WASHINGTON— The Consumer Financial Protection Bureau (CFPB) has ordered Citi to pay $25.9 million in fines and consumer redress for intentionally and illegally discriminating against credit card applicants the bank identified as Armenian American.
“From 2015 through 2021, Citi singled out for discrimination applicants for certain credit card products, based on their surnames, whom it suspected of being of Armenian descent,” the CFPB said. “Citi supervisors conspired to hide the discrimination by instructing employees not to discuss the discriminatory practices in writing or on recorded phone lines. Citi employees also lied about the basis of denial, providing false reasons to denied applicants.”
Under the order, Citi will pay $1.4 million to harmed consumers along with a $24.5 million penalty.
Specific Names Targeted
According to the CFPB, Citi treated Armenian Americans as “criminals who were likely to commit fraud. From at least 2015 through 2021, Citi targeted retail services credit card applicants with surnames that Citi employees associated with Armenian national origin as well as applicants in or around Glendale, California. The bank specifically targeted surnames ending in ‘-ian’ and ‘-yan’,” the CFPB said.
Nicknamed “Little Armenia,” Glendale is home to approximately 15% of the Armenian American population in the U.S., the CFPB stated.
Specific Allegations
According to the CFPB, Citi harmed consumers by:
- Denying credit applications because of borrowers’ ancestry. “Citi’s supervisors taught employees how to discriminate against people of perceived Armenian descent. A primary tool for identifying who to discriminate against was surname suffixes. When Citi identified credit card applicants as potentially being of Armenian national origin, the bank applied more stringent criteria to their applications, including denying them outright and requiring additional information or placing a block on the account. Employees were instructed to avoid discussing the illegal discriminatory practice in writing or on recorded phone lines.”
- Giving borrowers fake reasons for credit denials. “When Citi denied credit applications because of applicants’ perceived Armenian national origin, Citi employees lied about the specific reasons for the adverse actions. At one point, a Citi employee explained it had been a while since they had discriminated against someone who they thought was Armenian, and wanted a suggestion on how to cover up the discrimination. The response was to decline the credit card application due to suspected credit abuse, which essentially blamed the applicant for the denial.”
Enforcement Action
The CFPB’s order requires Citi to:
- Pay $1.4 million to affected consumers. Consumers who applied for a Citi Retail Services Credit Card between Jan. 1, 2015, and Dec. 31, 2021, and are identified as having been denied the credit card based on national origin discrimination are eligible for redress.
- Pay a $24.5 million fine: Citi will pay $24.5 million to the CFPB’s victims relief fund.
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