Citigroup employees described a group of about 80,000 Armenian Americans living near Los Angeles — the largest Armenian community outside Yerevan, the Armenian capital — as “evil” and secretly denied them fair access to the bank’s credit card products, the Consumer Financial Protection Bureau said. In a statement on Wednesday.
The bank agreed to pay $25.9 million to settle a case brought by the Consumer Bureau under the Equal Credit Opportunity Act, the federal law that prohibits banks from discriminating against people based on a range of characteristics, including race, national origin and religion. Of the total amount, $1.4 million will be allocated to victims of Citigroup’s discriminatory practices, the regulator said. The other amount, amounting to $24.5 million, is a penalty for the bank’s misconduct.
“Citi portrays Armenians as vulnerable to crime and fraud,” Rohit Chopra, director of the Consumer Bureau, said at a news conference on Wednesday. “In fact, Citi illegally falsified documents to cover up its discrimination.”
Mr. Citigroup has been caught violating banking regulations on several occasions, Chopra said. The consumer regulator said that Citigroup’s discriminatory practices regarding Armenians were in place from at least 2015 to 2021.
“I am concerned about the long-term problems City faces when it comes to managing many parts of its sprawling business,” he said. Chopra said.
According to the regulator, City employees connect the community, In Glendale, California, As a group its members are likely to run up huge debts and then flee the country. They warned new employees not to give credit card applicants with Armenian-sounding last names ending in “yan” or “yan” the same rates as other customers, and in some cases urged them to reject such applicants outright.
People affected by the bank’s practices were not applying for Citigroup-branded cards; They were looking for cards offered by retailers, such as Home Depot and Best Buy, that were guaranteed by the bank. Eric Halperin, director of enforcement at the Consumer Bureau, said during the news conference that Citigroup was still trying to determine how many people were affected by the discrimination, but regulators had so far identified “hundreds.”
Karen Kearns, a Citigroup spokeswoman, said in a statement that the bank was “trying to thwart a well-documented Armenian fraud ring operating in certain parts of California,” and that “a small number of employees took impermissible actions.”
According to organizers, City managers were aware that excluding Armenians was illegal and warned employees “not to discuss the matter in writing or over recorded telephone lines.” However, regulators found evidence of Citi employees discussing via email how to cover up their rejection of applicants from Glendale.
“It’s been a long time since I’ve been denied due to possible credit abuse/YAN – give me some reasons I can use,” one employee wrote to another in 2016, asking for advice on how to tell a potential client that a credit card application has been declined without revealing that. The real reason, according to the Consumer Bureau.
“We sincerely apologize to any applicants who were evaluated unfairly,” the woman said. Kearns said. He added: “After an internal investigation, we took appropriate action with the people directly involved in this matter, and we immediately took the necessary measures to prevent the recurrence of such behavior.”
