Citibank fined for illegal discrimination against Armenian Americans

Citibank illegally discriminated against credit card applicants of Armenian origin for years, according to the Consumer Financial Protection Bureau (CFPB).

Citibank “treated Armenian Americans as criminals who were likely to commit fraud,” the CFPB said in a statement. It alleged that Citibank targeted and routinely denied credit to applicants who appeared to be of Armenian descent, based on their name and residence. 

Between 2015 to 2021, the bank’s secret statewide policy resulted in the rejection of credit card applications, rejection of requests for increased credit lines, and outright cancellation of accounts in good standing. Applicants with last names ending in “-ian” or “-yan” or applicants living in Glendale, California were targeted by this practice.

The CFPB alleged that applicants were given false reasons for being denied credit to cover up the bank’s discrimination. Citibank employees were instructed not to discuss the practice in writing or on recorded phone lines.

“Citi stereotyped Armenians as prone to crime and fraud,” CFPB Director Rohit Chopra said in a statement. “Citi illegally fabricated documents to cover up its discrimination.” The CFPB has ordered Citibank to pay $25.9 million in fines and consumer redress.

“Regrettably, in trying to thwart a well-documented Armenian fraud ring operating in certain parts of California, a few employees took impermissible actions,” Citibank spokesperson Karen Kearns said in a statement to CNN. “While we prioritize protecting our bank and our customers from fraud, it is unacceptable to base credit decisions on national origin.”

Citibank said it has conducted an internal investigation and taken “appropriate actions” against those involved to prevent this from happening again.

”We sincerely apologize to any applicant who was evaluated unfairly by the small number of employees who circumvented our fraud detection protocols,” Kearns said.

A class-action suit has been filed in federal court accusing Citibank of routinely and illegally denying credit for nearly a decade to Californians whose last names appeared to indicate they were of Armenian descent.

Citibank instituted this “redlining” policy in 2015 with an unfounded assumption that automatically considered people of Armenian heritage as likely to commit fraud, in violation of equal credit laws, said Ara Jabagchourian, the lead attorney for the plaintiff.

Marine Grigorian, the lead plaintiff in the case, is an Armenian woman from Granada Hills, California, who had held a Costco-branded credit card underwritten by Citibank for several years in good standing. When she applied for an increase in credit limits earlier this year, the request was denied by Citibank.

“Redlining is a disgusting form of racial and ethnic discrimination by banks that the law has prohibited for decades, yet we find it is still being practiced by Citibank, one of the largest financial institutions in America,” said attorney Jabagchourian. “Labeling credit applicants as ‘bad guys’ on the basis of having Armenian last names is reprehensible, immoral and illegal.”

The suit, filed in U.S. District Court for the Central District of California, seeks to cover all individuals who suffered discrimination because of this policy. It seeks unspecified monetary damages from Citibank as well as a prohibition of the redlining policy.

“This lawsuit will ensure that Citibank ends this practice and is punished for its wanton disregard of the law,” Jabagchourian added.

U.S. Representative Anna Eshoo, who is of Armenian and Assyrian heritage, said that her family members were turned away from a hotel in Fresno, California in the 1930s, because they were Armenian.

“My relatives had no power to address the discrimination directed at them, but today, an agency I voted to create, the Consumer Financial Protection Bureau, has brought the justice needed,” Eshoo told CNN in a statement. “May their shocking behavior be relegated to the dustbin of history and never be forgotten for their fraud and deceit.”