Citi denied credit card applicants based on last names, feds say. Now it owes $25M

Citibank will pay millions to rectify accusations that it “purposefully discriminated” against Armenian Americans applying for its credit cards.

The New York-based bank was hit with a $25.9 million fine after federal officials said it singled out applicants “based on the spelling of their last name,” according to the U.S. Consumer Financial Protection Bureau.

Employees refused credit to those they believed to have Armenian ancestry, officials said, then gave borrowers bogus reasons for the denial. Officials said the bank warned workers against discussing its practices in writing or on the phone.

McClatchy News reached out to Citibank for comment Nov. 8 and didn’t immediately hear back.

Karen Kearns, a spokesperson for Citibank, told CNN that the company took “appropriate actions” against the employees involved and took steps to prevent similar conduct in the future.

“Regrettably, in trying to thwart a well-documented Armenian fraud ring operating in certain parts of California, a few employees took impermissible actions,” Kearns said, according to CNN. “While we prioritize protecting our bank and our customers from fraud, it is unacceptable to base credit decisions on national origin.”

The order, filed Wednesday, Nov. 8, requires Citibank to pay $1.4 million to affected applicants on top of a $24.5 million civil penalty, according to a CFPB news release.

“Citi stereotyped Armenians as prone to crime and fraud,” CFPB Director Rohit Chopra said in a statement. “In reality, Citi illegally fabricated documents to cover up its discrimination.”

Officials said Citibank’s alleged discrimination occurred between 2015 and 2021. During that time, workers targeted applicants with last names ending in “-ian,” “-yan” and others they associated with Armenian ancestry, according to the CFPB.

The bureau said employees also targeted applicants who lived in or around Glendale, California, which is home to a large Armenian American community.

In 2016, the BBC reported more than 200,000 Armenians resided in the metro Los Angeles area. Nearby Glendale had a population that was roughly 30% Armenian at the time.

“Citi treated Armenian Americans as criminals who were likely to commit fraud,” officials said in the release. “Intentionally denying credit to entire groups of people based on national origin is unlawful.”

Borrowers who applied for a Citi Retail Services credit card between Jan. 1, 2015, and Dec. 31, 2021, and were denied due to their ancestry qualify for compensation, according to the CFPB.

Officials didn’t provide details on the claims process, however.

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