WASHINGTON -- Employees at a Citigroup consumer lending subsidiary commonly used deceptive sales practices to add unnecessary insurance coverage to home equity loans taken out by minority, elderly, and uneducated borrowers, according to an affidavit filed in federal court by the Federal Trade Commission.

The agency, which has sued Citigroup for alleged predatory lending practices at the former Associates First Capital, filed the affidavit as part of a response to Citigroup's request top have the suit thrown out.

In the affidavit, Gail Kubiniec, a former assistant manager of a CitiFinancial branch in Tonawanda, New York, testified that common practice at her branch included identifying vulnerable borrowers and adding insurance coverage to their loans without their knowledge.

"If someone appeared uneducated, inarticulate, was a minority, or was particularly old or young, I would try to include all the coverages CitiFinancial offered," she said. "The more gullible the consumer appeared, the more coverages I would try to include in the loan."

The allegation adds a new wrinkle to the FTC's lawsuit against Citigroup, as the bank has previously claimed that any predatory practices engaged in by Citigroup affiliates were limited to the former Associates unit, and occurred before it was acquired by Citigroup.

Citigroup is currently facing questions from the Federal Reserve Board about Associates' lending practices in connection with Citi's application to acquire European American Bank.

"The sales tactics that are alleged would constitute a serious violation of thew company's standards. As soon as we learned of the allegation we began a thorough investigation. Neither our investigation nor routine audits have yielded any substance to support the allegation," said Christina Pretto, Citigroup spokesperson.

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