Citibank settles free checking dispute

ALBANY, N.Y., Feb. 2 (UPI) -- New York State said it reached a nationwide agreement with Citibank to keep more than one million checking accounts free through 2010.

The deal extends to bank customers who signed up for accounts requiring a certain minimum balance in 2009 and was made to settle a matter in which the bank failed to advertise that the benefits of their previous free checking policy "could be terminated at Citibank's discretion." As such, the bank "failed to adequately notify affected consumers about the change," by deciding in November to charge monthly fees on "EZ Checking" and "Access" accounts starting Feb. 1, New York's Attorney General Office said in a statement Monday.

Citibank agreed not to charge fees for the affected accounts through Jan. 31, 2011, the statement said.

"This has been a very difficult year for consumers in New York and across the country who are trying to make ends meet in may cases without a regular paycheck," said Attorney General Andrew Cuomo.

"Adding unexpected fees to consumers' checking accounts can hit families very hard in these times. Citibank is doing the right thing for their customers through this agreement" he said.