Banking News: Citibank Disclosure Says Customers Must Provide 7 Days Notice to Make Withdrawal (NYSE: C)
Imagine that you drive up to your bank’s ATM machine hoping to take out some cash, only for it to provide you an error telling you to come back in a week because you must give 7 days’ notice to make a withdrawal. Although the scenario sounds unrealistic, that’s exactly what Citibank’s (NYSE: C) account disclosure allows the bank to do.
In an informational statement to customers that got very out of hand, Citibank told its customers that it has the right to delay customers from taking out their own money in certain rare circumstances. The misstep occurred when Citibank included a disclaimer to that effect on statements to its customers nationwide.
According to various reports, the company’s intention was to only include the statement to its Texas customers in response that a massive withdrawal protest was being planned because of outrage relating to excessive executive bonuses.
It’s not just Citibank’s account policies that allow the bank to withhold account holders’ money, but it’s actually part of Federal Reserve Regulation D, that limits withdrawals on certain types of FDIC-insured accounts. The goal of the regulation is to prevent the possibility of a panic-driven run on banks.
Although the revelation that Citibank has the option to temporarily withhold its customers money is within the bounds of federal regulation, it’s a powerful statement made by the company has no intention of being swayed by public criticism of providing large bonuses to executives on the taxpayers’ dime.
Citibank released a statement saying, “We have never exercised this right and have no plans to do so in the future.”
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Great post but complicated to understand since I am from Faroe islands ;-) 
What would be your top three tips for anyone new to this topic?
It may be federally allowed, but there would be a mass exodus of customers once withdrawals were possible again, and the company would tank. Companies like to throw their weight around like the little people don't matter, but in a day and age of social networking, people can, and will, be heard.
Agreed,
Funny how there's not too much mention of this. As it would seem that a “Run” on banks is a MAJOR thing!
Please post and spread the word. Pull your money out of Citi and try a local Credit Union.
I don't think this is the beginning of anything, I think its a publicized mistake. People are not being denied there hard earned money, Citi is just reminding us what the law is and making themselves look bad in the process.
Too many idiots who know very little the world of finance in general. Citi mistakenly put this on nationwide statements to its customers due to certain big businesses in Texas threatening a “run” on Citi in that state.
By all means Citi has the right to protect itself under the Federal Law.
So before some of you start sharpening your pitch forks and ligthing your torches you should really do your research and undertand what is being discussed in its entirety.
It's amazing how the FDIC and the federal law can put rules on consumers accounts for withdrawls, etc, however, the FDIC and government can't put rules on the bank themselves. How many more banks is the government going to bailout and help and put it to the consumers more.
When it comes to bank the law only protects the banks not the consumer.
The real issue is that the banks are held to such a low reserve level.
The Fed and the FDIC have loosened the rules to the point where tehy don;'t have to maintain any significant holdings.
That is the crime anf you can blame it squarely on teh voters that let BOTH parties cater to big business
If any of you actually catch up on your market news with these idiotic blogs then you need to be shot..
this idiots opinion has no bearing on the truth..Citi announced (which the immature words of this author failed to mention), Citi has had this policy in place for a long time and has no intentions of enforcing it.
How wrong could you be? Why here why now? There is a reason they are doing this. It's most probably in preperation for a bank run, stock collapse, major terrorist attack, attack on Iran, or devaluation of the dollar.
Citi's statement is nothing but “weasel words.” The Titanic had no plans to hit an iceberg in the future either. Citi will gladly change its mind whenever it chooses to, and its customers will wish they'd moved their money elsewhere.
And sir, we have the right to OUR MONEY. What's your response to that?
And sir, we have the right to OUR MONEY. What's your response to that?
It's the fact that Citi has a policy like this at all, whether they've ever implemented it or intend in future to do so, that I find most troubling of all.
Why does a bank need such a policy and why would a bank include mention of such a policy to those planning to withdraw their money in protest? As a threat?
And what happens if and when Citi should every implement the policy? You don't think that wouldn't cause a panic and a run on every bank in America once news got out?
I ask you again, why have such a policy and why threaten anyone with it, especially those planning to protest exorbitant bonuses to the very folk that got us all in trouble in the first place.