Citibank's dose of morality
I've been following an interesting story this week involving Citibank and a start-up company called Fabulis. It's a social networking site for gays and lesbians.
The company's CEO Jason Goldberg posted this on the Fabulis blog Wednesday:
In a bit of strange and disturbing news, fabulis discovered today that someone(s) at Citibank had decided arbitrarily to block fabulis' bank account due to what was described to us on the phone as "objectionable content" on our blog. In fact, the account -- it turns out -- was blocked a few days ago without anyone letting us know about it by phone or email.
Mind you, fabulis is a serious business, backed by some serious players, and for the life of us we can't find anything "objectionable" on our blog besides some good humor, some business insights, and some touching coming out stories from some great and fabulis gay people.
Goldberg's post was picked up by other blogs (see: Does Citibank Suffer From Homophobia Or Just A General Dislike For Startups?). Last night, Citi's management [responded directly to Goldberg](Citibank responded with an email](), saying Citi employees made a mistake in blocking the Fabulis account for objectionable content:
I truly regret any unintended message that my employees may have conveyed about your new business venture. I place great value on your business and assure you that Citi is committed to the gay, lesbian, bisexual and transgender communities. In fact, this week Citi has announced the financing for the True Colors Residence, a housing facility for homeless GLBT youth in New York City.
Goldberg -- a Citigroup shareholder, by the way -- says he's still deciding whether to keep his business with Citi.
But this may not be an isolated case. Earlier this month, an entrepreneur in Florida had a similar response from Citi. AG Newmyer tried to open a checking accounting for his new web company, Silly Underwear (check out the Too Big to Fail briefs). Here's what happened with Citi:
After Newmyer handed over the paperwork required to open an account, the assistant branch manager asked him the specific nature of the business. He directed them to the Web site.
Two days later he received a call from the branch manager, who explained that Citibank couldn't open the account. The nature of the business could be embarrassing to the bank, the manager explained. A Citigroup spokeswoman in New York issued a statement: "While we don't comment on our customers, we typically decline accounts associated with content that the general public may potentially find inappropriate or offensive."
But is the bailed-out banking giant particularly sensitive to the phrase? Shortly after getting dissed by Citi, Newmyer drove down the road and opened a small-business account at Regions Bank. Regions employees laughed when he explained his product offering, Newmyer said.
Hmmm. Citi can reject business from whomever it pleases. But can the taxpayer-rescued bank afford to be taking this kind of approach? Besides, there are few things more infuriating than a corporation or government that sets some arbitrary policy for determining what is and what isn't "objectionable" (see Apple from earlier in the week). Fabulis CEO Jason Goldberg raises the key point here:
We want to turn the page on Citibank and fabulis. But we believe there is a bigger question about the way Citi conducts its business and why it feels it can determine what is inappropriate or offensive. And that question is not just for we here at fabulis, but for a much broader audience.