RSSThe Consumer Financial Protection Bureau fined Citi $25.9 million and ordered the megabank to redress customers for allegedly discriminating against Armenian American credit card applicants over a period of six years.
According to the CFPB, the $1.7 trillion, New York City-based bank violated the Equal Credit Opportunity Act by discriminating against applicants mainly based on whether their surnames indicated potential Armenian descent. Citi allegedly applied more stringent criteria to those applications, including by either denying them outright and requiring additional information or placing a block on the account.
Citi also allegedly discriminated against applicants from the Glendale, Calif., area, which is estimated to be the home of 15 percent of the country’s Armenian American population. The discrimination was alleged to have occurred from 2015-21.
“Citi stereotyped Armenians as prone to crime and fraud,” said CFPB Director Rohit Chopra. “In reality, Citi illegally fabricated documents to cover up its discrimination.”
Citi allegedly hid the discriminatory practices by informing employees not to discuss them in writing or on recorded phone calls. Employees allegedly lied about the reasons for rejecting the credit. In one instance, an employee who was allegedly looking for an idea on how to conceal the discrimination was reportedly told to falsely claim that the credit card application was denied because of suspected credit abuse.
The fine includes $1.4 million that Citi must pay to harmed customers and a $24.5 million penalty.
In a statement to CNN, Citi spokesperson Karen Kearns said the bank took “appropriate actions” against the employees involved. “Regrettably, in trying to thwart a well-documented Armenian fraud ring operating in certain parts of California, a few employes took impermissible options,” she said. “While we prioritize protecting our bank and our customers from fraud, it is unacceptable to base credit decisions based on national origin.”
