“Regrettably, in trying to thwart a well-documented Armenian fraud ring operating in certain parts of California, a few employees took impermissible actions. While we prioritize protecting our bank and our customers from fraud, it is unacceptable to base credit decisions on national origin.”
That’s from a statement sent to CNN signed by a spokesperson for Citi (aka Citigroup).
Citi also stated “We sincerely apologize to any applicant who was evaluated unfairly. Following an internal investigation, we have taken appropriate actions with those directly involved in this matter, and we promptly put in place measures to prevent any recurrence of such conduct.”
Wait up, wait up. Armenian fraud ring? It’s a thing. We’ll get to it.
How does SorryWatch rate Citi’s apology? Eh. Not good. It works to minimize what happened. “Regrettably… a few employees… took impermissible actions.” Impermissible actions which broke the law. You know, CRIMES. But only a few employees!
It does use the word “apologize,” so points for that. Is it specific about what they did? Not much. Clearly they did base credit decisions on national origin, apparently on whether they thought you were Armenian. Which they decided by the sophisticated method of screening for names ending with “ian” or “yan.” What sort of credit decisions? They don’t specify.
Yeah, sneaky expression and her name ends with “ian.”
They do not address the impact of those credit decisions.
Like their impact on real estate agent Mary Smbatian. Smbatian told the Washington Post, “I had so much trust in Citibank. And then one day, just like, out of the blue, they just basically [upended] my life completely.” Citi closed her and her husband’s personal, credit and business accounts, without explanation. Accounts they’d had for nearly two decades. Wham! They were locked out for 30 days. Checks sent to them were turned away. Their credit was damaged. They lost spending points and rewards. Each thought the other one must have made some mistake that caused the bank actions. (Strife!) Smbatian and her husband opened new accounts at four different banks. Only later did they learn this happened because of their Armenian surnames. They are now part of a class-action lawsuit.
The reason these apology statements were made is that the Consumer Financial Protection Bureau (CFPB) heard about this, investigated, and brought a case against Citi under the Equal Credit Opportunity Act. They found that Citi did this at least from 2015 to 2021, affecting hundreds of people. Those “few” employees called Armenians “bad guys” or, as CFPB head Rohit Chopra put it, “stereotyped Armenians as prone to crime and fraud.” Citi “illegally fabricated documents to cover up its discrimination.” Managers told employees not to “discuss it in writing or on recorded phone lines.” But some did, as in one employee asking for help with excuses to refuse credit. “It’s been a while since I declined for possible credit abuse/YAN — gimme some reasons I can use.”
The bank must pay $25.9 million – $1.4 million to people they discriminated against, and $24.5 million as a penalty. That amount was called “meaningless to Citi” by Dennis Kelleher of a financial reform advocacy group, Better Markets, who said it was about .1% of Citi’s revenue for one quarter. “Individual bankers, including executives and supervisors, must be personally punished with meaningful fines and barred from working in the industry.”At a December 2023 hearing of the Senate Banking Committee, the bank’s CEO Jane Fraser said Citi is “deeply sorry” and repeated that it was a “small number of employees” who did the forbidden things. (How many covered it up? Surely a tiny eensy-beensy number, so minute as to be undetectable.)
Back to rating the apology: how does “in trying to thwart a well-documented Armenian fraud ring…, a few employees took impermissible actions… we prioritize protecting our bank and our customers from fraud” stack up on “no excuses, explanation only if needed” scale?
Not that great. So their credit department wasn’t operating from a simple “we don’t like Armenians, no credit for them” rubric, but instead the highly nuanced “we heard some fraudsters were Armenian therefore no Armenians get credit and if we gave them credit before we take it away”? Not better.
She could borrow a bunch of money and flee the country, right?
We’re really unhappy with their “say why it won’t happen again” step. Saying ‘hardly any of us did those bad things’ isn’t persuasive, especially without more facts. What were the job titles of those “few employees”? Did this start with one person with authority over many others? Two people? One department? Three?
And why? What was their incentive? According to testimony, there were efforts to hide this discrimination from higher-ups by avoiding putting things in email, so why did they do it? Were they getting rewarded for identifying “credit risks”? After Wells Fargo]was discovered opening large numbers of unwanted accounts for customers, the bank said they had, and would change, a system that set goals for branch managers to open accounts and rewarded them for hitting those goals. Was there – is there – a system at Citi with perverse goals? (Because it’s perverse for a bank to deny credit to customers with good credit histories.)
“[W]e promptly put in place measures to prevent any recurrence of such conduct”? WHAT MEASURES ARE THOSE? Did Citi tell employees, ‘leave Armenians alone’? Or did they tell employees, “Really, really, don’t put it in email, no really”? Did they say “there is no quota for labeling people credit risks and you will not be rewarded for doing so”? Did they order a sensitivity training? If so, who got the training? Lowly minions, or the perfectly evolved executives too? Basically, if your “measures to prevent” are secret, we can’t trust them.
Okay, so what about this “well-documented Armenian fraud ring”? This apparently refers to the “Armenian Power” gang. It’s a criminal gang, started among immigrant Armenians, which peaked in the 1990s. In 2011 a gigantic law-enforcement sweep arrested nearly 100 people, on charges including kidnapping, fraud, extortion, identity theft, loansharking, robbery, witness intimidation, drug trafficking, marijuana cultivation, bringing narcotics into prison, and oh yeah murder.
A witness could EASILY be intimidated by her.
Content creators leapt on the idea, inserting Armenian gangs into Grand Theft Auto V, House of Cards, Message from the King, NCIS Los Angeles, Ray Donovan, and The Shield. Also, apparently, into the nightmares of the credit department at Citibank in the Los Angeles area. Many Armenians live in the area, (particularly Glendale, East Hollywood, and Central LA).
Maybe 80,000 Armenians and Armenian Americans live in Glendale alone. Several hundred thousand live in Southern California. Obviously most are not members of Armenian Power (which includes non-Armenians). So it’s not very likely that someone with an Armenian last name is a member of Armenian Power. 100 gang members is .05% of 200,000 people. To find them, you might want to actually look at their actual *&^+@$# credit history, right? Actually?
It would be nice to think bankers could do the math
Oh, and you know what? We don’t feel like we can kick Citigroup around without mentioning their enthusiastic financing of new fossil fuel projects. That’s something that’s going to hurt everyone – you, us, notable Armenian Kim Kardashian. Even Citi employees and the members of Armenian Power.
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