On November 8, 2023, the CFPB 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. According to CFPB Director Rohit Chopra, Citi purposefully discriminated against applicants of Armenian descent, primarily based on the spelling of their last name, and stereotyped Armenians as prone to crime and fraud. Chopra also said that Citi illegally fabricated documents to cover up its discrimination.
Citibank, N.A. is a national bank with headquarters in New York City that issues consumer credit cards and is the third-largest bank by asset size in the United States. According to the CFPB’s press release, 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. In addition, 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.
Citi’s alleged actions violated the Equal Credit Opportunity Act. Specifically, 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, specifically targeting surnames ending in “-ian” and “-yan.” 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.
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. In one instance, a Citi employee explained it had been a while since they had denied an application because of a consumer’s Armenian surname, 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.
The CFPB’s consent order against City requires the bank to:
Pay $1.4 million to affected consumers. Consumers who applied for a Citi Retail Services Credit Card between January 1, 2015, and December 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.
The CFPB’s press release can be found here.
The consent order can be found here.