Banks to require 7 days notice before withdrawal of money

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etsan's picture
etsan
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Banks to require 7 days notice before withdrawal of money

Hey Everybody,

Haven't been here in awhile. Anyways, I came across this after looking at my bank 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."

So what do you guys think? Anything to make of it?

ao's picture
ao
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Re: Banks to require 7 days notice before withdrawal of ...

Very interesting.  Which bank?  I had an episode a couple of years back in which I went to my local branch to withdraw cash to buy a car.  They seemed a little anxious after I made my request.  They said this was a large amount and why couldn't I write a check.  I explained that it was my perogative as to how I wished to pay for the car and I chose cash.  They told me I would need to get it from the main branch.  I politely insisted that this was the branch I dealt with, this was where I deposited my money, and since I didn't plan on driving miles farther, this was where I wanted my money from.  It turns out, they didn't have it.  I have to admit, it was rather amusing making them sweat for awhile but we finally came to a compromise on the issue that worked out to my benefit.  Sounds like your bank is worried about a possible run on the bank.

 

G-Money's picture
G-Money
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Re: Banks to require 7 days notice before withdrawal of ...

etsan -

I am assuming that you are referring to Citi bank (I have seen some other grumblings around the interwebs). Now while I would expect this kind of protective language for time deposit accounts (i.e. savings) it does seem odd to see it applied specifically to a demand deposit account (i.e. checking). It also begs the question of just how one would go about notifying the bank that you plan on writing a check in 7 days. Or maybe it means that, while it used to take a day or two for checks to clear, it will now take up to a week. Who knows.

What I do know is that FDIC is a complete joke. At some point there is going to be a run and it will be interesting (horrifying) to see how the government responds to that.

G

Davos's picture
Davos
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Re: Banks to require 7 days notice before withdrawal of ...

I submitted Elizabeth Warren's video http://www.youtube.com/user/oversightpanel for consideration to the Daily Digest. It details where almost 3,000 community banks run the risk of being brought down by the CRE wave that hits shore from now - 2014.

Last year I also posted on the DD CBS's piece on the 1.5 trillion dollar wave coming to shore spring/summer/fall of 2011 (Alt-A's and Option Arms).

From everything I have read, banks are aware of both waves and their weaknesses. The Fed has proposed 4 trillion more in assistance. Another 25 trillion is being set aside for derivatives that trade OTC.

If we know- the banks know.

Redemptions at money market accounts are subject to not being redeemed as well.

I'm not surprised to read what you posted. 

rhare's picture
rhare
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Re: Banks to require 7 days notice before withdrawal of ...

"Effective April 1, 2010"

Early Fool's Day Joke?  Just not sure who the fools are....Laughing

etsan's picture
etsan
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Re: Banks to require 7 days notice before withdrawal of ...

G-Money you are correct. It was Citibank.

Rhare, it is not a joke. If it was, its a terrible time for banks to being doing that kind of stuff. Especially, when you are messing with peoples money.

Anyways, I decided to call my bank and ask them some more details in regards to what this all means. They said that it means that when you go withdraw cash that they can decide to not give it to you until 7 days later. Their reason was that if you need a large amount that they needed time to prepare the money for you. So I asked them how much is a large amount? They said $5000 or more. To me, five thousand is not that much and to have to wait that long to get your money is bothering me. Also, I don't know if its true, but they said that all banks will be required to do this as well. I'm thinking this might stir up a little panic. At least with some of the people I told, they were seriously concerned and wanted to start withdrawing some money right now!

The question is what made them start implementing this requirement? Something must've happened for them to do this since they have never done this in the past.

John99's picture
John99
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Re: Banks to require 7 days notice before withdrawal of ...

Time To Leave Citibank Folks - Citi Warns of Withdrawal Gate

 

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."


http://snardfarker.ning.com/profiles/blogs/time-to-leave-citibank-folks

rocketgirl1's picture
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Re: Banks to require 7 days notice before withdrawal of ...

I suspect that a 7 day delay will allow the deposits to stay on the banks balance sheets a little longer for the banks to gain in several ways.

Fractional banking ie; more on the books to lend.

More time controls on possible bank runs

Starting off with "large amounts" then leading to smaller amounts?

My family works on a cash budget where I withdraw cash on paydays and we use the cash for food, etc. until the next payday.  This really pisses me off and they (the banks), in my mind, have no right to do this!  With electronic/automatic check deposit there should be zero delay in funds available to the customer.  Zero delay for the banks vs 7 day delay for the owner of the funds, WTH !!!!

 

 

 

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rhare
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Re: Banks to require 7 days notice before withdrawal of ...

Rhare, it is not a joke. If it was, its a terrible time for banks to being doing that kind of stuff. Especially, when you are messing with peoples money.

Hmm, my sarcasm/humor didn't come across very well.  This has actually been going on for a while.  Back in late 2008 I wanted to withdraw a fair amount of cash (about $10K) but when I went to my CU was told they didn't have the cash and I would have to "order" it and it would take several days to be delivered.  I even asked about traveling to several branchs and was told I probably couldn't withdraw more than $3K.  I actually had to place an "order" for cash. Needless to say I was shocked and wondering if I was in the middle of a bank run and just didn't know it.  The odd thing was in summer 2008, just a few months earlier,  I did the same thing to buy a truck (used and someone wouldn't take a check) and had no problems.

I have found a great solution, I'm just spending it all, soon I won't have to worry... Tongue out

And actually it is a joke, just we are unfortunately the butt of it.

jh355's picture
jh355
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Re: Banks to require 7 days notice before withdrawal of ...

 

It continues to amaze me how Americans blindly “believe” in our Banking system.  I’ve traveled the world, and in almost every other country, people have fairly large “stashes” of cash at their disposal, outside of the banks.  While traveling in Russia, I viewed a customer open up their vault, and viewed just under 5 million Rubles ($200,000 USD at the time).  They also had USD, and EUROs just in case another Perestroika happened along.  I suppose it will take a complete breakdown in order for folks to trust in their selves instead of the robber baron banks.  I guess the inscribed “In God We Trust” on our dollars is a warning; don’t trust those who print or distribute it, but in the divine.

pinecarr's picture
pinecarr
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ATM Withdrawal Limits

A couple of times over the last couple of years, when the economy seemed like it might be destabilizing, I tried taking cash out of ATMs,and was surprised to find I was limited to $1,000 total for the day.  A couple of times I was limited to even less than that (I think $500).  I had more money "available"; I just couldn't withdraw it.

So if people want a cash buffer outside of the bank "just in case", you may want to withdraw the money sooner rather than later, in case you run into similar (or tighter) limits placed on your cash withdrawals.

G-Money's picture
G-Money
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Re: Banks to require 7 days notice before withdrawal of ...

etsan -

So apparently Citi is now claiming it was all a big mistake (unless you live in Texas):

http://www.businessinsider.com/citigroup-warns-customers-it-may-refuse-to-allow-withdrawals-2010-2

Johnny Oxygen's picture
Johnny Oxygen
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Re: Banks to require 7 days notice before withdrawal of ...

Citigroup Can Limit Demand Deposit Withdrawals; Money Funds Can Too

http://seekingalpha.com/article/189763-citigroup-can-limit-demand-deposit-withdrawals-money-funds-can-too

This may be good for Citi but I wonder how it is legal. After all, the point of a demand deposit is to provide safekeeping for one’s money. Otherwise, with interest rates at zero percent, why not just keep your money under a mattress? I find it hard to believe that Citi can simply decide to require seven days notice. I am sure that Citi uses the standard credit card tactic of issuing all affected account holders a notice in full legalese of the changes that are being instituted, giving them an option of closing their account.

Johnny Oxygen's picture
Johnny Oxygen
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Re: Banks to require 7 days notice before withdrawal of ...

 

Banks Scramble to Save Fees

http://www.thedailybeast.com/cheat-sheet/item/banks-fight-to-save-fees/hanging-on/?cid=cs:headline1

Banks Scramble to Save Fees

You’ll be hearing about this one in the mail. With new government regulations about to radically alter the way banks charge overdraft fees on debit cards, many banks are taking a broad, aggressive approach to make sure the billions of dollars they collect every year in penalty income does not suddenly vanish. Beginning this summer, banks will be required to have customers opt in to overdraft protection. If they do not opt in and try to spend more than is in their account, their debit card will simply not work. Previously, the bank would make the money available and charge a penalty fee of up to $35 or more for the service—banks collected an estimated $20 billion from overdraft fees on debit purchases and ATM transactions in 2009, according to The New York Times. But now, the scramble to convince consumers to opt in is turning into a marketing blitz through email, direct mailing, and telephone appeals.

rocketgirl1's picture
rocketgirl1
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Re: Banks to require 7 days notice before withdrawal of ...
Johnny Oxygen wrote:

 

Banks Scramble to Save Fees

http://www.thedailybeast.com/cheat-sheet/item/banks-fight-to-save-fees/hanging-on/?cid=cs:headline1

Banks Scramble to Save Fees

You’ll be hearing about this one in the mail. With new government regulations about to radically alter the way banks charge overdraft fees on debit cards, many banks are taking a broad, aggressive approach to make sure the billions of dollars they collect every year in penalty income does not suddenly vanish. Beginning this summer, banks will be required to have customers opt in to overdraft protection. If they do not opt in and try to spend more than is in their account, their debit card will simply not work. Previously, the bank would make the money available and charge a penalty fee of up to $35 or more for the service—banks collected an estimated $20 billion from overdraft fees on debit purchases and ATM transactions in 2009, according to The New York Times. But now, the scramble to convince consumers to opt in is turning into a marketing blitz through email, direct mailing, and telephone appeals.

 

Granted this was a looong time ago but when I lived in MT our community credit union would just automatically transfer funds from savings into checking if your account was overdrawn.  This was a complimentary service that did not go unnoticed and kept many a customer loyal to the bank.  Just another reason to get out of big banks and go local.  To this day we still have an account with this bank and when we have questions regarding our credit union credit card I can call the bank directly and get an employee at the bank to handle the changes, etc. and it's not some bank paid foreign employee in India !!  

idoctor's picture
idoctor
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Re: Banks to require 7 days notice before withdrawal of ...

7 day notice mentioned in this video.

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