Citi fined with 700 million USD by CFPB

Noam Stiekema

Citi fined with 700 million USD by Consumer Financial Protection Bureau (CFPB) and need to pay compensations to the borrowers because of illegal practices at credit cards. Furthermore, Citi will pay penalties for 35 million USD to the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. This is the tenth […]

Citi bank

Citi bankCiti fined with 700 million USD by Consumer Financial Protection Bureau (CFPB) and need to pay compensations to the borrowers because of illegal practices at credit cards. Furthermore, Citi will pay penalties for 35 million USD to the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.

This is the tenth such case in the practice of Consumer Financial Protection Bureau, said Tuesday the director of the institution Richard Corday.

CFPB is just marching in the industry and needs to collect such large sums, especially when most of them are returned to consumers, because there is strong political pressure on costs and the Bureau about the way it is financed. Other large banks that were fined due to violations at credit cards are JPMorgan Chase & Co and Bank of America Corp. This fine is about 1% of the total revenues of the bank for 2015.

“Citi is able to pay the cost of the agreement”, the bank said in a statement.

Since the beginning of the financial crisis in 2008 by the financial institution have paid nearly 17 billion USD for fines and court settlements. According to the Consumer Financial Protection Bureau nearly 7 million users have been affected by “deceptive marketing” practices which involve a distortion of costs and fees and charging fees for services that customers have not used. The bank fraudulently charged to nearly 1.8 million customers with unnecessary fees for the transfer on the same day while collecting payments.

By Citi said it paid benefits and have stopped selling products that are part of their agreements with the regulator, including review credit reports to the client against possible fraudulent activity and health products long.

Capital One Financial Corp, American Express Co and Discover Financial Services are among the other credit card issuers who have been fined by the Bureau since 2012.

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