "This start-up promised higher interest rates on savings. Now some customers are struggling to get their money back," tells us, "The ads popped up on social media. Earn as much as 7% interest on your savings by opening an account with a new start-up. In this historically low interest rate environment -- when the average savings account pays just 0.09% annual percentage yield -- the offer might have sounded too good to be true. Many of the company's customers are now wondering if indeed it was. A joint investigation by CNBC TV and CNBC.com has found that Beam Financial is having trouble processing customer withdrawals. Some users CNBC spoke with say their withdrawal transactions have been pending for months and that repeated attempts to get answers and updates from Beam have either gone unanswered or were not useful. Many of these email and text updates from Beam put the blame on the company's bank partners or vendors." The piece explains, "San Francisco-based Beam launched in September 2019 and promoted itself as the 'first mobile high-interest bank account designed for the 99%.' ... `Now, multiple Beam customers who spoke with CNBC said they are also facing long delays after trying to get their money out. It is unknown how many customers are affected or how much total money is at stake.... Beam's goal was to be the first high interest bank account for millennials, the company's CEO Aaron Du, 37, said in an August 2019 interview with CNBC.com. Today, the company touts more than 186,000 subscribers on its website. It has $2.4 million in total deposits, according to R&T, a vendor working with Beam. However, a source close to the company said the number of actual accounts may be less than 30,000." The CNBC article explains, "Notably, Beam is not a bank. The funds deposited with the company are insured by the FDIC through a network of U.S. banks, the company said. Typically, FDIC insurance covers up to $250,000 per depositor per bank. Beam also promised its customers 24/7 access to their funds and no monthly withdrawal limits. Beam's business model involved the use of what is known as a sweep account. The arrangement, which is common and perfectly legal, 'sweeps' Beam's deposits into a network of FDIC-insured banks each day. Beam can collect interest or fees on those deposits, and pass those on to its customers. However, multiple Beam account owners who spoke with CNBC said they have requested to withdraw their funds and have yet to receive their money." It adds, "Also cutting ties with Beam, as of Oct. 31, is the company handling Beam's sweep account, New York-based R&T, according to a letter obtained by CNBC. Beam's strategy relies on sweep accounts, whereby its deposits are swept into FDIC insured accounts each day. R&T said it 'stands ready to work with Beam and its service providers,' and that the funds are being 'held in a demand deposit account at one, well-capitalized FDIC member bank.' The firm added that it doesn't have the authority or the information necessary to immediately return these funds to the custodian bank, but plans to do so 'as soon as R&T receives the appropriate instructions, but no later than Oct. 31, 2020.' R&T said that it believes the delays for Beam customers receiving their funds may be an operational or technical issue on Beam's end."

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