CHICAGO - Activists from eight Midwest cities met with a Citigroup Inc. official Monday to discuss the banking company's lending practices and its deal to buy Associates First Capital, which is not a favorite among activists.

Led by the group National People's Action, the activists told Citigroup chief administrative officer Charles O. Prince that his company's subprime-lending units should discontinue practices such as selling single-premium credit life insurance, using prepayment penalties, charging excessive fees, and mandating arbitration. They also said they want Citigroup to review all the subprime loans it has originated in the last several years and repair them by reducing their balances. Citigroup subprime subsidiaries and affiliates include Travelers Bank and Trust, Source One Mortgage, Primerica, and IMC Mortgage.

"If Citigroup buys The Associates, it will become the largest subprime lender in the country," said a spokesman for National People's Action. "The officials argue that they will clean up The Associates, but we're saying, 'You've got to clean up your own house first.' "

The activists also want Citigroup to address what they call a huge disparity between access to its prime lending products and its high-interest, subprime loans.

The People's Action spokesman said Citibank, Citigroup's primary banking subsidiary, has branches in only 10 states and the District of Columbia, while Citifinancial, its subprime subsidiary, has branches in 48 states.

The activists were from Indianapolis, Des Moines, Cleveland, and five Illinois cities: Chicago, Bloomington/Normal, Springfield, Decatur, and Danville.

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