Citibank to startup: Your blog is OK and we're not homophobic

Citibank scrambles to issue an apology after employees tell a startup owner that his account was blocked over "objectionable" content on its blog.

If Citibank executives - and you, for that matter - had never heard of fabulis, a start-up social networking site for gay men, that's about to change.

One of the nation's biggest banks was scrambling today to do some PR-damage control after it reportedly froze the bank account of the startup for "objectionable content" on the company's blog that was "not in compliance with Citibank's standard policies."

Also see: Citibank's big blog faux pas

Whoa. Really? Now, let's back up and really think about this for a second. Since when does a bank have any concern at all over the content of an account holder's blog? OK, maybe if that blogger was writing about stockpiling money to overthrow the government or if he bragged about coming into a bunch of cash by being the leader of an international drug ring, then maybe I could see the bank getting the police involved. But that doesn't seem to be what's happening here.

Entrepreneur Jason Goldberg has raised about $625,000 in seed money for a new social networking site that's a cross between Facebook and Yelp and targeted at gay men and is expected to go live this Spring. Earlier this week, he posted some news about how strange it was that Citibank suspended the company's account. So, of course, he called Citibank - at least a dozen times. On at least three occasions, he was told that the suspension was due to the blog content.

But a fourth call with bank officials - following some blog publicity that labeled Citibank as being homophobic - resulted in a new story from the bank, something about the account missing some documentation.

He doesn't buy it - and I'm not sure if I do, either. Still, iIn an e-mailed statement, the bank issued an apology to Goldberg for the confusion and reaffirmed the company's commitment to diversity. The statement reads:

Citibank sincerely apologizes to Mr. Goldberg for this misunderstanding. This situation had nothing to do with the content of his web site and any comments by our staff to the contrary were incorrect; we are reviewing what happened. This was a technical issue about missing documentation that is required for new business accounts. Once we resolved the situation, we unblocked the account immediately. Mr. Goldberg is a valued customer and we appreciate his business. Also, Citi is strongly committed to diversity, including support for the gay, lesbian, bisexual and transgender community, and other organizations promoting diversity. 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.

Regardless, that blog issue didn't come out of thin air, seeing as how three different employees made reference to it. Goldberg offered play-by-play details about his interactions with the bank and this incident and said that he was at a loss about what the objectionable content might have been. The only thing on the blog, he wrote, is "some good humor, some business insights, and some touching coming out stories from some great and fabulis gay people."

More importantly, he goes on to drive home a bigger point in an entry today that should make us all stop and pause for a moment:

Whatever the reasons for the actions taken by Citibank, there are important first amendment and technology rights issues at stake, not to mention sexual orientation discrimination.  Does Citi insist on approving the content of its newspaper clients?  What about art galleries and libraries? Do they pre-approve the art?  The content of books by publishing clients. Of course not. They may have sexual orientation non-discrimination policies in place and they may outwardly do a lot of good for the GLBT community, but if their front line customer service people are not educated on them, what good does it do?  That one of their employees could raise a compliance issue around the content of fabulis which results in a recommendation from the compliance office to terminate our bank relationship with citibank is outrageous.  Clearly Citibank needs to do a much, much better job at educating its employees about how to handle diversity issues and first amendment issues, let alone basic customer service issues.

For what it's worth Goldberg also notes that he is "personally a fairly significant in Citigroup's stock(Significant for me, at least. About 10% of my personal assets are in citigroup stock). As such, I have no interest in their screwing up nor in their failure. I want them to succeed."

For the full sake of disclosure, I am also a Citibank account holder - for now. Given what I've written in this post and that at least some Citibank employees fess up to blocking accounts over blog content, I should probably jump in my car and head down to my local branch to make a withdrawal while I still can.

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