Home / Business / Citi avoids CFPB Fine for over-charging cardholders $ 335 million

Citi avoids CFPB Fine for over-charging cardholders $ 335 million

Citigroup Inc. has taken a break from the Consumer Financial Protection Bureau and avoided a fine after unadapting cardholder payments and costing more than $ 335 million

The agency, which is being redesigned under President Donald Trump, has canceled to the decision Friday. It informed the lender that it had discovered the error by alerting the regulators and submitting it to borrowers before being asked to do so. According to a statement published on the CFPB website, the derailments affected about 1.75 million accounts.

The deal is in contrast to the $ 1

billion spent by CFPB and the Comptroller of the Currency for Wells Fargo & Co. in April for allegedly enforcing unwarranted insurance on customers who took out car loans and imposed inappropriate fees to lock mortgage rates. The case builds on a pattern of consumer abuse at the bank, which has vowed to eradicate problems and make customers unharmed.

The decision not to condemn Citigroup did not go unnoticed on Capitol Hill. The bank deprived more than one million customers of more than $ 300 million. There should be a punishment, not an "attacho" for an admission, "said Sherrod Brown, the Senate's top democrat – banking committee, in a statement." The CFPB should aggressively fight for consumers and not look the other way when banks take advantage of the customer. "

Read more about the CFPB: Mulvaney has an agency he detests

Citigroup had announced this in February, paid back credit card customers His Citibank unit violated the truth-in-lending The bill failed by passing the revaluation and lowering annual percentages for most of a decade, the CFPB said in its statement .The agency also called the New York-based bank lack of adequate written policies and procedures to ensure that

"We repeat our sincere apologies to our customers, these problems are not ht correct earlier, "Citigroup said in a statement. The company said an internal review found problems with some credit card accounts and the regulators were informed immediately. Citigroup "found no evidence of employee misconduct."

The case focuses on Citigroup's compliance with part of the CARD Act, passed by Congress in 2009. Banks are allowed to regularly change the interest rates they charge on outstanding credit card loans based on market conditions or a changing credit risk of the customer. However, the CARD Act dictated that banks that previously raised the annual interest rate on a card must review the account every six months to see if the factors that triggered the increase have changed.

Citigroup's internal investigation revealed that the company was not closely investigating customers' accounts as part of semi-annual reviews, including inaccurate verification of a borrower's solvency. For some clients who switched from a fixed interest rate to a variable interest rate that later exceeded the fixed interest rate, the bank did not conduct any rate reviews. The lender has also failed to review some accounts with several previous rate hikes.

Trump Tweet

Wells Fargo's $ 500 million fine on Wall Street raised the question of how the Trump government would punish big banks for abusing consumers. This fine was five times the agency's previous record – a $ 100 million fine against Wells Fargo to open accounts without customer authorization.

After Reuters reported in December that the agency is considering whether to proceed with tens of millions of fines against Wells Fargo, Trump tweeted his anger with the bank's "bad deeds". His government would facilitate settlements, he said, "but make penalties severe if you're caught cheating!"

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