U.S. banking giant, Citi, discriminated against customers of suspected Armenian descent, financial regulators alleged.
The U.S. Consumer Financial Protection Bureau (CFPB) ordered Citibank N.A. to pay a US$24.5 million penalty and US$1.4 million in consumer redress, for illegally discriminating against credit card applicants.
“From 2015 through 2021, Citi singled out for discrimination applicants for certain credit card products, based on their surnames,” the CFPB said.
Specifically, it found that the bank targeted surnames ending in “-ian” and “-yan”, and it discriminated against applicants from the Glendale, California area, which has a large Armenian population.
“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, in a release.
“Citi stereotyped Armenians as prone to crime and fraud. In reality, Citi illegally fabricated documents to cover up its discrimination,” he added.
The CFPB said that intentionally denying credit to groups of people based on national origin is unlawful, and violated the Equal Credit Opportunity Act.
It also said that the bank’s employees were instructed to avoid giving customers the real reason for denying them credit.
In addition to the financial sanctions, the CFPB’s order also requires Citi to stop its illegal discrimination and take measures to ensure compliance, “including increasing oversight of communications and training materials concerning the manual underwriting of consumer credit card applications.”
The bank consented to the order without admitting or denying its findings.