CFPB Slaps Citi with $25.9 Million Penalty for Discriminating Against Armenian American Credit Card Applicants

The Consumer Financial Protection Bureau (CFPB) has ordered Citibank, N.A. (Citi) to pay $25.9 million in fines and consumer redress for engaging in intentional and illegal discrimination against credit card applicants identified as Armenian American. The discriminatory practices took place between 2015 and 2021.

Citi was found to have unlawfully singled out applicants with Armenian surnames for certain credit card products, perpetuating stereotypes and projecting them as prone to crime and fraud. The discriminatory actions were concealed through a conspiracy among Citi supervisors, who instructed employees not to document these practices in writing or on recorded phone lines. Employees also provided false reasons for denial to the affected applicants.

CFPB Director Rohit Chopra expressed strong condemnation, stating, "Citi stereotyped Armenians as prone to crime and fraud. In reality, Citi illegally fabricated documents to cover up its discrimination."

The discriminatory focus extended to applicants in or around Glendale, California, a city known as "Little Armenia" and home to approximately 15% of the Armenian American population in the U.S. Citi specifically targeted surnames ending in “-ian” and “-yan.”

Citi's discriminatory practices violated the Equal Credit Opportunity Act, which prohibits intentional denial of credit to entire groups based on national origin. The bank's managers trained and directed employees to participate in this discriminatory plan, causing harm to consumers through:

1. Denying credit applications based on ancestry:
2. Employees were taught to discriminate against those perceived to be of Armenian descent.
3. Citi applied more stringent criteria, including outright denials, additional information requirements, or placing blocks on accounts.
4. Instructions were given to avoid discussing the discriminatory practice in writing or on recorded phone lines.
5. Providing fake reasons for credit denials:
6. Citi employees provided false reasons for adverse actions, blaming the denials on suspected credit abuse.
7. Instances were recorded where employees sought suggestions on covering up the discrimination.

Under the enforcement action, Citi is required to take the following measures:

• 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 were denied based on national origin discrimination are eligible for redress.
• Pay a $24.5 million fine:
• Citi will contribute $24.5 million to the CFPB’s victims relief fund.

The enforcement action highlights the CFPB's commitment to addressing discriminatory practices in the financial sector and underscores the severe consequences for institutions found guilty of such violations.

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