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Consumerist: Citibank
newcti.jpgMeet Citi's new CEO, Vikram Pandit! He replaces

The only option to avoid this jump is to cancel the automatic payment (and lose the interest rate reduction). Of course, this doesn't help if they are going to report you as not paid-in-full or as delinquent to the Credit Bureaus. It seems very shady that they would suddenly up your payment, charge late fees from 2 years ago, and not provide any notification. From what my wife understood from her conversation with the CSR, this is something they've done with loans across the board, including some which may have been listed as paid-in-full.

I've attached screen shots of our October and November statements for comparison. (Looking at the November statement, it appears that they've actually already applied the late payment and reduced the amount applied to principal, so we're paying interest on principal that should have been paid with the October payment as well.)

-Sean

While we respect CitiBank's right to correct their banking errors, it seems kinda rude to do it without giving people a heads up. Like Sean says, for those out there who sometimes keep their bank account barely above zero, such as poor students, this correct could come as a most unwelcome surprise if it results in an unexpected overdraft and overdraft fees.

If you have a student loan with CitiBank, either current or paid off, might want to check and see if they plucked an extra Ulysses S. Grant from your account for November.

  • citibankchicago.jpgGoldman Sachs has downgraded Citigroup, the nation's largest bank, estimating that it will have to take a $15 billion hit due to its exposure to the subprime meltdown. Two weeks ago, Citigroup estimated that its mortgage related write-downs would total from $8-$11 billion as its CEO, Charles Prince "resigned."

    Goldman analyst William Tanona wasn't thrilled with Citigroup's decision to pink-slip its CEO:
    "The lack of leadership at this point in Citi's storied history could not have come at a worse time," Goldman analyst William Tanona wrote in a note to clients. "With deteriorating consumer and housing metrics, Citigroup is facing mounting pressure across many businesses." Citigroup's stock is down 39% on the year, and Tanona fears that the subprime debacle may be spreading to the consumer credit markets:
    Goldman estimated Citigroup will have to book $15 billion in write-downs over the next two quarters related to its $43 billion in exposure to complex securities called collateralized debt obligations. Citigroup already has said it expects to see a loss of $8 billion to $11 billion on those positions. Goldman expects the bank to take the full $11 billion hit and then another write-down of $4 billion in the first quarter, an estimate based on weakness in indices that serve as proxies for the value of mortgage-related securities.

    The situation isn't very sunny outside of the investment-banking unit, either. Citigroup will feel "the pain" of a worsening consumer-credit environment in its retail banking and cards divisions, the Goldman note said. Gosh. It sounds like Citi needs a hug.
    byechuck.jpgCitibank's chairman and CEO Charles Prince announced his resignation Sunday, citing the subprime meltdown as the reason for his departure.

    "It is my judgment that given the size of the recent losses in our mortgage- backed securities business, the only honorable course for me to take as chief executive officer is to step down," Prince said in a statement issued by Citigroup. "This is what I advised the board." An interim CEO has been chosen as the nation's #1 bank faces up to $11 billion in additional subprime writedowns.

    Which CEO will the subprime meltdown take next?

    moneysmall.pngCitibank downgraded by analysts. "They don't have enough capital, pure and simple," says one. "They will have to address that, ASAP." The subprime meltdown rolls on.[cancelbutton.jpgAfter reading our posts about getting your credit card APR lowered by threatening to do a balance transfer to a lower rate credit card, Brandon got his Citibank Mastercard APR lowered from 15.74% to 1.99%. It's an introductory rate that goes up to prime plus 4.99% after a year, but it's definitely worth it for the time being. A factor that probably helped him was the $10,000 balance he was carrying, making his business more valuable to Citibank.

    Writes Brandon, "They probably saw the ten thousand dollar balance and figured it was worth it not knowing that 3/4 is tuition that the company pays back next month."

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