The Consumer Financial Protection Bureau Ends Citi Consent Order Early
Recently, the Consumer Financial Protection Bureau (CFPB) made headlines by terminating a consent order against Citi related to alleged discrimination of Armenian-Americans. This decision, as reported in a Thursday filing, marks a significant development in the ongoing efforts to address unfair practices in the financial industry.
The watchdog initially imposed the consent order on Citi in 2023 over allegations that the bank had discriminated against credit card applicants in California with Armenian surnames. Despite neither admitting to nor denying the allegations, Citi agreed to pay $25.9 million in fines and redress as part of the settlement. Over the years, Citi has fulfilled several obligations under the consent order, including paying a substantial civil money penalty and implementing measures to prevent future violations.
When the consent order was first issued, Citi attributed the alleged discrimination to a few employees who had taken improper actions to combat a fraud ring operating in California. While emphasizing the importance of fraud prevention, a spokesperson for Citi acknowledged the inappropriateness of basing credit decisions on national origin and extended apologies to affected applicants.
Impact and Response
According to Eric Halperin, the former assistant director for enforcement at the CFPB, hundreds of individuals were affected by the discriminatory practices. The consent order was initially set to remain in effect until 2028, highlighting the severity of the situation. However, Citi declined to comment on the matter following the recent termination of the order, and the CFPB has yet to provide a detailed response.
Recent Developments
Under the leadership of Acting Director Russ Vought, the CFPB has taken steps to terminate several consent orders ahead of schedule. Institutions like WaFd, U.S. Bank, Apple, and Bank of America have all seen their orders concluded early, signaling a shift in regulatory enforcement practices within the financial sector.
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