WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (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. 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. 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 today’s order, Citi will pay $1.4 million to harmed consumers along with a $24.5 million penalty.
"The CFPB found that Citi purposefully discriminated against applicants of Armenian descent, primarily based on the spelling of their last name,” said CFPB Director Rohit Chopra. "Citi stereotyped Armenians as prone to crime and fraud. In reality, 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, including retail services credit cards for companies like Home Depot and Best Buy. Citi’s parent company is Citigroup (NYSE: C), a global financial services holding company. As of June 30, 2023, Citi had $1.7 trillion in total assets – making it the third-largest bank by asset size in the United States.
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.” Nicknamed “Little Armenia,” Glendale is home to approximately 15% of the Armenian American population in the U.S.
Intentionally denying credit to entire groups of people based on national origin is unlawful. Citi’s actions violated the Equal Credit Opportunity Act. Citi managers trained and directed employees to take part in the bank’s plan to single out Armenian Americans applying for retail services credit cards because of stereotypes Citi projected onto an entire nationality. 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. 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 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.
Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including the Equal Credit Opportunity Act and its implementing Regulation B. 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 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.
Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees who believe their companies have violated federal consumer financial protection laws are encouraged to send information about what they know to email@example.com. To learn more about reporting potential industry misconduct, visit the CFPB’s website.
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.