CFPB Closes Case Against Citi Over Allegations of Discrimination

President Donald Trump’s Consumer Financial Protection Bureau (CFPB) has concluded the Biden administration’s case against Citigroup, related to allegations of forced payments to consumers who did not experience the supposed harm.

On July 8, Brent McIntosh, Citigroup’s chief legal officer, shared insights in a letter to the CFPB, concerning lawsuits from the Biden administration era. The allegations claimed that the bank had discriminated against credit card applicants with Armenian backgrounds. This lawsuit, led by progressive CFPB board member Rohit Chopra, demanded Citi pay $25.9 million, including $1.4 million for affected individuals and an additional $24.5 million to the CFPB’s Victim Relief Fund.

Citi has expressed its intention to target what it describes as a “large-scale fraud” involving certain individuals of Armenian descent, particularly those linked to crime syndicates in Southern California.

While addressing these concerns, Citi admitted to considering Armenian nationality when reviewing credit card applications, specifically noting names like “Ian” and “Yan” from the Glendale, California area, known for its significant Armenian population.

Back in July 2020, the bank announced that it had quickly moved to investigate the matter, resulting in the dismissal of several employees involved with the credit card applications, alongside retraining for underwriting staff to prevent reoccurrences. Interestingly, Citi noted that the applicant pool was so small that their statistical analysis couldn’t even detect a meaningful impact.

Despite the limited number of claimants, Citi stated the CFPB under Biden had acted excessively, going well beyond addressing isolated issues. This included:

• Forcing Citi to compensate a larger number of consumers—specifically, over 100 individuals with surnames ending in “ian” or “yan,” many of whom were not of Armenian descent. Names like “Christian” and “Brian” received payments, despite not being connected to any alleged discrimination.
• Chopra’s order mandated Citi to monitor the use of Armenian surnames both locally and nationally. However, the only relevant area for such oversight would likely be Glendale, California.
• The CFPB’s directive required Citi to conduct a broad analysis of its credit decisions, but notably, much of this did not focus on applicants of Armenian descent.

An unnamed senior CFPB official commented that the agency seemed unaware of the complexities surrounding various ethnic groups, including the Irish and Armenians.

Citi further asserted that the CFPB’s statistical approach exaggerated the number of supposedly affected individuals to around 579, revealing that many did not have Armenian last names. Additionally, after their own assessment, Citi claimed the number of impacted consumers was even lower—at 80 out of approximately 137 million credit applications from 2015 to 2021.

Citi has requested the CFPB to end the remaining five-year monitoring period, arguing that the bank has taken steps to rectify past mistakes and has already paid a civil penalty following the consent order.

The CFPB, under acting Director Russ Vaught, has closed the case against Citi.