Citi CEO Apologizes For Bank's Discrimination Against Armenian Americans
Citi is 'deeply sorry' for its unfair lending practices concerning Armenian Americans, CEO tells Senate panel.
Citi is "deeply sorry" for its discrimination against Armenian Americans, CEO Jane Fraser said today, December 6, during testimony before a Senate Banking Committee hearing.
On November 8, the Consumer Financial Protection Bureau (CFPB) fined Citi $25.9 million for targeting Armenian Americans who applied for certain credit cards from 2015 through 2021. The bank agreed to pay $1.4 million of the fine to the victims of the discrimination to settle the case and the remaining $24.5 million to CFPB’s victims relief fund and to stop the discrimination, taking measures to ensure compliance going forward.
"We are deeply sorry and apologize to the Armenian American community that we recently fell short of our fair lending expectations with respect to certain credit card applications," Fraser said in her opening remarks to the committee. "We found a small number of employees were not following Citi policy and have taken action to make things right and prevent any recurrence."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The Banking Committee called Fraser, along with seven other banking and financial services executives, to testify during its annual oversight of Wall Street firms hearing.
According to CFPB's charges, Citi specifically singled out applicants whom it suspected were of Armenian descent based on their surnames. The bank targeted applicants with names ending in “-ian” and “-yan,” including those living in or around Glendale, California, which is home to about 15% of the Armenian-American population, the CFPB said.
Workers told to keep quiet about the practices
Citi also lied about why it denied the applicants and told employees not to discuss the discriminatory practices in writing or on recorded phone lines, CFPB said.
“Citi believed that Armenian Americans were prone to engage in criminal fraud,” CFPB Director Rohit Chopra said in a November 8 statement. “Citi often rejected these applicants outright. When Citi did not, the bank subjected those who may be of Armenian descent to additional scrutiny.”
Groups including the Consumer Federation of America (CFA) praised the action against Citi.
“It’s an open-and-shut example of intentional discrimination,” Adam Rust, CFA Financial Services director said in a November 13 statement. “Through a coordinated plan, Citi singled out a group of applicants for additional scrutiny based solely on their national origin and without any business justification. Financial institutions that exclude groups from getting credit solely because of their national origin by applying blunt-fisted, de-risking approaches should take note of this order."
Federal agencies are continuing a crackdown on banking operations. In recent months, for example, the CFPB has fined consumer finance company Tempoe, sued installment lending conglomerate Heights Finance Holding, reached settlements with credit repair firms Lexington Law and CreditRepair.com, and brought charges against Freedom Mortgage for illegal kickbacks.
If you have a problem with a financial product or service, the CFPB encourages you to visit its website to file a complaint. The consumer watchdog group said it sends more than 20,000 complaints about financial products and services each week to companies for responses and that most companies respond within 15 days.
Related Content
- Loan Lender Sued for 'Trapping' Borrowers
- CFPB Slams Credit Repair Companies
- CFPB Sues Snap Finance, Prehired for Allegedly Deceiving Consumers
- $725M Facebook Settlement Receives 'Largest Number of Claims Ever Filed'
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
- Esther D’AmicoSenior News Editor
-
How to Help Your Kids Without Ruining Your Retirement
Here are some general considerations to ensure the gift of assets to your kids will not negatively affect your financial future.
By Mario Hernandez Published
-
AI to Power the Next Generation of Robots
The Kiplinger Letter There's increasing buzz that the tech behind ChatGPT will make future industrial and humanoid robots far more capable.
By John Miley Published
-
Best Banks for High-Net-Worth Clients
wealth management Kiplinger's 2023 list of the best banks for higher-net-worth clients.
By Lisa Gerstner Published
-
Best Cash Back Credit Cards April 2024
Smart Buying Trying to compare the best cash back credit cards? Unlike most reviewers, we include cards from small banks and credit unions, as well as from large issuers.
By Ellen Kennedy Last updated
-
The Best Balance Transfer Credit Cards
Balance transfer credit cards have the power to drastically cut your payments with 0% APR. But there’s a cost, and rules to follow.
By Lisa Gerstner Last updated
-
Should You Get a Loan From Your Credit Card?
credit & debt The convenience can come at a steep cost. But there are options.
By Lisa Gerstner Published
-
14 Little-Known Credit Card Perks
credit cards Rewards points and cash back aren’t the only benefits of paying with plastic.
By Lisa Gerstner Published
-
The Best Bank for You, 2018
savings We've identified the banks and credit unions that offer the best combination of high rates, low fees and a customer-friendly focus.
By Miriam Cross Published
-
6 Most Rewarding New Rewards Credit Cards
credit & debt These cards are great for consumers who want cash back on purchases or points that can be redeemed for travel.
By Cameron Huddleston Published