Citibank To Pay Credit Card Customers $335M Restitution For APR Violations – BCFP

by Ike Obudulu Posted on June 29th, 2018

Washington, D.C., USA: The U.S. Bureau of Consumer Financial Protection (BCFP) today announced that based on a consent order,  Citibank, N.A. will pay $335 million restitution to its credit card customers for failing to reevaluate and reduce the annual percentage rates, APRs, for consumer credit card accounts.

As described in the consent order, the Bureau concluded that Citibank violated the Truth in Lending Act by failing to reevaluate and reduce the annual percentage rates (APRs) for approximately 1.75 million consumer credit card accounts consistent with regulatory requirements, and by failing to have reasonable written policies and procedures to conduct the APR reevaluations consistent with regulation.

Under the terms of the consent order, Citibank must correct these practices and pay $335 million in restitution to consumers affected by these practices. The Bureau did not assess civil money penalties based on a number of factors, including that Citibank self-identified and self-reported the violations to the Bureau, and self-initiated remediation to affected consumers.

The Bureau of Consumer Financial Protection (Bureau) said it reviewed the credit card account management activities of Citibank, N.A. and identified the following law violations:

(1) violations of the Truth in Lending Act (TILA), as implemented in Regulation Z, by failing to reevaluate and reduce the annual percentage rates (APRs) for certain consumer credit card accounts consistent with the
requirements of section 1026.59(a) of Regulation Z; and

(2) violations of violations of the Truth in Lending Act (TILA), as implemented in Regulation Z, by failing to have reasonable written policies and procedures in place to conduct the APR reevaluations consistent with the requirements of section 1026.59(b) of Regulation Z.

bcfp citi bank consent order

The Bureau of Consumer Financial Protection (BCFP)  – formerly Consumer Financial Protection Bureau (CFPB)  – is an agency of the United States government responsible for consumer protection in the financial sector. BCFP’s jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors and other financial companies operating in the United States.

The CFPB’s creation (now BCFP) was authorized by the Dodd–Frank Wall Street Reform and Consumer Protection Act, whose passage in 2010 was a legislative response to the financial crisis of 2007–08 and the subsequent Great Recession.

The Bureau of Consumer Financial Protection helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives.

Author

Ike Obudulu

Ike Obudulu

Versatile Certified Fraud Examiner, Chartered Accountant, Certified Internal Auditor with an MBA in Finance And Investments who has both worked for and consulted with some of the world's largest companies on main street and wall street in over 20 countries, Ike brings his extensive reporting and investigations experience to bear on his role as Chief Editor.
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