By STEPHEN BERNARD, AP Business Writer Stephen Bernard, Ap Business Writer – 29 mins ago
NEW YORK – Citigroup Inc. agreed Monday to suspend plans to charge fees on certain kinds of checking accounts as part of a settlement reached with the New York Attorney General's office.
The fees would have affected more than 1 million customers.
Attorney General Andrew Cuomo said Citigroup failed to provide adequate disclosures about the fees, and also didn't offer a free checking program long enough before implementing the charges. Cuomo did say the bank had the right to start charging fees, but it needs to respect consumers' rights and give proper notice.
Citigroup said in a statement it was "pleased to have resolved concerns" brought up by the attorney general's office.
The fees, which Cuomo's office estimates would have cost customers between $100 and $120 a year, were supposed to go into effect Monday.
The agreement between Citigroup and the New York Attorney General comes as Congress and other regulators have been cracking down on banking fees. Cuomo said the settlement provides other banks notice that regulators wouldn't let banks institute new fees at a time when other fees, like those on credit cards, are being restricted.
Account fees had become an increasing source of revenue for banks in recent years as loan losses piled up and customers cut down on their borrowing during the recession.
Citigroup was planning to charge customers fees ranging between $7.50 and $9.50 a month if combined balances in Citi accounts fell below $1,500. Customers were also facing per-check charges of between 50 cents and $1 after the first 10 checks written each month.
The fees were going to be applied to "EZ Checking" and "Access" checking accounts.
Customers who signed up for one of the free checking accounts between Jan. 1, 2009 and Nov. 5, 2009 will not have to pay fees through the end of the year. The per-check fees will be waived for customers until Jan. 31, 2011.
"EZ" checking customers who signed up for their accounts before Jan. 1, 2009 will also avoid the per-check fees.
http://news.yahoo.com/s/ap/20100201/ap_ ... settlement
