USA (bbabo.net), - Citigroup Inc (Citi Bank) will pay $25.9 million to settle allegations by the US Consumer Financial Protection Bureau (CFPB) that it intentionally discriminated against credit card applications for customers the bank identified as Americans of Armenian descent, based on the endings of their last names. Reuters reports this.

According to the regulator, from 2015 to 2021, bank managers trained employees to be wary of applicants with last names that end in “ian” (ian or yan), believing that they might commit fraud.

Many of the bank's victims were from Glendale, California, which is sometimes called "Little Armenia" and is home to about 15% of the total Armenian-American population in the United States.

Citigroup, which screens credit card applications for fraud using special software, was accused of using stricter criteria in evaluating applications and also refusing to issue cards.

The CFPB also indicated that in many cases, bank employees lied to applicants, giving false reasons for denial, while they were instructed not to discuss discriminatory issues in writing or by telephone.

Some employees referred to card applicants, who they suspected were of Armenian origin, as "Armenian bad guys" or the "Armenian Mafia of Southern California."

The $26 million settlement includes a $24.5 million fine and $1.4 million in compensation to those denied credit cards for bogus reasons for violating the federal Equal Credit Opportunity Act.

Citigroup apologized, saying it tried to thwart an Armenian fraud ring in California, but some employees apparently went overboard.

“While we prioritize protecting our bank and our customers from fraud, it is unacceptable to base credit decisions on national origin,” the bank's New York unit said.

CFPB Director Rohit Chopra told reporters that Citigroup has repeatedly violated consumer protection laws and has paid nearly $1 billion in fines and consumer restitution since 2015.

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