Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Citi ordered to pay $770 million over credit card practices

share with twitter share with LinkedIn share with facebook
share via e-mail
0
07/21/2015 | 03:14pm EST
Women walk near a Citibank branch in Hanoi

(Reuters) - Citigroup Inc's consumer bank has been ordered to pay $700 million in relief to borrowers for illegal credit card practices, the U.S. Consumer Financial Protection Bureau said.

The CFPB, set up under the 2010 Dodd-Frank Act aimed at reforming Wall Street, has been cracking down in recent years on credit card companies offering payment protection, credit score tracking and other add-on products.

Citi will also pay civil penalties of $35 million each to the consumer finance watchdog and the Office of the Comptroller of the Currency.

The settlement is the CFPB's tenth such case, Director Richard Cordray said in a statement on Tuesday.

"They (the CFPB) are just marching through the industry," FBR & Co financial policy analyst Edward Mills told Reuters.

"The CFPB loves to have big numbers like this, especially when the largest percentage of the fine goes back to customers because there's a lot of (political) push-back about the cost of the CFPB and the way they're funded."

Other major U.S. banks under that have been fined over credit card misconduct include JPMorgan Chase & Co and Bank of America Corp.

FINE DETAILS

Tuesday's settlement is about 1 percent of the bank's estimated revenue for 2015, according to Thomson Reuters StarMine.

"Citi is fully reserved to pay costs associated with the agreements," the bank said in a statement.

As of May 21, Citi had paid out over $17 billion in fines and settlements since the financial crisis.

The CFPB said that about 7 million customer accounts were affected by Citibank's "deceptive marketing" practices, which included misrepresenting costs and fees and charging customers for services they did not receive.

A Citibank unit also "deceptively" charged nearly 1.8 million consumer accounts often unnecessary same-day payment fees while collecting payments, the CFPB said.

Citi said it had been issuing refunds and had stopped selling products that were part of its agreements with the regulators, including credit monitoring and debt protection products.

Capital One Financial Corp, American Express Co and Discover Financial Services are among other card issuers that have been fined by the CFPB since 2012.

Citi shares were up 0.5 percent at $59.13 in late afternoon trading on the New York Stock Exchange.

(Additional reporting by Elvina Nawaguna in Washington; Editing by Emily Stephenson and Kirti Pandey)

By Richa Naidu

Stocks mentioned in the article
ChangeLast1st jan.
AMERICAN EXPRESS COMPANY -0.95% 119.525 Delayed Quote.26.69%
BANK OF AMERICA CORPORATION 0.06% 32.9172 Delayed Quote.33.64%
CAPITAL ONE FINANCIAL CORPORATION -0.23% 97.17 Delayed Quote.28.83%
CITIGROUP INC. -0.37% 74.155 Delayed Quote.42.91%
DISCOVER FINANCIAL SERVICES -1.05% 83.58 Delayed Quote.43.30%
FIRST FINANCIAL CORPORATION -1.81% 43.2715 Delayed Quote.9.76%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
12:25pPortuguese bank CGD sells 500 million euro senior non-preferred bond
RE
12:20pOFFICE OF GOVERNOR OF STATE OF NEW YOR : Green and Clean Energy Solutions in New York Schools
PU
12:15pNORTHERN BITCOIN : Merges with leading us competitor
EQ
12:10pNORTHERN BITCOIN : Agrees merger with whinstone us, inc. by capital increase against contribution in kind
EQ
12:06pTrade Flows Set to Stay Weak, Says WTO -- Update
DJ
12:05pU.S. grants Huawei new 90-day licence extension
RE
12:05pU.S. Government Bonds Rally on Trade Concerns
DJ
11:57aTrump says 'cordial' talk with Fed's Powell covered negative interest rates, trade
RE
11:57aTrump and Powell met Monday at White House to discuss economy
RE
11:55aIFA IRISH FARMERS ASSOCIATION : Minister creed must secure guarantee on 2020 cap funding
PU
Latest news "Economy & Forex"