Citi illegally discriminated against Armenian-Americans, FBI says

Citigroup illegally discriminated for years against credit card applicants the bank identified as Armenian-American, according to U.S. financial regulators.

Consumer Financial Protection Bureau (CFPB) officials said Wednesday that Citi trained employees to reject applications from people with surnames ending in “yan” or “ian” — the most common suffix in Armenian surnames — as well as applications that originate from Glendale, California, which is home to a large Armenian-American population.

Bank workers also concealed their wrongdoing by intentionally not taking notes or recording the conversations they had with Armenian-American consumers, the CFPB charged in revealing the results of an investigation that focused on credit card applications Citi received between 2015 and 2021.

“The CFPB found that Citi purposefully discriminated against applicants of Armenian descent, primarily based on the spelling of their last name,” CFPB Director Rohit Chopra said in a statement. “Citi stereotyped Armenians as prone to crime and fraud. In reality, Citi illegally produced documents to cover up its discrimination.”

Citi is the nation’s third largest bank with assets of $1.7 trillion.

The credit card rejections occurred when people Citi employees assumed were Armenian-Americans applied for the Wall Street giant’s co-branded credit cards with Best Buy, Home Depot and others, not Citi’s own credit card, the CFPB said. Citi employees also gave false reasons when some Armenian-Americans asked why their credit card applications were declined, the agency alleged.

In a consent orderThe CFPB said some Citi workers referred credit applicants with ethnic Armenian names such as “Armenian crooks” or “Southern California Armenian Mafia.”

Denying credit to a group of people because of their nationality is illegal under the Equal Credit Opportunity Act of 1974. Citi will pay a $24.5 million fine and $1.4 million to affected consumers, the CFPB said.

Citi’s explanation

Citi apologized while neither admitting nor denying the details of the CFPB’s investigation, according to the consent order. The company said in a statement that only a small number of its employees engaged in discriminatory practices.

Citi also said some employees tried to stop potential fraud due to what it called a “well-documented Armenian fraud ring operating in certain parts of California,” which often involved people who ran up credit card debt and then left the country.

“We sincerely apologize to any applicant who was assessed unfairly by the small number of employees who circumvented our fraud detection protocols,” Citi said. “Following an internal investigation, we have taken appropriate action with those directly involved in this matter and we have taken immediate action to prevent a recurrence of such conduct.”

In a call with reporters, Chopra also expressed concern about how Citi manages its many businesses, noting that the company has violated consumer financial protection laws several times in recent years. In 2018, for example, Citi paid $335 million to 1.75 million credit card holders for violating the Truth in Lending Act. And in 2015, the bank paid nearly $750 million for deceptive and unfair practices related to credit card add-on products, according to the CFPB.

“I am concerned about Citi’s long-standing problems in managing its sprawling businesses,” Chopra said. “The public has given Citi very large bailouts because of its past management failures. It is unfair for consumers to continue to pay the price.”

— The Associated Press contributed to this report.

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