The Consumer Financial Protection Bureau on Wednesday announced an enforcement action against Citibank in which the institution will pay $26 million because it discriminated against Armenian Americans by denying credit card applications in an area of the country where many Armenians lived because it thought they were criminals who were likely to commit fraud.
The Background: When supervisors told employees not to discuss what was being done in writing or on recorded phone lines, that was likely a tip that the nation’s third-largest bank was doing something it shouldn’t. Individuals who applied for retail credit cards and lived in an area of Glendale, Calif. were intentionally denied and given fake reasons why their applications were not approved. Individuals who had surnames that ended in “-ian” or “yan” were targeted because those are common endings to surnames for Armenians. Approximately one-in-seven Armenian Americans live in Glendale, according to the CFPB.
- “Citi stereotyped Armenians as prone to crime and fraud,” said Rohit Chopra, the director of the CFPB. “In reality, Citi illegally fabricated documents to cover up its discrimination.”
The Penalty: Citi was ordered to pay $1.4 million back to consumers and a civil penalty of $24.5 million.
The Takeaway: It’s easy to make assumptions and jump to conclusions based on a name on a piece of paper or a computer screen. And those assumptions can influence the flow and tone of a conversation. It’s important to treat everyone the same, irregardless of their name. You likely don’t know the circumstances behind how an individual came to have his or her or their name, so making assumptions before the fact is likely going to end badly.