Citigroup Warns Customers It May Refuse W/Ds...

http://www.prisonplanet.com/citigroup-warns-customers-it-may-refuse-to-allow-withdrawals.html
What’s going on? It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at The Future of Capitalism. It was accidentally included on customer statements nationwide.

The trader in me tells me to GTFO of Citi if you have any $$$ with them. We used say on the desk "sell first, ask Q's later". But something's fishy. FDIC? Hmmm...not sure if that covers this scenario. Texas, yes, I saw that too - still makes very little sense. But if I had money in Citi today, I wouldn't tomorrow. justmy2

V65

If Citi does it, they'll all do it.
Sort of flies in the face of the term on-demand-deposits.
Does anyone really think that Citi is any healthier than they were a year ago?

"If Citi does it, they'll all do it."

Not sure if I agree with you with this. We also had a another saying on the desk, "the last is always right". "Last" meaning the last price of the stock. Comparing C with other banks, this looks like a sick puppy.

I'm religious about risk management, this one looks like a no-brainer to me. I'd GTFO of any $$$ in a Citi account. Worst case, nothing happens. Best case? Well...

Once again, justmy2.

Like Bill Mahr calls them: "Shitty Bank". Gotta get my $ outta there!

Actually, no $$$ in Shitty Bank. Just a checking account. $$$ are with Sanford Bernstein. So far, so good. Lost a lot-- but at least it wasn't ripped off from me, a la Bernie Madoff.

Truth - I was actually talking about checking accounts so I'd move your $$$ out of there. My apologies if my post was confusing. I only used the trading lingo to point out potential problems with Citi as a whole. As RS said, the letters were only meant for Texas customers, but somehow they F'd up and sent them out nationwide. I may end up as the boy who cried wolf, but better safe than sorry imo.

Someone trying to start a run on Citi? Soros and Paulson recently increased their long positions. FWIW. Shorts as of 1/29 a mere 439 million. New numbers soon. GG. I don't trade financial stocks.

GG - At ~ $3, fair to say the the short trade's over. Soros and Paulson adding? Doesn't mean much to me. Never followed anything except my own P&L. Damn it, you got me to talk trading. arrrrghhh. ;)

Again, I have no position in C, I only wanted to point out the checking account news.

UPDATE: According to Stoll, Citi issued a statement saying that it has been required to make this change by Federal regulations--and it no longer sounds like it's limited to Texas:

Update: 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."

Vintage65, did you mean P&F?

It may just be that Citibank is trying to find a way to prevent or at least slow down an increasing number of "move your money" clients who are closing down their accounts all together. I closed my Citi account a couple of weeks ago and moved the money to a neighborhood bank just up the street from the Citi branch where I did the paperwork. They all but begged me not to close the account. There were at least two other people who came in to close out their accounts during the 30 minutes or so that I had to wait to make sure that everything was properly done. I know this is anecdotal, but when I went to the neighborhood bank to open the new account, the person who helped me there told me that they had been getting a large number of new clients from Chase and Citibank in particular.

dmag - I'll have to look up Reg D when I get a chance. But truth be told, I'm a K.I.S.S. kinda guy. I guess it's something that will stay with me forever due to my trading background. I never ask why or look for reasons when I smell something fishy. Most important lesson I learned on Wall St. was never trust anyone but myself. The amount of BS that comes out of DC and Wall St. is simply astounding as most of you know. To be blunt, I really have no F'ing clue what that Citibank "explanation" means. I have a checking account, i want my money, they have the right to deny me for 7 days?....Hmmmm

gaongaon - Forgive my ignorance, but what's a P&F?

cherrywood - You may be right & I hope this is nothing significant. As much as I hate Citi, if Citi should go belly up, it would be a nasty headline and destroy sentiment in this already fragile "recovery".

I hope Citi not only survives but thrives--all of us are better off if it does. Having said that, it has been disfunctional for many years now. And I don't have the patience for any of it. Our money left Citi a year ago and headed for a bank with less drama. I don't have so much money that if something goes wrong and I lose a lot of it I'm okay with that. I'm not. I have a portfolio and financial plan that blends investments with different types of risks to form an overall package I am comfortable with. The portion of that portfolio that is in bank accounts is in my 0% risk category. I don't need headaches. If one bank is solid and one is struggling, why on earth would I leave my money in the one that is struggling? Especially with no added value. And in terms of checking accounts and simple savings accounts, there is nothing Citi offers that's better in any meaningful way than the bank where we now park our checking accounts and the money we keep as "cash on hand" in savings accounts.

Vintage, I agree, interesting that it wasn't an accident and that it wasn't just meant for Texas. I've never heard of a requirement of the right to freeze a checking account for 7 days in order offer a promotional rate.

I am going to call first thing in the morning and give them my 7 day notice. Something sure does stink, if you ask me.

It takes too long to get your $$ out of ANY bank. With today's technology this should be one business day it often takes a week. Simply reason: banks benefit from getting the float interest.

This has been bothering me, so I dug some more. In a nutshell, I fear that Citi and even BAC may be in more trouble than what we are being told.

Three things pop out at me and I think some members here may have brought these up.
1- The coming 2nd leg of residential ARM resets,
2- Bad Comm RE loans on/off their balance sheets not yet in the mainstream headlines.
3- Citi's ties to Dubai.

I have no stats and I fear only the parties (including the FED) know how bad the real situation is. When you look at what's going on though, something does smell.

samadams - Depending on your checking account balance, I wouldn't even call them. Don't tell them you're closing your account. Simply fill out a normal withdrawal slip for as much as possible and leave a symbolic amount ($500 - $1,000?). This way you don't have the manager running up to you and wasting more time. Then go to the ATM and take out the balance.

Bernie123 - Yes, you're right. Moreover, the bank reserve requirements are set up by the Fed so that no bank could cover its deposits. That's where the FED steps in if need be. Banks make money off our money. But even that's ok with me, for that's what a bank is supposed to do. Lend money - our money to others for a profit. But when a demand account is now potentially held hostage for 7 days, that to me is a RED FLAG.

I can't help but wonder if other banks with weak balance sheets will follow. More to come I think...

Thanks: I will close down that account!

They're all f'in crooked. I went to deposit some checks to Capital One checking account. Checks drawn on COF can be cashed immediately. but if you want to deposit them, they "take" two days to clear. I told the cashier that I wanted to cash them, and then redeposit the cash. A "higher up" came over and told me that since it was Sat. it was considered Monday, and therefore the funds would be available on Monday. But that THAT THEY WEREN'T ALLOWED to take deposits on cash that had "just been withdrawn". I said, OK, I'll just go down the street to my other bank and deposit the cash. They're all a bunch of f'in crooks. This is a true story from this weekend. May they all be wiped out.
Vintage, I don't trade on TA, but most traders are cognizant of various TA systems such as P&F (point and figure charting, I think it's called, candlesticks, etc etc) Me, I'm a gut trader, but certainly not based on P&L. Chill.

I have banked with Citi for 15 years. They have never charged me a fee, even though I don't keep a large balance, and when I deposit a check they treat the deposit as "cash" the second it is deposited. Last November, when I had trouble with a non-bank ATM that didn't dispense cash, Citi refunded my account immediately while they researched the matter. On a credit card, they give me 1% cash back, and while it's not a lot, there is never an annual fee. I challenge you to find any local NYC bank with the convenience in number of branches that treats its long term banking customers as well as Citibank. Thank you for the chicken little warnings, but I'm very happy with Citi.

kyle - I left Citi a LOOOONG time ago when I started to realize they didn't "need" my business. I learned from a man with over 50 years in business that customer service is #1. You're 100% correct, we certainly don't need headaches from our banks of all places. When I was a little kid, I remember opening up my first savings account and felt like I had just put my hard earned money into Fort Knox. Now it feels more like...hmmmm, I can't even come up with the word. Sad. Let's just say I know what you mean.

GG - I didn't know you were a trader. Then yes, I know P&F charts. There was a time when I first started that I looked at most trading methods under the sun. Since it's past midnight and I think most SE'ers have gone to bed, I'll indulge in a bit of trading talk with ya :)

"P&L" = Profit & Loss: The only thing that mattered was my P&L. Did I make money or lose money? I had so many traders under me who were 100x smarter who couldn't trade to save their lives. I know it's about ego. You analyze a situation, open a position, position, it goes against you, you don't get out becasue you "know" you're right...etc...Above when i said, "Never followed anything except my own P&L", I meant that no matter WHAT I BELIEVED, it didn't matter. The only thing that mattered was what my P&L was telling me. If I was losing $$$, I got out.

TA, fundamentals (aka "funnymentals"), black box trading, blah, blah, blah...in the end, what I have learned is to figure out the human story. Humans never change and in the end, it's still humans who trade and create those chart patterns. Fear, Greed & Hope - those 3 rascals of human nature will never change and thus the markets will never change. If you haven't already, try a book called "Reminiscences of a Stock Operator". It was mandatory on my desk for new traders and to me, one ofthe best books ever written about speculation. It was written almost 100 years ago.

Have a good night,

Vintage65

PMG - I'm glad you have had a great history with them. Hope you have many more.

Cit doesn't "need" my business, but they treat me like they do, which is pretty darn gratifying. They treat me better than any other bank would, and they deserve my continued loyalty. I know that JP Morgan Chase will not treat ANY customer deposits as cash immediately the way Citi treats mine. Vintage, if you haven't had any recent customer experience with Citi, maybe you have no basis to be such a loud mouth. Why don't you act more responsibly?

PMG - I guess you missed my first post, I ignore very well. I neither have the time nor the desire to chat with you any further. "chicken little warnings" & "loud mouth"? Very nice. Congrats on being the first one my ignore list. Have a nice day.

I'm having a horrible time trying to get CITI to give me a loan to purchase a house. Every time I meet one of their conditions on my approval, they give me five more. For example, I had to prove that my current residence, on the 7th floor of a residential building, was not a bar/restaurant/nightclub. And now they want a THIRD appraisal report! It's not like I'm a bad risk, imho. I am putting 40% down, have good credit, lifetime job security, and almost enough assets to buy the house cash, if I really wanted to go that route. I don't get it. I'm beginning to think that they are in such bad financial condition they are trying really hard NOT to lend to people.

PMG, Not to be argumentative but Chase treats all my deposits as cash on both my business and personal accounts, including out of state checks. I don't think this is such a big deal if you have a descent relationship with your bank, certainly not enough to ignore the life raft if the ship is sinking.

Not to p*#s on the parade (I'm not a big fan of Citi myself), but is anyone considering the source of the article? I mean, "Prison Planet" is a website that essentially feeds the concept that the world is coming to an end.

This whole thread falls into the category of fringe thinking. Does anyone seriously think we're going to see a bank run on citi?

Had 300K in Nuveen Funds (tax free auction rate securities that were peddled as good as cash on hand) pre crash that took nearly a year to get reimbursed on.

I expect Citi to be the frontline soldier on everything that goes wrong with the bigger banks.
Smoke doesn't always indicate fire, but I do expect Citi if and when there is fire with the majors to be the first burning.

Frankly, I was interested to learn so many connected and wealthy investors had increased there exposure to Citi common stock. I bought a small block of shares and in a week I'm up nearly 8%, so, apparently, the "run" on the bank is going in the wrong direction.

Phew! What a relief!
I thought they were going to refuse to finance apts with washer/dryers.

Move along folks. Nothing to see here.

I would respond to some of the replies, but based on the other comments, I'm beginning to think this type of discussion doesn't belong on SE. If it does interest you though, read about it on some of the financial websites or just google it.

Forgive me for posting a useless thread, I am new to SE.

PMG, take the money and run. If I had the...I would go full position into FAZ. So back to relentless 24 hour trading, thank you CVM. Don't get greedy.
Vintage65: you'll be much happier on SI.

Aboutready, is there a way you can sue and get triple damages because of this? I'm not presuming you have money there, just certainly you are entitled to money damages, right? Maybe you can get a free toaster and free toilet seat too.

Citi common stock was up big today. The stock has made a 20% gain in about a month. So glad this "run on the bank" thread gave me the confidence to boost my profits. Way to go, Vintage65