Citi Customers Angry About Gov't Plans
By Erin Conroy and Sara Lepro
AP Business Writers
The sight of a Citibank logo makes Rumi Turkel cringe. She's seen her banking fees climb, and found out Tuesday that interest rates on her savings accounts have fallen again. That's not to mention the substantial amount of money she says her family has lost from owning stock in the bank's parent company, Citigroup Inc.
Like other Citi customers interviewed by The Associated Press on Tuesday, she is infuriated that the company has reportedly approached regulators about expanding government ownership of the bank, which has already received $45 billion in bailout money and guarantees to cover losses on hundreds of billions of dollars in risky investments.
"It's painful, really, to think about," Turkel said as she walked out of a bank branch in her neighborhood on Manhattan's Upper West Side with her young daughter in tow. "We've lost a lot of money, but that was mostly our personal choice, and a very painful one. I don't know if taxpayers should now be forced to give their money to these banks."
Citigroup has approached federal regulators about additional steps the government can take to help the still-struggling bank, including increasing its ownership of the company, according to people familiar with the discussions. They spoke on condition of anonymity because they are not authorized to speak on behalf of the government or the company. A Citigroup spokesman has declined to comment on that issue.
Outside of a Citi branch in midtown Manhattan, Oscar Shapiro said he is opposed to the government holding stakes in banks because "they aren't set up to manage a bank." But he acknowledged there are few other options.
"There's nobody in the private sector to (bail out the banks)," he said. "We the taxpayer have to do it. We're the only alternative. We're the last resort."
Jan Rodriguez, interviewed on the Upper West Side, said bailing out the banks "is the biggest mistake this country could make."
"We're trying to prop up a system that's basically bankrupt," said Rodriguez, rolling her eyes. "Any sane person would be concerned about their money, even if it is insured."
The bank's problems have raised questions about whether customers are likely to flee to its competitors.
Jerry Watson doesn't see the point of switching. None of the banks are stable, he said.
"It is scary to know they could be in trouble," said Watson, who has been with Citibank for 11 years. "If someone like a Citigroup can falter, you have to wonder who else is going to falter that is not as big."
In response to a query about the comments from customers, Citibank said in an e-mailed statement: "At Citibank, we continually strive to serve our customers with outstanding products and service. Citi continues to focus and make progress on reducing assets on our balance sheet, reducing expenses and streamlining our businesses for future profitable growth."
Other Citi customers interviewed Tuesday said they also weren't planning to take their business elsewhere. But, like Turkel, they're not happy as they find themselves paying more for bank services — something that is happening at other banks as well as they try to recoup some of their massive losses over the past year.
Jamie Polaski said he's noticed $10 fees over the past month for overdraft protection on his checking account, which used to be free.
"I don't use the feature now," said Polaski, who was banking in midtown Manhattan. "It was one of the great features."
Copyright 2009 The Associated Press.