They say it only applies in Texas but, oopsie, the announcement went out on all their statements nationwide.
A recent SEC proclamation does the same for money market accounts.
Restricting demand deposits in a way that makes it unclear when people will have access to their funds – especially since they need daily access to their checking account or money fund – makes them more likely to withdraw funds before everyone else does. Where would you rather have your funds: at an institution with withdrawal restrictions or at one without limitations on access to your funds? In essence, the Citi and SEC proclamations make the affected institutions more vulnerable, not less.
The SEC says this is being done to protect consumers against bank runs. I say it’s more likely to increase the possibility of them happening.
I’d say banks and the government are getting twitchy about the stability of the system.