Did TIAA Pay You Unreasonably Low Interest on Your IRA Cash?
Kehoe Law Firm is evaluating potential claims on behalf of TIAA customers with individual retirement accounts (“IRAs”) whose uninvested cash was placed in the Bank Deposit Sweep Program and who may have been credited interest at allegedly unreasonably low rates.
A proposed class action against TIAA-CREF Individual & Institutional Services, LLC (doing business through TIAA Brokerage Division) and TIAA Trust, N.A. alleges that TIAA automatically swept uninvested cash in certain IRAs into a bank deposit sweep program that paid unreasonably low interest rates, even though higher-yielding options allegedly were available for eligible accounts.
If you have or had a TIAA IRA and uninvested cash was placed in TIAA’s Bank Deposit Sweep Program, contact Kehoe Law Firm to discuss your account and potential legal rights without cost or obligation.
Details of the TIAA Cash Sweep Class Action
On September 1, 2026, a proposed class action, Powlen v. TIAA-CREF Individual & Institutional Services, LLC and TIAA Trust, N.A., Case No. 1:26-cv-07494, was filed in the U.S. District Court for the Southern District of New York. The complaint challenges TIAA’s automatic Bank Deposit Sweep Program for certain IRA customers.
The complaint alleges that eligible uninvested cash was automatically swept into FDIC-insured bank deposit accounts while a higher-yielding money market fund option was available through TIAA’s platform. It further alleges that TIAA’s agreements promised that swept deposits would bear a “reasonable rate of interest,” but the rates credited to customers remained materially below short-term market benchmarks and TIAA’s own higher-yielding alternatives.
What Does the Complaint Allege?
According to the complaint, TIAA’s bank sweep rate changed only modestly while short-term interest rates rose substantially. For example, the complaint alleges that by June 2023 the Federal Funds Rate was 5.08% while the TIAA sweep rate was 1.00%. It also alleges that TIAA displayed materially higher rates for certain managed, overflow and money market options while keeping eligible customers in the lower-yield bank sweep program.
The complaint alleges that TIAA and its affiliates benefited economically from swept customer cash and that TIAA’s compensation structure created incentives to use sweep options that generated greater compensation. Customers allegedly received less interest than they would have received if TIAA had paid a reasonable rate or used available higher-yielding options.
Who Is Included in the Proposed Class?
The complaint seeks to represent all individual retirement account customers of the defendants who had cash deposits or balances in the defendants’ Bank Deposit Sweep Programs within the applicable statute of limitations.
Claims and Relief Sought
The complaint asserts claims for breach of contract and breach of the implied covenant of good faith and fair dealing. It seeks, among other relief, certification of the proposed class, damages including alleged lost interest, declaratory and appropriate injunctive or equitable relief, pre- and post-judgment interest, and attorneys’ fees and costs to the extent authorized.
TIAA Customers: Contact Kehoe Law Firm
TIAA customers with individual retirement accounts may have potential claims if their uninvested cash was placed in the Bank Deposit Sweep Program and credited interest at allegedly unreasonably low rates.
If you have or had a TIAA IRA with cash held in the Bank Deposit Sweep Program, contact Kehoe Law Firm to discuss your account and legal rights.
For a free, no-obligation legal evaluation, contact:
Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]
About Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors, consumers, and employees in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.
Kehoe Law Firm’s class action legal services are provided on a contingency-fee basis, meaning plaintiffs are not responsible for attorneys’ fees or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval.
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