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

Comment #8

konane — Mon, 22 Feb 2010 04:07:21 GMT

Thanks Gasmeterguy! Excellent point, you may have hit the nail on the head.

Comment #7

GASMETERGUY — Mon, 22 Feb 2010 01:24:39 GMT

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.... [ More ]

Comment #6

konane — Sun, 21 Feb 2010 21:17:45 GMT

Thanks Time*treat! I expect it won't be well received in its test market either.

Comment #5

time*treat — Sun, 21 Feb 2010 19:13:15 GMT

Texas is a huge state, with a diverse population. Many things are 'test marketed' there ... first.

Comment #4

konane — Sun, 21 Feb 2010 18:21:11 GMT

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.

Comment #3

JAP69 — Sun, 21 Feb 2010 16:55:15 GMT

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.<br />The feds are not being up front with the citizens here.<br />It stinks.<br

Comment #2

konane — Sun, 21 Feb 2010 16:51:18 GMT

<br />Likely if this passes consumer 'sniff test' rest of the banks will follow suit.

Comment #1

JAP69 — Sun, 21 Feb 2010 16:45:23 GMT

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.<br />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.

Original Blog Entry: Checking Accounts "Citi Warns of Withdrawal Gate -- Seeking Alpha

konane — Sun, 21 Feb 2010 15:01:35 GMT

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.

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Citibank: No More DDA Accounts - The Market Ticker

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

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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

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