Citibank, N.A. has agreed to pay $335 million in restitution to consumers for failing to reevaluate and reduce the annual percentage rates (APRs) for approximately 1.75 million consumer credit card accounts, under terms of a consent order. However, the Consumer Financial Protection Bureau pointed to Citibank self-identifying and self-reporting the violations in deciding not to assess civil money penalties for the violation.
Citibank failed to properly implement new APR reevaluation requirements which went into effect in 2010. Subsequently, a compliance review program identified deficiencies in APR reevaluation methodologies. As a result, Citibank disclosed the APR errors to the CFPB in early 2017, began to correct those deficiencies, voluntarily initiated the process of providing restitution to consumers, and implemented enhancements to its compliance management systems.
The CFPB found that Citibank failed to maintain reasonable written policies and procedures for conducting rate increase evaluations in violation of Truth in Lending Act requirements. Without admitting or denying the CFPB’s findings, Citibank agreed to implement a compliance plan correcting the faulty APR reevaluation process.
Companies: Citibank, N.A.
MainStory: TopStory CFPB ConsumerCredit EnforcementActions TruthInLending
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