Citigroup Inc. has been instructed to pay a sum of $25.9 million to settle charges set by the U.S. Consumer Financial Protection Bureau (CFPB) on grounds of discrimination against credit card applicants of Armenian-American origin.
Key Takeaways:
- Discriminatory Practices Uncovered: Citigroup Inc. was found to have discriminated against Armenian-American credit card applicants, using last names as a basis for unfair treatment.
- Impact on Armenian-American Community: Applicants from “Little Armenia” in Glendale, California, faced additional scrutiny and were often denied credit without valid reasons.
- Financial Repercussions for Citigroup: The bank is required to pay $24.5 million in civil fines and $1.4 million in restitution for violating the Equal Credit Opportunity Act.
- Citigroup’s Response: The bank apologized, attributing the actions to employees circumventing fraud protocols, and has taken corrective actions against those involved.
- CFPB’s Stance: The CFPB has raised concerns over Citigroup’s repeated violations of consumer protection laws and is pushing for stricter regulatory measures.
- Industry-Wide Call for Equality: The incident underscores the need for a collaborative approach to eradicate discrimination in the banking industry and ensure equal access to financial services.
- Advice for Affected Consumers: Those impacted by discriminatory credit decisions are advised to seek assistance from credit repair services and report incidents to regulatory bodies.
Unfair Treatment and Targeted Discrimination against Armenian Americans
The bank was found to have intentionally discriminated based on the applicants’ last names, targeting those with Armenian suffixes such as “ian” and “yan”. This misconduct, which took place between 2015 and 2021, was essentially based on the unproven assumption that these groups were more likely to commit fraud.
Impact on Victims
Most of the victims resided in Glendale, California, also known as “Little Armenia,” which hosts about 15% of the Armenian-American population in the United States. The bank was found guilty of applying stricter criteria when processing these individuals’ applications, which included demanding additional information or outright denial of the applications. Furthermore, the bank employees are said to have lied to applicants by providing false reasons for denials, and were instructed to avoid discussing the discriminatory practices in writing or over a recorded phone conversation.
Citigroup’s Resolution and Apology
As a part of the resolution, Citigroup would pay a civil fine of $24.5 million and a further $1.4 million as restitution to card applicants. The punishment is for violating the federal Equal Credit Opportunity Act. The bank has since apologized for these actions, stating a small number of employees had bypassed its fraud detection protocols in an attempt to counter an Armenian fraud ring in California. It assures that appropriate actions have been taken against the individuals directly involved in the incident. “While we prioritize protecting our bank and our customers from fraud, it is unacceptable to base credit decisions on national origin,” Citigroup stated.
CFPB’s Concerns and Stricter Measures
However, Rohit Chopra, Director of the CFPB, highlighted that Citigroup has consistently breached consumer protection laws, resulting in fines and consumer redress payments exceeding $1 billion since 2015. He expressed apprehension regarding Citi’s ability to effectively manage its extensive range of business operations.
Addressing Discrimination in the Banking Industry
In response to the ongoing issues with discrimination in the banking sector, regulatory bodies like the Consumer Financial Protection Bureau (CFPB) have been working towards implementing stricter measures to ensure equal treatment for all individuals seeking financial services. This includes conducting regular audits and imposing hefty fines on institutions found guilty of discriminatory practices.
Actionable Advice If You’ve Been Impacted
If you’ve been impacted by a hard inquiry or have been denied an application resulting in a hard inquiry on your credit, reach out to Pyramid Credit Repair today for assistance and resolution.
Collaborative Effort for Equality
In conclusion, eliminating discrimination in the banking industry requires a collective effort from all stakeholders – financial institutions, regulatory bodies, advocacy groups, and consumers. By working together towards creating a more equitable and inclusive environment, we can ensure that everyone has equal access to financial services without fear of discrimination. Let’s continue to push for progress and hold those accountable who perpetuate discriminatory practices in the banking industry. Together, we can create a more just and fair financial system for all. So let’s stay informed, stay vigilant, and work towards a future where discrimination in the banking industry is no longer tolerated. The fight for equality in banking continues, and it is up to all of us to ensure that fairness and inclusion prevail.
Seek Assistance and Report Incidents
If you’ve experienced discrimination in the banking industry, it is crucial to be aware of your rights and the resources available to you. This includes reporting incidents to regulatory bodies like the CFPB and seeking assistance from organizations dedicated to fighting against discriminatory practices in the banking sector.
