Citigroup Fined $25.9 Million for Discrimination Against Armenian Americans
Citigroup has been fined $25.9 million by the Consumer Financial Protection Bureau (CFPB) for intentionally discriminating against Armenian Americans in credit card applications. The CFPB found that Citigroup employees were trained to avoid approving applications with last names ending in "yan" or "ian," common suffixes in Armenian last names. Additionally, applications originating from Glendale, California, where a significant population of Armenian Americans resides, were also targeted for avoidance. Internally, some Citigroup employees referred to applicants as "bad guys" or associated them with organized crime.
The discriminatory practices were in violation of bank laws that prohibit discrimination based on national origin. Citigroup will pay $24.5 million in fines and $1.4 million in remedies to impacted customers as part of the order. The case originated from the presence of organized crime syndicates involving Armenian Americans in Southern California, which led some employees to attempt to prevent potential fraud. However, the CFPB's investigation revealed that the employees engaged in broad discrimination against Armenian Americans, using identifiable information to deny applications.
Citigroup has issued a statement apologizing to any applicants who were unfairly evaluated and acknowledging the actions of a small number of employees who circumvented fraud detection protocols. The bank has taken appropriate measures to address the issue and prevent its recurrence. The CFPB's investigation found that Citigroup employees concealed the real reasons for denying applications and engaged in discriminatory practices.
While the number of individuals impacted by Citigroup's discrimination is relatively small compared to its customer base, the severity of the behavior led to a significant fine from the CFPB. The case highlights the importance of upholding non-discriminatory practices in the financial industry and the consequences for institutions that engage in such behavior.
Implications of Citigroup's Discrimination Fine for New Businesses
The recent $25.9 million fine imposed on Citigroup by the Consumer Financial Protection Bureau (CFPB) for discriminatory practices against Armenian Americans serves as a stark reminder for new businesses about the importance of upholding non-discriminatory practices. The bank's employees were found to have intentionally avoided approving credit card applications from Armenian Americans, a clear violation of bank laws prohibiting discrimination based on national origin. This case underscores the severe consequences that businesses can face if they engage in discriminatory behavior.
For new businesses, particularly those in the financial sector, this incident highlights the need for rigorous training and robust protocols to ensure fair and unbiased evaluation of all applications, regardless of the applicant's national origin or other identifiable information. It also emphasizes the importance of maintaining a transparent process, as Citigroup employees were found to have concealed the real reasons for denying applications.
While the number of individuals impacted by Citigroup's discriminatory practices may be relatively small compared to its overall customer base, the severity of the behavior and the substantial fine imposed by the CFPB underscore the significant reputational and financial risks associated with such behavior. As such, new businesses must prioritize the establishment of non-discriminatory practices from the outset to avoid similar pitfalls.