Citi mortgage discount program violated Fair Housing Act: OCC
Citigroup's main bank subsidiary was fined $25 million to settle allegations by the Office of the Comptroller of the Currency that the bank failed to offer home loan discounts to thousands of borrowers in violation of the Fair Housing Act.
The OCC, which released its consent order Tuesday, said in a press release that Citibank's inability to provide benefits through its Relationship Loan Pricing program to all who were eligible "adversely affected" borrowers "on the basis of their race, color, national origin, or sex.” The agency blamed a lack of training for loan officers.
Citi failed to offer discounts on home loans to roughly 24,000 eligible borrowers over a three-year period beginning in mid-2011, the OCC said. The pricing benefit is available to borrowers who maintain certain asset levels with the bank.
“The OCC found that the bank had certain control weaknesses related to its Relationship Loan Pricing program designed to provide eligible mortgage loan customers either a credit to closing costs or an interest rate reduction,” the OCC said in a press release Tuesday.
Citi neither admitted nor denied wrongdoing.
The $1.4 trillion-asset bank said it self-identified the errors in 2014, conducted a comprehensive review and “has largely completed reimbursements to the identified customers.”
“A small percentage of mortgage customers did not receive the benefit for which they were eligible, either receiving no benefit or one that was smaller than they should have,” Citi said in an emailed statement. “The errors affected borrowers across gender, race and ethnicity. Citi has no tolerance for discrimination in any form.”
The bank apologized to its customers as well.
“We continue to closely monitor implementation and, if we identify an instance in which an eligible customer does not receive the full benefit of relationship pricing as intended, we will act promptly to correct,” Citi said. "We apologize to our customers for the errors and are pleased to have the matter resolved.”