Citibank to repay customers $335M in settlement with consumer bureau

Citibank to repay customers $335M in settlement with consumer bureau
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Citibank is paying $335 million to credit card customers that didn't receive legally mandated interest rate reductions in a settlement announced Friday by the Consumer Financial Protection Bureau (CFPB).

The bureau alleged that Citibank violated the Truth in Lending Act by failing to reevaluate and adjust the annual percentage rates (APR) for 1.75 million credit card customers. Citibank also lacked appropriate policies to ensure the rate adjustments were conducted to follow federal regulations, the CFPB alleged.

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Citibank agreed to repay credit card customers the excess interest they paid, but the CFPB did not fine the bank beyond the ordered restitution. The bureau said it agreed not to issue further penalties because Citibank reported the violations to the CFPB and and sought to compensate customers well before the Friday settlement.

The CFPB said that Citibank found several errors and deficiencies in its APR adjustment procedures during a late 2016 internal review of its credit card products. The bank reported the issues to the CFPB in early 2017 when the bureau was led by then-Director Richard CordrayRichard Adams CordrayOn The Money: Consumer bureau proposes scrapping borrower safeguards from payday loan rule | Negotiators running out of time to avert shutdown | Trump nominates World Bank critic as its next chief Consumer bureau proposes scrapping borrower safeguards from payday loan rule Supreme Court should do what Congress won’t: Rein in the Bureau of Consumer Financial Protection MORE, a Democrat appointed under President Obama.

Citibank also agreed to report to the CFPB on the implementation of policies meant to ensure credit card customers received legally mandated interest rate adjustments.

The Citibank settlement is the third agreed to under acting CFPB Director Mick MulvaneyJohn (Mick) Michael MulvaneyTrump declares national emergency at border Puerto Rico governor threatens legal action over national emergency declaration: 'See you in court' Trump to sign border deal, declare national emergency MORE. It’s the second largest behind the bureau’s $1 billion settlement with Wells Fargo, issued jointly with the Office of the Comptroller of the Currency.