We pointed out way back on November 11, 2008 that Citigroup had been taken over by Indians. We have nothing against Indians, but their way of running a business is not what most Americans would expect – Indian management appears to be more honest.
A new advisory being sent by Citigroup to its account holders could be in preparation for a Depression-style bank run if the economy takes a turn for the worse (which is now the case).
“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.”
A corresponding advisory can be read on page 23 of Citbank’s Client Manual effective January 1, 2010, which can be read here from Citibank’s own website.
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.
In a “clarification,” of dubious origin, Citibank supposedly stated:
“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.”
Whether or not Citibank actually made this statement, it is true that the Federal Deposit Insurance Corp., which guarantees individual accounts up to $100,000, only has about $50 billion to “insure” about $1 trillion in assets across the nation’s financial institutions.
That’s only about 5% of the total deposits out there.
Maybe Citigroup’s Indian management is more truthful than the good-old-boys they replaced.