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Heads-up. I noticed this in the fine print in my Citi statement.

"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."

This may affect those doing frequent transfers between checking and other accounts.


Edit: Updated title to include "Withdrawal vs. Transfer debate" per suggestion

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I guess this only effects the customers who have Citi's mortgage account and checking account and they use checking acco... (more)

ChlmrsXRNA (Feb. 23, 2010 @ 3:58p) |

Citibank explicitly states that they have never implemented the seven days' notice required to withdraw funds option and... (more)

glxpass (Feb. 23, 2010 @ 4:12p) |

Quick history lesson. By law accounts that would give you your money on demand were (and I believe still are) forbidden ... (more)

ProfessorEd (Feb. 23, 2010 @ 4:21p) |

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leave it to citi

I just received a call from my local Citi personal banker, informing me of the changes to take effect to my checking. It used to be free of monthly maintenance fees with direct deposit, or 2 bill payments per month, etc. Now they require a $1500 daily minimum balance - not too difficult to maintain, but I got my reward for opening the account so I'll be closing it.

The minimum balance requirement and reserving the right to require 7-day notice for withdrawals signals that Citi is trying to build up their cash reserves, AFTER receiving TARP fund infusion and paying out large bonuses. When you look at it from a glass-half-full perspective, it's surprisingly responsible of Citi to NOT just expect another bailout.

What gets me is the use of the word "right."

How does Citi claim the "right" to hold on to money that doesn't belong to them and never did?

If that's the case, I reserve the "right" to camp in Citibank's lobby for up to 90 days. I have never exercised this right before and may not exercise it in the future, but I thought it would be nice to let Citi know.

People, stop freaking out. Nobody will stop from withdrawing $100 or $200 that you do. (BTW, this is only refers to WITHDRAWALS, not TRANSFERS). They just trying to cover their asses if you want to cash out large amounts IMO

CrazierRus said: People, stop freaking out. Nobody will stop from withdrawing $100 or $200 that you do. (BTW, this is only refers to WITHDRAWALS, not TRANSFERS). They just trying to cover their asses if you want to cash out large amounts IMOFirst off, you're making an assumption that is mentioned nowhere in the revised terms. Not a good idea.

Secondly, if someone wants to cash out large amounts from their own accounts, what business is it of Citi's? It's not their money. It's the depositors'.

Here's one example I can think of right off the top of my head. Let's say makingmovies' house is hit by a storm and he needs a new roof immediately - and the roofers want cash (as they often do). Citi could say "See you in a week, hope your house doesn't get TOO waterlogged in the meantime."

And the bigger picture - which you don't seem to see as a big deal - is that Citi is claiming a "right" to hold on to money that doesn't belong to them. Maybe you don't have a problem with that, but I can see this policy having a big impact on small businesses* that need to keep a decent amount of cash reserves readily available. I have a friend who has a high-end estate-sale business and this provision would be a significant problem for her.

*it says "all accounts," so it applies to commercial accounts as well.

exactly why i'm in the process of leaving citi right now. That and the fact that I can't ever use my citi credit cards anywhere without calling to confirm my purchases bc of "FRAUD".

I'm very curious to hear from some of the financial/legal FW posters about this. How is it that Citi has the "right" to hold on to this money? They only have that right if it is given to them by the government correct? If so, doesn't that mean that other banks would have this right as well?

I'm now glad I don't have a Citi checking acct.

I'm going to have to look through the T&C and disclosures for one of my checking accts and see if there is similar language in there.

makingmovies said: Heads-up. I noticed this in the fine print in my Citi statement.

"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."
This is a rather standard clause in alot of bank's terms.

It's purpose is to protect the bank from a run (if a branch runs out of cash, they have a week to obtain more without becoming liable). And it's what allows them to require advance notice if you try to withdraw $50k cash from a small branch that doesnt physically have that much.

There's no ill intent with this clause, its just a method to manage their cash on hand.

Glitch99 said: makingmovies said: Heads-up. I noticed this in the fine print in my Citi statement.

"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."
This is a rather standard clause in alot of bank's terms.

It's purpose is to protect the bank from a run (if a branch runs out of cash, they have a week to obtain more without becoming liable). And it's what allows them to require advance notice if you try to withdraw $50k cash from a small branch that doesnt physically have that much.

There's no ill intent with this clause, its just a method to manage their cash on hand.
I thought FDIC was supposed to prevent runs on a bank.

Are they saying they can require 7 day notice for cash withdrawals from accounts or is this inclusive of wire transfers, ACH transfers, and/or large checks out? I don't particularly care about the availability of cash but I'd be really pissed if this was inclusive of other types of transfers.

theman2 said: Glitch99 said: makingmovies said: Heads-up. I noticed this in the fine print in my Citi statement.

"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."
This is a rather standard clause in alot of bank's terms.

It's purpose is to protect the bank from a run (if a branch runs out of cash, they have a week to obtain more without becoming liable). And it's what allows them to require advance notice if you try to withdraw $50k cash from a small branch that doesnt physically have that much.

There's no ill intent with this clause, its just a method to manage their cash on hand.
I thought FDIC was supposed to prevent runs on a bank.
Not a "run" as in everyone lining up to get their money because the bank is about to collapse. Just an rather extreme increase in withdrawals, where too many people decide to withdraw too much from the same place at the same time - a coincidence, not because of some uniting force.

Closed out my checking, savings and CD with Citi last year when they announced the fee change. Haven't looked back since.

American Express Personal Savings also has the 7 day notice but says they will not usually use this. I pulled out most of my money from them.

Yup, not using Citibank either. Actually closed them out a long long time ago and never looked back.

If you check your terms on your accounts at most banks, you might find similar language.

btuttle said: If you check your terms on your accounts at most banks, you might find similar language.

I agree. I've seen this at many banks over the years, often accompanied with a statement that indicates federal regulations require them to include the language.

"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."

Considering how Citibank is doing financially my guess is that this will be used to prevent bank runs on the bank and may very well be exercised should Citibank start to decline on profit margins further.

One needs to take into account the "total picture" as to why this clause is being added in the first place.

grex23 said: American Express Personal Savings also has the 7 day notice but says they will not usually use this. I pulled out most of my money from them.
CapitalOne has a 21 day notice for withdrawal:
http://www.capitalone.com/banking/documents/rules-governing-new-...
"Notice of Withdrawal. We may allow withdrawals at any time, but reserve the right to require twenty-one (21) days written notice of intention to withdraw funds from any account, except that no advance notice of an intended withdrawal is required prior to a withdrawal of funds from a non-interest bearing transaction account."

No notice is required for non interest bearing accounts.

Which means I can move funds from Savings to checking at the ATM right in the branch then withdraw funds from the teller.

With Capital one it is essentially no notice required because in a worst case senario I can transfer funds to my checking.

With other accounts it is 7 days notice for all accounts.

As you so stated Citibank is 7 days on Checking accounts. Capital One is no notice required on non interest bearing transaction accounts.

What is the notice on Citibank Savings accounts that is required?

"non-interest-bearing transaction account accounts -- traditional checking accounts that don't earn interest"

I was fully aware of the Capital One policy in advance.

wordgirl said: What gets me is the use of the word "right."

How does Citi claim the "right" to hold on to money that doesn't belong to them and never did?

If that's the case, I reserve the "right" to camp in Citibank's lobby for up to 90 days. I have never exercised this right before and may not exercise it in the future, but I thought it would be nice to let Citi know.


Word!

The right to delay withdrawals has been a standard feature of accounts even since the Depression. It's purely a measure to avoid bank runs.

grex23 said: Considering how Citibank is doing financially my guess is that this will be used to prevent bank runs on the bank and may very well be exercised should Citibank start to decline on profit margins further.
Excluding a non-cash accounting charge for repaying their TARP funds, Citi made billions of dollars last year. What makes you think that their profit margins have been declining, let alone will decline further?

Funny all of this stuff is happening as I'm in the process of moving all my money away from them.. Goodbye Citi. They had decent "Ultimate Savings" rates for awhile that are now trash.

Everyone can judge the financial condition on their own. How can you say Citibank made billions last year when it has a Negative Earnings Per Share ratio?

In figures of millions for 2009 it lost 7,799.00 over 12 months before tax.

On a quarterly basis, the last quarter was high.

(Unfortunately some people will see this post and prerefresh. I apologize.

grex23 said: "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."

Considering how Citibank is doing financially my guess is that this will be used to prevent bank runs on the bank and may very well be exercised should Citibank start to decline on profit margins further.

One needs to take into account the "total picture" as to why this clause is being added in the first place.
The clause isnt being added. Read the part I bolded - it's always been there in some form, they just tweaked the language to the point that it required "notification". But in actuality nothing has changed.

But because Citibank is losing money, one needs to be forewarned this adverse senario could happen.

Citibank lost in 2008 and 2009. It lost less in 2009 than 2008 which was a horrendous year for the company as a whole. All figures are part of the known record and have been disclosed to the Securities and Exchange Commission along with all the regulatory requirements.

The SEC's Edgar database has all the results and is the official source of information so you can look at the figures in its entirety and break it down if you wish to do so.

But the fact of the matter is it declared a loss for the company and did not make any profit. In 2010 it will be established on an after TARP basis but don't forget the bank tax will likely be added to the largest banks as well and this will include Citibank proper for the 2010 fiscal year.

So we roll down to 2010 and one will see if they wind up requiring this 7 day hold time, but customers here have a choice based on this information as to if they want to keep funds in or move it elsewhere.

The disclosure is required by law, as they say. You can google a section of the notice and see the same notice being given by every bank.

Yes it is a requirement to disclose and customers can make their own decisions.

Capital One has a 21 day or no time depending if its a savings or non interest account as stated above.

Some banks have the 7 day clause. Every bank sets forth their own policies and procedures on matters.

Congress at work with the banks right now.

Hamilton vs Madison duel anyone?

Some things never change.

grex23 said: Everyone can judge the financial condition on their own. How can you say Citibank made billions last year when it has a Negative Earnings Per Share ratio?
Did you even read what I wrote? I'll copy it for you again:
Excluding a non-cash accounting charge for repaying their TARP funds, Citi made billions of dollars last year.
The numbers you're looking at include the accounting charge for TARP and exiting the loss-sharing agreement with the Treasury, which was $10.1B before taxes.

It's easy to say Citi made billions if you actually read the earnings announcement.

If you ever go to your Citi branch and they do not have enough cash to cover your withdrawal for that day, go to the next one down the street.

Banks keep very little cash on hand and will sometimes run out.

I trust "Audited financial results" not "earnings annoucements".

Bernie Madoff made false earnings announcements and defrauded his clients. He is now in a federal prison.

As far as getting cash, I remember withdrawing a large amount of USD from a BoA branch and they asked me how I wanted it and had gotten all the cash on hand which required clearance and I remember waiting in the bank branch while they made a phone call before I took out the cash. There was a delay in the branch and I had to wait for clearance but I got the cash with no hassle afterwards.

I couldn't believe at the time how many security cameras the BoA branch had compared to other banks, but I learned that BoA had the most FBI agents affiliated with the bank (mostly retired FBI agents and the head of the FBI and the like). So it all made sense.

Wound up closing out the account since I got higher interest elsewhere at other banks.

One shouldn't try to convince others about the Citibank financial state without them parsing the data themselves and checking the audited financial results which are what counts though. But Citibank did LOSE money and this is a known fact no matter how you parse it down and the breakdown should be individually looked at.

But changes are in store for 2010 supposedly depending on how the congress acts. Would I withdraw funds from Citibank due to this 7 day notice personally? Yes, because I wouldn't have put any money in Citibank to begin with in its current financial state and I didn't. But this 7 day notice to me seems like it is on a regular checking account so there is no escape by pushing funds into savings (as I asked for the Savings amount clause but I would assume there is the same or higher notification requirements on this)

With Capital One, the bank is in much better state as a company plus I can get my funds out with the checking account. Now there are many banks in excellent financial shape and one can pick from among these depending on consumer preferences and the like and I would definitely look at their policies for requiring advance notice before taking out deposits.

Your statement is just parsing information to make it seem like one way over another and I know what the breakdown is and its all there in the financial results. Your comment is akin to spinning the information in a specific direction. The net loss is what counts and is what reported and that is to be taken by the consumer first, then they need to discern the data themselves just like Markopolous discussed when dealing with Bernard Madoff in Congressional testimony to the House financial subcommittee. The reality is Citibank LOST money and this is a known fact and it is up to the consumer to discern the breakdown point by doing the analysis themselves. They should not for any second assume anything unless they do their own analysis and must assume the truth which is that Citibank lost money and they can do the analysis themselves as to what the actual breakdown is which is fully disclosed.

I did not "interpret" the data unlike you, I posted the "actual" net loss results. Also one would need to get into a full discussion about all the data including the effects of everything.

I am not a licensed CFA and all this information is my own personal opinion. People themselves need to do their own due dilligence and that is the gist of what I am saying.

I think it only applies to cash withdrawals. I know that most local checks clear in 24 hours, regardless their amount, even when they are in the 6+ figures due to the recent electronic check imaging laws. If you bought or sold a house recently you would know. I closed my Citibank account. I did not like the idea that someone in the Indian call center picked up the phone whenever I called customer service. I saw it as a security risk. According to AP, Reuters and CNN, Indian call centers compromise confidential data including Social Security #, DOB regularly. Local and smaller banks have better services and rates.

I think this is a Fed effort to curb money laundering and terrorist funding. Maybe this right will be enforced if the customer gets flagged due to suspicious activity in his/her account.

On the compromise of data part, Indians are very responsible individuals and a lot of outsourcing work is done in India today and this is not a security risk in itself. It depends on the quality and caliber of the institution and the call centers they use.

I never had a fradulent transaction on my part in all honesty and I have dealt with so many different institutions over long time periods. Did I get lucky? No, it was smart prudent behavior on my part. If I notice suspicious behavior, I immediately change my PINs and I throw out all offerings I do not use after ripping them up. The firms themselves are responsible should a transaction occur that is not of your doing.

I use Secure bank mail with my bank and have never been asked to verify security questions. This is the smart way of dealing with the institutions. If I had any questions with my account I would use online or speaking inside the bank directly. But I do enter in information to the automated systems such as security codes to get access to my account at times and I would expect that the data used in these facilities is secured. Any such violation of privacy will make the news. Citibank was notoriously known to be one of the worst offenders of privacy violations however from what I have read if I recall correctly.

No, the notification does not pertain to money laundering and terrorist funding since those rules are already established under the Patriot and FISA acts and other methods. Large cash withdrawls always require a check before you can withdraw money. This has been the process in place and they can deny funds if they think its being used for terroristic activities.

The notification is essentially saying to law abiding regular users of the institution that they can be notified that they have to write to the bank 7 days before they can get access to their money.

In the way it was always done with any bank was that large cash withdrawls require clearance before funds can be distributed out. Law abiding users should not have this clause for all accounts since it could be used if they specifically say so for any reason of their choosing. In the old way, they would release the funds unless somehow you failed the screening process and they had cause to do so.

The 7 day notice is saying they always reserve the right to everyone to do this whenever they want to invoke this.

Law can be tricky and people can claim it means one interpretation or the other and its up to the courts to determine how it would be enforced. If Citibank ever uses this policy it will be interesting to see the court cases regarding this very issue. But the way I see it is probably how others see it.

I just wouldn't be using Citibank at all so I guess you could say I have bias in my decision based on my own dealings with them. I remember having boatloads of issues with them including with the ATM card. I just didn't like the terms and conditions of the account and the way I was treated by the institution and how they dealt with the consumer.

Another bank has been vastly superior to me in every regard even though it wasn't totally perfect but I don't expect perfection. They honored their commitments and treated me really nice and dealt with me in a pleasant and friendly manner, just minor flaws which didn't affect me in any way negatively.

Im going on my banking rants now I know. But as you can tell Citibank is not an institution I find favorable.

chocula said: If you ever go to your Citi branch and they do not have enough cash to cover your withdrawal for that day, go to the next one down the street.

Banks keep very little cash on hand and will sometimes run out.


I'll let you in on a dirty little secret. Banks have to order cash from their central vaults. If they forget to order the cash, they will run short/out. They actually forecast how much cash they will need on hand. Imagine a branch forgetting to order cash on thursday. Their friday will be an absolute mess.

I hate Chitty bank as much as the next guy, but this seems pretty standard.
Fractional-reserve banking is practice in which banks keep only a fraction of their deposits in reserve.
That way they can invest most of their deposits, without the liability if too many customers demand their money.
The Fed sets the reserve rate, which is the minimum that must be available for withdrawls.

I like the Capital One policy of no requirement for checking and 20+ days for Savings since one can transfer from savings to checking to receive the funds in cash without any notification requirement. Seems so obvious though that people would use the Checking account for withdrawls so I don't know why the 20+ day notice is required on the savings since you get 6 transfers allowed under banking regulation rules which to me is plenty.

The 7 days on all transfers without the ability to switch accounts is unsettling to me and other accounts I have had this clause and I moved out the funds into the one I mentioned above for the most part.

Ive seen plenty of banks go under and had an account in AmTrustDirect which failed due to reserve requirements however I took out my funds long before that time. I still remember the representative who said this bank has been here for over 100 years. Well not anymore, it was seized by the FDIC and sold to another community bank which happens to have branches in my area actually.

People these clauses are the exact reason why you should always have some cash on hand to last you a few days. Enough people get spooked and start withdrawing their money, even with FDIC coverage, these clauses allow for them to keep your deposits until their cash flow frees up. IMO, Citi is already bankrupt and they are merely playing accounting games and mark to market fantasy for their loan valuations. Moving your money would be wise, IMO.

I know my banks and I know them well and who to trust and whatnot and I have never gotten taken advantage of that bad except in one time with AmtrustDirect which played games with me but I got my funds out of the bank and closed the account and never looked back.

Bad banks will fail. Good banks will thrive. Constant evolutionary process. I won't comment on Citibank and will leave it to others to judge the future. But the honest truth is I wouldn't have my funds in there and that is me on a personal basis. However funds are FDIC insured.

Believe it or not, the non FDIC insured GE Capital and GE based corporate notes are very well funded and I trust them so much more than I ever will trust Citibank. In fact GE Capital has been profitable and is doing even more to secure up the assets even further. Again this is me on a personal basis. Jeff Immelt is a man of enormous credibility with me which is amazingly high as well as Jack Welsh, his predecessor. The people who ran AmtrustDirect who allowed the issues to happen with me and the inadequate reserve requirements of the bank and forced a cease and decist order was just rediculous to boot.

Trust between banker and the banked is of paramount importance. The problem with GE Interest Plus is that they need to get into the Digital signature error rather than rely on old postal procedures for certain tasks. Fortuately those 2 tasks which I needed to accomplish have been completed and I won't have those problems ever again but it does boggle the mind as to why they still use these backwards procedures for the account, but maybe from a corporate perspective they have internal reasons or just didn't get around to updating the system and never thought it mattered much.

scrouds said: chocula said: If you ever go to your Citi branch and they do not have enough cash to cover your withdrawal for that day, go to the next one down the street.

Banks keep very little cash on hand and will sometimes run out.


I'll let you in on a dirty little secret. Banks have to order cash from their central vaults. If they forget to order the cash, they will run short/out. They actually forecast how much cash they will need on hand. Imagine a branch forgetting to order cash on thursday. Their friday will be an absolute mess.

They can stil order cash, but it costs extra if you miss your order date and it is not guaranteed to get there that day.

Skipping 43 Messages...
Quick history lesson. By law accounts that would give you your money on demand were (and I believe still are) forbidden from paying interest. If a bank is to accept written directions to pay money on demand to a third party (a check). This was traditionally interpreted as meaning checking accounts could not pay interest (if you do not promised to pay on demand to a customer, how can he instruct you to pay on demand to a third party). Interest was paid by other accounts where the financial institutions reserved the right to delay payments (which permitted keeping less liquid reserves).

Many years ago, a Mass. institutions had the idea of providing customers who had savings accounts (when interest rates were much higher)with negotiable order of withdrawal. These pieces of paper looked like checks (and could be processed like checks). for a while I kept my funds in such a place just to get the interest. Congress (after a political fight) extended this first to New England institutions and then Nationwide. The result was what looked like Nationwide consumer checking accounts which technically were not demand deposits (they are NOW's).

The restrictions of withdrawals however still appear to be in effect for interest paying NOW accounts, although as a practical matter it is of little importance and is unlikely to be exercised. CITI is in no way unique.

You still have a small risk of not being able to access funds for various reason. In hurricanes I have noticed banks closing early for their employees safety (just made it by 20 minutes in one evacuation as I tried to get some funds for my own evacuation). In the thirties when there were massive bank runs, there was no provision for the government to impose limits on withdrawals . However, the Feds could regulate (standardize) bank holidays and a long holiday was declared while emergency legislation was rushed through.

In today's world of electronics there is some risk of systems failing (no phone or no electricity will block most credit card transactions (issue post Katrina in New Orleans) and most banking activities. The 9/11 incidents stopped plane travel and delayed inter bank clearing of checks and the stock market closure prevented mutual funds from being priced and made them illiquid. Money market funds were caught this way, but special Fed action let them resume payouts earlier than other funds.



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