trending Market Intelligence /marketintelligence/en/news-insights/trending/baxRiWlFj81TmdVIzws_Yg2 content esgSubNav
In This List

CFPB fines Citi units $28.8M for deceptive acts, practices


Banking Essentials Newsletter: 17th April Edition


Banking Essentials Newsletter: 7th February Edition

Case Study

A Bank Outsources Data Gathering to Meet Basel III Regulations


Private Markets 360° | Episode 8: Powering the Global Private Markets (with Adam Kansler of S&P Global Market Intelligence)

CFPB fines Citi units $28.8M for deceptive acts, practices

The Consumer Financial Protection Bureau issued a consent order and fined CitiFinancial Servicing and CitiMortgage Inc. for allegedly misdirecting customers that were looking for alternative options to avoid foreclosure or apply for relief.

The CFPB ordered CitiMortgage to pay an estimated $17 million to wronged consumers and a civil penalty of $3 million, and ordered CitiFinancial to pay approximately $4.4 million to wronged consumers and $4.4 million as a civil money penalty.

The agency said that the mortgage servicers did not share options with borrowers that could have helped them avoid foreclosures.

The CFPB said Citi was supposed to cancel the insurance for borrowers who insured their loans through CitiFinancial Servicing credit insurance if the borrower missed four or more monthly payments. The agency determined that between July 2011 and April 30, 2015, about 7,800 borrowers paid for credit insurance that the insurance agency should have canceled under those terms. However, the firm allegedly directed customer payments to insurance premiums instead of unpaid interest, which made it difficult for borrowers to pay down their loan principal.

Among other findings, the agency determined that CitiMortgage delayed borrowers' applications for foreclosure relief by requesting irrelevant and excessive documentation. The press release noted that the firm sent letters to 41,000 borrowers in 2014 requesting documents such as "teacher contract," and "Social Security award letter."

The consent order requires the firm to freeze any foreclosures related to flawed applications.

CitiFinancial and CitiMortgage are subsidiaries of Citigroup Inc.