Citibank has been fined a total of $25.9 million by the Consumer Financial Protection Bureau (CFPB) for its discriminatory practices against Armenian American credit card applicants between 2015 and 2021. The fine includes $1.4 million for consumer redress and a $24.5 million contribution to the CFPB’s victims relief fund.
The CFPB, led by Director Rohit Chopra, revealed that Citibank employees were trained to reject applications from individuals with Armenian surnames, particularly those ending in “yan” or “ian”, or originating from Glendale, California, a city known for its significant Armenian American population. The employees were also coerced to hide the true reasons behind these unfair evaluations under threat of penalties for non-compliance.
In an attempt to cover up this unlawful act, Citibank provided false reasons for credit denials. The bank was accused of wrongful profiling of Armenians as criminals, leading to this blatant violation of the law. To further conceal its prejudice, Citibank even created fabricated documents.
In defense, Citibank claimed that a small group of employees had bypassed their fraud detection protocols in an attempt to combat an Armenian fraud ring in certain Californian regions. The bank has since apologized and implemented preventative measures to avoid such misconduct in the future.
CFPB Director Rohit Chopra emphasized that Citibank’s stereotyping of Armenians as prone to crime and fraud led to this significant penalty.
In light of the recent fine, it’s crucial to consider various financial indicators for Citibank. According to InvestingPro data, Citibank has a market cap of $80 billion and a low P/E ratio of 6.6 as of Q3 2023, suggesting that the stock may be undervalued. The bank has also seen a revenue growth of 2.33% over the last twelve months, indicating a positive financial trajectory despite the controversy.
InvestingPro Tips suggest that while Citibank has been facing challenges, including a declining trend in earnings per share and a volatile stock price, it remains a prominent player in the banking industry. The bank has also maintained dividend payments for 13 consecutive years, a testament to its financial resilience. Moreover, six analysts have revised their earnings upwards for the upcoming period, showing a degree of confidence in the bank’s future performance.
For those interested in further financial insights and tips, InvestingPro offers a comprehensive analysis of various companies, including Citibank. These include more than 13 additional tips that can help investors make informed decisions.
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