Due to series of reports of customers and investigations conducted by the U.S. Office of the Comptroller of the Currency (OCC), Citigroup was fined $25M for denying mortgages borrowers in the basis of race, color and other factors.
In 2012, the bank launched what is called ‘relationship pricing’ offering reduced pricing for mortgage borrowers that have significant assets in the bank. Over the years, the bank discovered errors with the program which led to a failure to provide the benefits of customers under the program.
OCC has been conducting investigations to confirm the violations and end up issuing a written reprimand to the bank.
Meanwhile, Citigroup said in a statement, “Citi has no tolerance for discrimination in any form. Citi self-reported the issue to the appropriate regulators, conducted a comprehensive review, strengthened processes and controls to help ensure correct implementation going forward and has largely completed reimbursements to the identified customers.”
Series of violations observed
The issue of violating lending rules isn’t the first one that hit Citigroup. In fact, for the last five years, there has been a series of controversies related to the bank.
In 2017, Citigroup agreed to pay the fine amounting to $97.4M in relation to money laundering safeguards. The Mexico unit which transferred a significant amount of $8.8B in US-Mexico money has been reported to the federal government for suspicious transactions. The bank settled the criminal violation with the Justice Department admitting they have ‘failed to maintain an effective antimony laundering program.’
Just last year, another issue boomed relating Citibank’s affiliates with Dark Pool-related violations, leading to $12M penalties. The bank did not disclose the large blocks of shares under anonymous investors until the government snooped in.
The issue has been resolved after the bank paid the penalty in September 2018.
