The Consumer Financial Protection Bureau (CFPB) says it is ordering financial giant Citibank to pay out more than $1 million to potential customers who were treated like criminals.
In a news release, the CFPB said Citi violated the Equal Credit Opportunity Act by denying services to people based on their heritage.
The agency says Citi discriminated against Armenian Americans between 2015 and 2021 by rejecting their applications for retail credit cards, treating them as if they were likely to commit fraud because of their roots.
“Citi treated Armenian Americans as criminals likely to commit fraud. From at least 2015 through 2021, Citi targeted retail credit card applicants with last names that associated Citi employees 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 about 15% of the Armenian-American population in the US.
The CFBP says Citi employees have been instructed by mid-level managers to identify applicants of Armenian descent and use various means to deny the application.
“When Citi identified credit card applicants as possibly of Armenian descent, the bank applied stricter criteria to their applications, including rejecting them outright and requiring additional information or placing a hold on the account.
Employees were instructed not to discuss the illegal discriminatory practice in writing or over recorded telephone lines.”
Citi employees gave “false reasons” for denying Armenian Americans’ applications, including blaming an applicant for the denial.
“At one point, a Citi employee explained that it had been a while since they had denied an application because of a consumer’s Armenian last name, and he wanted a suggestion on how they could cover up the discrimination. The response was to deny the credit card application due to suspected credit abuse, essentially blaming the applicant for the denial.”
Due to the bank’s discriminatory practice, the CFPB ordered Citi to pay $1.4 million to credit card applicants rejected due to national origin between January 1, 2015 and December 31, 2021, as well as a $24.5 million fine.
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