Late last month, Citigroup sent notifications to their customers across America informing them that they may be required to submit an advanced notice of seven days if they want to withdraw money from their bank accounts.
After the announcement of the policy to take effect on April 1, John Carney of the Business Insider stated that “the image of banks locking their doors to keep customers from making withdrawals during a bank run is what immediately came to mind…”.
On Citibank statements sent out to their customers it stated, “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”.
According to Future of Capitalism, this warning only applies to customers in Texas and it is said that the notification had been mistakenly included on statements nationwide which some say doesn’t exactly inspire confidence in Citi.
There has been mixed emotions about the announcement. Some ask if this is an April’s fool’s joke, while others are considering moving their monies into local credit unions to protect their assets, which could be prospective of a general strike.
Since the announcement Citibank has 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.”