CITIBANK depositors have at least 100 days to close their savings, checking and time deposit accounts as the company starts downsizing its Guam operations to strictly consumer loan and credit card services by Feb. 28, 2014.
Citibank also said recent federal regulatory changes, particularly the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, have made it more practical for the banking company to transfer its Guam mortgage loans to CitiMortgage in the U.S. in January.
On Friday, Citibank started mailing out notices to consumer and commercial banking customers, as well as mortgage loan clients, informing them of the company’s plans to cut its Guam operations next year.
Agustin Davalos, Citi country business manager, said the decision to transfer the company’s Guam mortgage portfolio to the U.S. also necessitated a deeper look into Citibank’s strategies for its overall operations on the island.
“As a result, we have made a decision that we will be closing all customer deposit accounts because when we transfer our mortgage portfolio to the U.S., we will find ourselves in a very liquid position,” Davalos said.
He said all deposit accounts – including time-deposit accounts – will be closed by Feb. 28, 2014. He added time deposit accounts that will mature beyond end-February next year will be pre-terminated. All services associated with the deposit accounts, such as online banking, ATM, and fund transfers will also cease next year.
“We mailed notifications to all our customers of this change in the business with the necessary information on what is changing, by when and what they have to do. We’re talking about customer deposits here. We maintain a liquid position to return 100 percent of customer deposits (anytime beginning Friday),” he said.
With the termination of all deposit account services, Citibank will stop processing off-island checks for deposits after Feb. 13, and on-island checks after Feb. 24.
Davalos pointed out that the decision to downsize Citibank’s Guam operations “is not a financial issue. We are extremely liquid. Customers can take their deposits anytime.”
He said Citibank will continue servicing personal loans and credit card customers, meaning the company will continue giving out consumer loans, as well as process credit card applications and payments.
“We remain committed to servicing our personal loans and credit cards customers. The branch will remain open to service those customers,” he said.
Davalos said the implementation of the Dodd-Frank Act has compelled Citibank Guam to move its housing loan portfolio to the company’s mortgage arm in the U.S. beginning January 2014.
“We have an important mortgage business on Guam and we keep those mortgage loans in our books, which is different from other institutions. We keep all those mortgages in our balance sheets on Guam and now we have to comply with these new regulations,” he said.
He explained Guam’s mortgage industry is regulated by the same agencies in the U.S., which makes it impractical for Citibank to have separate systems and platforms for its local and mainland operations.
Davalos also underscored that the transfer will not change the terms and conditions of the loans.
“The tenure and interest rates will stay the same. The only thing that will change is who will provide the customer service, where the customers pay and who they will call when they have a question or need loan modification,” he said.
Citibank Guam’s mortgage customers will start receiving their CitiMortgage welcome packets in December, which will contain important information about the transition.