In the real world, if someone takes your money and refuses to give it back to you for seven days, he might expect a visit from the authorities and a future date in court.
But such a scenario is just business as usual for big banks these days.
How so? With a seven-day delay to get money out of your checking account.
Citibank (Stock Quote: C) is heading in that direction (or at least reserving the right to do so) with a recent letter to customers saying it may require a seven-day notice to take money out an account. It’s not a new policy, but it likely won’t inspire confidence in customers, either.
Says the letter to Citi customers:
"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."
For the record, Citi says the move isn’t to scare the daylights out of its checking account customers. Instead, it’s simply a matter of the bank following regulations set out by the Federal Reserve.Adds Citi in a follow-up letter to its checking account customers:
"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."