Mortgage

Citi facing penalty for charging affluent minorities more for their mortgages: Reuters

OCC suspects bank didn't equally extend friendly mortgage lending terms

The Office of the Comptroller of the Currency will reportedly penalize Citibank for denying minority customers the kinds of mortgage discounts that the bank offered to many other borrowers, according to this report in Reuters.

Patrick Rucker and Pete Schroeder report some minority borrowers “were not getting the discounts they were due under a program that gives a break on mortgage rates to customers who have large deposits or wealth in the hands of the bank,” according to their sources.

As a result, Citibank could face OCC sanctions, or worse.

Fair lending standards prohibit discrimination on the basis of race, gender, age or religion.

However, many large lenders usually have friendlier deals for their more affluent and loyal customers. Lenders will often shave some points off the interest rates when lending to millionaires, for example.

The OCC first learned of the possible violations after reviewing an internal Citibank disclosure.

The bank believes said review is in error.

From the article:

In a statement provided to Reuters on Wednesday, Citigroup spokesman Drew Benson acknowledged the problems but said the bank “firmly believes it has not engaged in discrimination or violated fair lending laws.”

“In 2014, Citi self-identified errors implementing its relationship pricing program which affected a small percentage of our mortgage customers,” Benson wrote in an email. “We conducted a comprehensive review, reimbursed affected customers and have strengthened our processes and controls to help ensure correct implementation going forward.”

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