The Consumer Financial Protection Bureau ordered Citibank to pay $25.9 million in fines and consumer redress for intentional and illegal discrimination against credit-card applicants based on their Armenian heritage, the regulator said Wednesday.
“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 fabricated documents to cover up its discrimination.”
“Regrettably, in trying to thwart a well-documented Armenian fraud ring operating in certain parts of California, a few employees took impermissible actions,” Citigroup
spokesperson Laura Barganier said in an email to MarketWatch.
“We sincerely apologize to any applicant who was evaluated unfairly by the small number of employees who circumvented our fraud detection protocols,” she added. “Following an internal investigation, we have taken appropriate actions with those directly involved in this matter, and we promptly put in place measures to prevent any recurrence of such conduct.”
The CFPB said that from 2015 through 2021, Citi “treated Armenian Americans as criminals who were likely to commit fraud” by denying them credit cards based on their names and where they lived, discriminating against those who lived in or around Glendale, Calif., an area with a high concentration of Armenian Americans.
In a press conference following the announcement, Chopra chastised Citi for what he called the company’s “long-standing problems when it comes to managing sprawling lines of business,” pointing to other recent enforcement actions, including a fines paid in 2018, 2017 and 2015 for violating consumer protection laws.
Eric Halpren, the CFPB’s assistant director for enforcement told reporters that the agency is focused on stopping banks from using illegal means to address fraud.
“We are concerned that entities efforts to address fraud has resulted in unlawful conduct,” he said, noting that the agency fined Bank of America
and Wells Fargo
last year in part for actions taken as a result of faulty fraud filters.