Citigroup for years unlawfully discriminated against Armenian-American credit card applications, according to U.S. federal authorities.
The Consumer Financial Protection Bureau (CFPB) released a statement saying that Citi had instructed employees to reject applications from individuals who have last names ending in “ian” or “yan,” the most common Armenian surname suffix, and from the city of Glendale, California, where there is a sizable Armenian-American community.
The CFPB has released the results of an investigation into credit card applications received by Citi from Armenian-American customers between 2015 and 2021, alleging that bank employees covered misconduct by failing to take notes or record discussions with these customers.
Director of the Consumer Financial Protection Bureau Rohit Chopra said in a press release that the bureau had uncovered evidence that Citi was biased against individuals of Armenian heritage based on how they wrote their last name. Armenians were portrayed negatively by Citi as criminals and con artists. To hide its discriminatory practices, Citi intentionally created false records.
According to the CFPB, the rejections occurred when applicants for Citi’s partnered credit cards with Home Depot, Best Buy, and others were incorrectly identified as Armenian-Americans.
The Consumer Financial Protection Bureau said in a consent order that certain employees at Citibank referred to credit applicants with Armenian-sounding names as the “Southern California Armenian Mafia” and “Armenian bad guys.”
Seven members of a fraud ring based in Los Angeles, California, were convicted in 2021 for a COVID-19 Relief scam that cost several million dollars, as the Department of Justice reported. All the accused people’s last names ended in ‘yan’ or ‘ian.’
According to the Equal Credit Opportunity Act of 1974, refusing credit to a group of persons is prohibited solely because of their nationality. According to the CFPB, Citi will pay a $24.5 million penalty and provide $1.4 million to impacted customers.
According to the settlement decree, Citi expressed regret without admitting or contesting the findings of the CFPB’s inquiry. In a statement, the corporation indicated that discriminatory behavior was limited to a few employees.
Citi also claimed that some of its workers were attempting to thwart fraud owing to what it described as an Armenian fraud ring well known to the FBI, operating in certain regions of California.