Citi Fined for Discriminating Against Armenian Americans (1)

Citigroup Inc. was ordered to pay $25.9 million in fines and redress for illegally discriminating against credit-card applicants the bank identified as Armenian American.

The bank, from 2015 to 2021, singled out applicants for certain credit-card products suspected of being of Armenian descent, based on their surnames, then Citigroup supervisors conspired to hide the discrimination by instructing employees not to discuss the practices in writing or on recorded phone lines, the Consumer Financial Protection Bureau said in a statement Wednesday. The bank will pay $1.4 million to harmed consumers along with a $24.5 million penalty.

A Citibank branch in San Francisco

Photographer: David Paul Morris/Bloomberg

“Citi purposefully discriminated against applicants of Armenian descent, primarily based on the spelling of their last name,” CFPB Director Rohit Chopra said in the statement. “Citi stereotyped Armenians as prone to crime and fraud. In reality, Citi illegally fabricated documents to cover up its discrimination.”

The agency’s findings focused on Citigroup’s retail-services division, which houses the bank’s co-brand credit-card partnerships with the likes of Home Depot Inc. and Best Buy Co.

The bank targeted retail-services credit-card applicants with surnames employees associated with Armenian origin as well as applicants in or around Glendale, California, the CFPB said. The bank specifically targeted customers with surnames ending in “ian” and “yan” by applying more stringent criteria or requiring additional information for their applications or placing a block on the accounts, according to the agency. Glendale, a suburb of Los Angeles, is home to about 15% of the Armenian-American population in the US.

New York-based Citigroup didn’t admit to or deny any of the CFPB’s findings, according to a consent order.

“Regrettably, in trying to thwart a well-documented Armenian fraud ring operating in certain parts of California, a few employees took impermissible actions,” Citigroup said in an emailed statement. “While we prioritize protecting our bank and our customers from fraud, it is unacceptable to base credit decisions on national origin,” and Citigroup has “taken appropriate actions with those directly involved in this matter and we promptly put in place measures to prevent any recurrence of such conduct.”

(Updates with Citigroup’s comments in second deck headline, last paragraph.)

To contact the reporters on this story:
Daniel Taub in New York at dtaub@bloomberg.net;
Jenny Surane in New York at jsurane4@bloomberg.net

To contact the editors responsible for this story:
Sally Bakewell at sbakewell1@bloomberg.net

Steve Dickson

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