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Federal Allegations: Citi Accused of Unlawful Discrimination Against Armenian-Americans 2024-04-17 04:39:47

"Federal Regulators Uncover Discrimination Scandal: Citigroup Accused of Illegally Targeting Armenian-Americans in Credit-Card Applications"

In a shocking revelation, U.S. financial regulators have accused Citigroup of engaging in illegal discrimination against credit-card applicants identified as Armenian-American. The Consumer Financial Protection Bureau (CFPB) disclosed that Citi allegedly trained employees to reject applications from individuals with last names ending in "yan" or "ian," common suffixes in Armenian last names. Additionally, applications originating from Glendale, California, home to a significant Armenian-American population, were reportedly targeted.

The investigation, spanning from 2015 to 2021, exposed a deliberate effort by Citi employees to conceal their discriminatory practices. The CFPB charged that bank workers purposefully avoided documenting interactions or recording conversations with Armenian-American consumers. CFPB Director Rohit Chopra condemned Citi's actions, stating, "Citi purposefully discriminated against applicants of Armenian descent, stereotyping Armenians as prone to crime and fraud, and illegally fabricating documents to cover up its discrimination."

As the nation's third-largest bank with $1.7 trillion in assets, Citi faced allegations of credit card denials specifically directed at individuals assumed to be Armenian-Americans applying for co-branded credit cards with partners such as Best Buy and Home Depot. The CFPB claimed that false reasons were provided when questioned about rejected credit card applications.

In response, Citi has agreed to pay a $24.5 million fine and $1.4 million to affected consumers, as stipulated by the consent order. While expressing apologies, the bank neither admitted nor denied the details of the CFPB's investigation. Citi asserted that only a small number of employees were involved in discriminatory practices and justified some actions as efforts to combat potential fraud linked to an alleged "Armenian fraud ring operating in certain parts of California."

The consent order sheds light on disturbing practices within the bank, raising concerns about fair and equitable treatment in financial institutions and prompting a broader conversation about the need for increased oversight and accountability within the banking industry.

"We extend our sincere apologies to any applicant who experienced unfair evaluation due to the actions of a small number of employees who bypassed our fraud detection protocols," stated Citigroup in response to the accusations. The financial giant acknowledged the severity of the situation, conducting an internal investigation and taking appropriate actions against those directly involved. Citi promptly implemented measures to prevent the recurrence of such conduct in the future.

During a call with reporters, CFPB Director Rohit Chopra voiced concerns about Citi's management of its diverse business lines, citing multiple instances where the company had violated consumer financial protection laws in recent years. Notably, in 2018, Citi paid $335 million to 1.75 million credit card holders for breaching the Truth in Lending Act. In 2015, the bank also settled for nearly $750 million in response to deceptive and unfair practices related to credit card add-on products, as reported by the CFPB.

Chopra expressed apprehension about Citi's persistent challenges in managing its extensive business portfolio and raised questions about the fairness of consumers continuing to bear the consequences of past management failures. The remarks underscore broader concerns about corporate accountability and the need for rigorous oversight within the financial industry.

The Associated Press contributed to this report. Khristopher J. Brooks, a reporter for CBS MoneyWatch, covers a spectrum of business, consumer, and financial stories, ranging from economic inequality and housing issues to bankruptcies and the business of sports.

In conclusion, Citigroup's acknowledgment of wrongdoing and issuance of sincere apologies in response to allegations of discriminatory practices highlights a critical issue within the financial giant. The pledge to rectify the situation through internal investigations and preventive measures underscores the gravity of the accusations and the bank's commitment to addressing the problem head-on.

However, concerns voiced by CFPB Director Rohit Chopra regarding Citi's repeated violations of consumer financial protection laws over recent years raise broader questions about the bank's management practices. Instances of substantial fines in 2018 and 2015 indicate a pattern of regulatory breaches, prompting Chopra to express unease about the bank's ability to manage its multifaceted business lines effectively.

Chopra's call for fairness in holding financial institutions accountable resonates in a landscape where consumers bear the consequences of past management failures. As the financial industry faces increased scrutiny, the episode with Citigroup serves as a reminder of the ongoing need for robust oversight and accountability measures to safeguard consumer rights and ensure fair business practices. The situation underscores the challenges that persist within the banking sector and calls for a comprehensive and sustained effort to address systemic issues and restore public trust.

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