Citibank Agrees To Extend Free Checking Account Benefits

February 8, 2010 by trisha

urage from the implementation of the Credit Card Accountability, Responsibility and Disclosure Act (CARD) only this month, the Attorney General of New York, Andrew Cuomo, had this to say in response to Citibank’s previous decision to start charging customers fees for checks on their EZ or Access Checking Accounts; “Adding unexpected fees to consumers’ checking accounts can hit families very hard in these times”.

The EZ checking account, otherwise referred to as the Access checking account, was introduced by Citibank as a totally free account option. It operated as such for the whole of 2009 and prior to this was repeatedly marketed as an account which was completely free of charges. This means that account holders did not pay the normal $7.50 to $9.50 maintenance fee (dependent on your state) and they were also exempt from paying the customary $0.50 (for the first 10 checks) or $1.00 for all checks written thereafter.

However in November of last year the bank decided to start imposing a monthly fee as well as per check charges on the account if their balances dipped below $1,500.

This signaled the Attorney General to spring into action in defense of the consumer. He argued that the time frame for implementing the charges was way too short. This is a complaint that would have been hard for Citibank to dispute in light of the recent implementation of the CARD Act 2009, which states that cardholders must be given 45 days notice of any material changes to their card agreements.

Although the time frame in this case was actually within this guideline, the Attorney General was evidently able to bargain for a much longer grace period in light of the fact that the account was customarily marketed as free.

Under the terms of the extension, the following was established;

  • Customers who opened their account between January 2009 and November 5th 2009 will pay no maintenance fees on their account until December 2010.
  • Customers who continue to meet the original stipulations of the account will pay no check fees until January 2011.

This move has saved the banks’ collective customers millions of dollars. It should be heralded as a victory on behalf of the consumer but it should also be a testament of the banking industry’s willingness to bend in the face of changing sentiments towards the financial services sector.

The era of the free lunch may be over for new Citibank EZ Account customers but at least existing customers have a chance to adjust to the new conditions.


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