American bank Citigroup has been fined by the US regulator the Office of the Comptroller of the Currency (OCC) for violating fair lending regulations.
The banking group will pay a fine of $25m to the US Treasury.
Go deeper with GlobalData
Citigroup fined: Details
OCC penalised Citigroup for violations of the Fair Housing Act. It which prohibits any form of discrimination in purchasing, selling, renting or financing of housing in the US.
According to Reuters, Citi implemented a new programme in 2012 to provide reduced pricing for mortgage borrowers who maintained specific levels of assets with the bank. The programme was called Relationship Loan Pricing (RLP).
However, the process had certain weaknesses which prevented some eligible mortgage customers from receiving the benefits.
OCC found that the errors affected borrowers across gender, race and ethnicity violating the Fair Housing Act.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe regulator said that the bank has largely completed a plan to reimburse all customers affected with the error. It is also taking appropriate corrective action to prevent such incidents in future.
Initially, OCC decided to issue Citi a written reprimand over the incident, but later chose to penalise the bank.
In a statement, OCC said: “The bank will provide reimbursement to approximately 24,000 customers in the amount of approximately $24m as a result of the bank’s failures and control weaknesses.”
Citi also issued a statement and said that the bank ‘has no tolerance for discrimination in any form’.
In January this year, the bank reported its 2018 results with net income soaring by 14%.
