Citibank is paying a large amount of money as a result of targeting Armenian American customers with additional scrutiny and discrimination. From 2015 to 2021, the bank made Armenian Americans go through stricter procedures, blocking accounts, denying applications, and demanding more information based solely on their last names. Regulators found that these actions stemmed from a few employees trying to combat a documented Armenian fraud ring in parts of California. However, the actions taken were inappropriate, and the bank ultimately needs to face the consequences, particularly given its past violations of consumer financial protection laws.
As a result of the illegal discrimination, the CFPB has ordered Citi to pay $25.9 million in fines and consumer redress, with the penalties providing a $24.5 million fine to CFPB’s victims relief fund. Citi has responded by issuing an apology to any applicant who faced unfair evaluation from the employees who went against the bank’s fraud detection protocols, and they have taken internal steps to avoid this in the future. However, regulators maintain that Citi supervisors conspired to hide the discrimination and gave consumers false reasons for credit denials. Senators and financial advocates have expressed concerns over Citi’s past management issues and the seemingly insignificant penalties.
The alleged racist practices have brought difficulty to Armenian Americans, who have sought opportunity in the US due to dangerous situations back home. Despite the fact that Citi faced previous fines for overcharging credit card customers and paid $335 million to address violations of the Truth in Lending Act in 2018, the discrimination against Armenian Americans reflects the opaque power dynamics at play in managing financial institutions. The recent findings have brought attention to the need for improved oversight and accountability to prevent future acts of bias and discrimination by major banks such as Citi.
