Insurance News

Citibank, in Settlement, Extends Free Checking

Posted on: February 5, 2010

Citibank?s EZ checking account will remain free for many customers for a while longer.

The Citibank EZ checking account is going to remain free a while longer for many bank customers.

Today, the New York State attorney general?s office announced that the bank would allow over one million customers to keep their free checking for another year. In November, the bank had decided that starting today, anyone who didn?t have an average balance of at least $1,500 in combined accounts would have to pay monthly fees or per-check charges.

After the attorney general?s office made inquiries about the amount of notice it had given customers, however, Citi agreed to allow people who had signed up for the accounts from Jan. 1 to Nov. 5, 2009, to keep their free checking until Jan. 31, 2011. Also, any consumers who follow the original rules that came with their Citi checking account (say, using direct deposit or making a certain number of online banking transactions each month) will pay no per-check fees until a year from now.

The agreement applies to all accounts, whether the customers live in New York State or not.

?If you signed up for free checking, the bank can?t change the terms? and must extend the offer for a reasonable period of time, Andrew Cuomo, the New York attorney general, said at a news conference announcing the agreement with the bank. ?We are defining reasonable, in this context, to be for one year.?

If you have an EZ checking account, you should be hearing shortly from the bank about the settlement. You can read the letter outlining the attorney general?s agreement with Citi here.

As I mentioned in a previous column, free checking accounts may become endangered now that some revenue from overdraft charges is likely to disappear. Other banks will no doubt try similar ways of changing account terms.

Has your bank made any changes yet? Or has it pitched you on opting in to overdraft services?

Copyright 2010The New York Times Company

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