Welcome Guest
( Log In | Register )
The time is now 10:21 am
You last visited December 18, 2017, 9:44 am
All times shown are
Eastern Time (GMT-5:00)

Checking Accounts "Citi Warns of Withdrawal Gate -- Seeking Alpha

Published:

Last Edited: February 21, 2010, 10:05 am

Suggest reading the top link first, as Denninger located a copy of Citi's disclosure statement and finds no wording where this is limited to Texas accounts only.

___________

"Citibank: No More DDA Accounts - The Market Ticker
http://market-ticker.org/archives/1985-Citibank-No-More-DDA-Accounts.html

______

"Citi Warns of Withdrawal Gate

by: Ira Stoll February 19, 2010
Source Seeking Alpha
 
Source SeekingAlpha.com
 
"Seen on a recent Citibank (C) 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."

Whoa. Is this an April Fool's joke? A contingency plan to defend against the idea of what "would happen if thousands of [bank] customers pledge to withdraw their money from the bank on a certain day, unless the bonuses are capped?" A strategem cooked up by Citi's new shareholders from the hedge fund industry, an industry in which such withdrawal gates are common? An idea backed by Citi's big shareholder, Uncle Sam, or one of its regulators, Sheila Bair?

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. Whatever the explanation, it doesn't exactly inspire confidence in Citi. I've got nothing against Citi as a general matter -- I have friends who work there, and know some account holders who are generally satisfied customers. But it's hard to believe a bank would be sending out a notice like that on its statements.

http://stockwidget.seekingalpha.com/article/189605-citi-warns-of-withdrawal-gate

Entry #1,647

Comments

1.
JAP69Comment by JAP69 - February 21, 2010, 11:45 am
Thanks Konane.
Something smells here. Just my thought is the feds want to restrict semand withdrawls for some reason. With the shortage of cash in the U.S. treasury it could be the feds may want quick access to short term funds to make commitments.
Just my opinion using quick thoughts on why this is going down. The feds access to to short term cash is probably a nicely kept secret.
2.
konaneComment by konane - February 21, 2010, 11:51 am
Thanks JAP! You're probably correct. Prudent to read the fine print of disclosure sheets sent with checking account statements for all banks. No point calling because someone uniformed could provide incorrect information, but you'd be bound by printed rules.

Likely if this passes consumer 'sniff test' rest of the banks will follow suit.
3.
JAP69Comment by JAP69 - February 21, 2010, 11:55 am
You tie in this urgency for this heath care bill has given me thoughts on "why" in the past and now after reading this.
Just could be the feds want more funds flowing thru the treasury for use other than health care. What has happen to all the social security funds, Placed in the general funds acct. Plus any other taxation that is reserved for its intended purpose but the funds placed in the general acct.
The feds are not being up front with the citizens here.
It stinks.
4.
konaneComment by konane - February 21, 2010, 1:21 pm
Thanks JAP! Chris Story of WorldReports.org/news has characterized the proposed health care funding as a slush fund to do with as they please. One reason I hope it becomes HealthCareGate.
5.
time*treatComment by time*treat - February 21, 2010, 2:13 pm
A few things are happening. First, there is way more 'electronic' money than there is physical currency. People who don't have much of it tend to remove what they have left from banks. Second, this is one of the large banks targeted in the 'Withdrawal Tax' campaign. http://www.lewrockwell.com/north/north796.html You know how some of those crazy 'netizens' can be when they put their minds and money to it. Citi is just getting ahead of the (potential) angry curve. That's not the whole story, but you know, that could fill a book.
Texas is a huge state, with a diverse population. Many things are 'test marketed' there ... first.
6.
konaneComment by konane - February 21, 2010, 4:17 pm
Thanks Time*treat! I expect it won't be well received in its test market either.
7.
Comment by GASMETERGUY - February 21, 2010, 8:24 pm
In years past, before electronic transfer came into its own, banks normally kept a check for seven days before posting the amount to an individuals account. This created a "float" from which the bank lent money. There were about as many checks going in for deposit as coming out so the banks had this "float" to manipulate. Electronic transfer has all but killed the float. Sounds like this is another method for the banks to increase the amount of their float and thus the amount they can loan to customers.
8.
konaneComment by konane - February 21, 2010, 11:07 pm
Thanks Gasmeterguy! Excellent point, you may have hit the nail on the head.

You must be a Lottery Post member to post comments to a Blog.

Register for a FREE membership, or if you're already a member please Log In.