Citigroup to Customers: “We Reserve the Right…”Saturday, February 20, 2010
Citigroup sent this notice out to customers:
“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change.”
Ira Stoll, at the Future of Capitalism, says,
I called Citi about it and they said the warning applies only to customers in Texas and that the notification had been mistakenly included on statements nationwide.
…Citibank has now released the following statement by way of explanation: “When Citibank moved to unlimited FDIC coverage in 2009, we had to reclassify many checking accounts to allow for immediate withdrawals in order to ensure all customers qualified for the additional coverage. When we moved back to standard FDIC coverage with most major banks in 2010, Citibank decided to reclassify those accounts back to make them eligible again for promotional incentives. To do so, Federal Reserve Reg D requires these accounts, called NOW accounts, to reserve the right to require a 7-day notice of withdrawal. We recently communicated this technical requirement to our customers. However, we have never exercised this right and have no plans to do so in the future.”
In a related note, over at Seeking Alpha, the latest Bank Failure Friday report lists #17 -20, as four more banks were closed yesterday. See my article, A Banner Year for Bank Failures. I wasn’t surprised when the proprietor of a local, family-run safe retailer told me his business was up 20% from his “usual” sales numbers.