Industry News

CitiFinancial agrees to $70 million fine

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Citigroup and CitiFinancial Credit Co., a non-bank subsidiary of Citgroup, have agreed to pay a $70 million civil fine as outlined in a cease and desist order issued by the Federal Reserve Board. The order, announced today, assesses a civil penalty against CitiFinancial and requires the company to pay restitution to certain subprime personal and home mortgage borrowers. Of the $70 million penalty, up to $20 million may be used to make restitution payments to borrowers. Citigroup and CitiFinancial consented to the order without admitting any allegations. The allegations are in connection with CitiFinancial's lending activities and its conduct during an examination by the Federal Reserve Bank of New York. The Reserve Bank has alleged CitiFinancial failed to comply with rules that prohibit a creditor from requiring the signature of a spouse or other person if an applicant qualifies based on his or her own creditworthiness. Additionally, the Reserve Bank alleges CitiFinancial engaged ...