A letter sent out to Citibank customers this month has said that starting April 1st, the bank may reserve the right to require a seven day advance notice on withdrawals from checking accounts.
New Reminder, Old Policy
The right to withhold withdrawals for seven days is a long standing Fed policy, that went into effect when the bank went back to standard FDIC coverage in 2010, according to a statement by Citibank that appeared on the Prison Planet blog. According to this statement, the requirement is part of the Federal Reserve Regulation D, and while they have communicated the requirement to their customer, they have never utilized the rule and do not plan to in the future.
The rule, also found in a Client Manual sent out at the beginning of the year, is bound to concern customers who are accustomed to being able to withdraw their funds at any time, without having to provide advance notice to the bank.
“We reserve the right to require seven (7) days advance notice before permitting a withdrawal from all checking, savings and money market accounts. We currently do not exercise this right and have not exercised it in the past,” reads the manual.
The reiteration of the rule in a letter sent out to consumers is also bound to stir up rumors of a bank run, as such rules are generally provided to protect against customers withdrawing their funds en masse. Especially with the recent financial crisis, Citibank’s highlighting their right to withhold withdrawals for even days could lead to even more uncertainty over the state of the industry.