Tag Archives: Citibank

Fraud or Contract? Homebuyers & Citibank Argue

OAKLAND, Calif. (CN) – Lawyers for a group of homeowners clashed with Citibank attorneys at a Tuesday hearing on whether the mortgage loan servicer committed fraud by charging delinquent borrowers unnecessary fees for property inspections.
In an order denying the homeowners class certification last year, U.S. District Judge Yvonne Gonzalez Rogers said the case hinges on a contract dispute, as the mortgage terms govern the validity of the charges, and inspection fees are authorized by the plaintiffs’ mortgage agreements under certain circumstances.
“Citi’s liability rises or falls on whether a fact-finder determines that a property inspection fee was authorized by the borrower’s mortgage agreement,” she wrote.
At the Tuesday hearing, Gonzalez-Rogers asked whether the plaintiffs, who live in Alabama, could choose to bring a fraud claim under Alabama law over a breach of contract claim.
In her 2012 lawsuit, lead plaintiff Gloria Stitt claimed Citi colluded with subsidiaries, affiliates and vendors on a profit-making scheme to charge unnecessary and marked-up fees to homeowners for property inspections once they defaulted on their mortgage payments. Stitt said vendors padded fees “often by 100% or more,” but never informed borrowers of the markups or profits. A borrower named Diana Ellis brought a similar lawsuit against J.P. Morgan Chase.
“It’s not a breach of contract to defraud someone of money by asking them for money they’re not obligated to pay: It’s fraud,” said Daniel Alberstone, attorney for the Citi plaintiffs.
He said that Citibank had been told explicitly by investors not to charge delinquent borrowers for certain inspections, but went ahead and charged them anyway.

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Citibank To Pay CFTC $425M Over Benchmark Manipulation

Law360, New York (May 25, 2016, 9:40 AM ET) — The U.S. Commodity Futures Trading Commission said on Wednesday that it has struck two deals with Citibank NA and affiliates totaling $425 million to end allegations that the bank manipulated the Japanese and British interbank offered rates, as well as a global benchmark for interest rate products.

Citibank and its Japanese affiliates will pay $175 million to settle CFTC claims that the bank tweaked LIBOR submissions based on internal concerns. Citibank will also pay $250 million in civil fines to settle other allegations. (Credit: AP) The…

Source: Law360

CFPB orders Citibank to pay customers over debt and collections practices

The Consumer Financial Protection Bureau said on Tuesday it ordered Citibank to pay $5 million (£3.5 million) back to customers and $3 million in penalties over its debt sales and collection practices.

In a statement, the agency said it took action against the financial services company for selling credit card debt with inflated interest rates and for not forwarding consumer payments promptly to debt buyers.

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Former Citigroup CEO: Big banks don’t work

Now this is a joke since Citigroup lobbied and benefitted from the repealing of the Glass Steagall bill…

The former CEO of Citigroup just admitted to a huge mistake.

In an op-ed published in the Financial Times, John Reed says large banks like the one he used to run are now “inherently unstable and unworkable.”

The man who was one of the chief architects of the “Big Bank” model now says the United States never should have repealed the Glass-Steagall banking act in 1999.

That’s exactly what Democratic presidential hopefuls Bernie Sanders and Martin O’Malley have been arguing on the campaign trail. They want the law reinstated. Hillary Clinton and the Republican candidates do not.

As CEO of Citi (C)from 1984 to 2000, Reed was one of the main lobbyists advocating Congress and President Bill Clinton to get rid of the Glass-Steagall Act. It had been in place since the Great Depression, and it prohibited banks from doing both investment banking (Wall Street activities like selling stocks and bonds) and retail banking (checking and savings accounts targeted at Main Street).

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Citibank’s ‘misleading’ 6.9 per cent personal loan ads referred to financial watchdog

Frank Chung news.com.au

IF YOU’RE prone to watching the advertorials in between segments on breakfast television, you may have caught this classic exchange between Jamie and Marnie on Seven’s The Morning Show.

Jamie: “I’ve always wanted to see the penguins in the Arctic. It’s Arctic, isn’t it?”

Marnie: “No it’s Antarctica.”

Jamie: “I think it’s Arctic. No — it’d be warmer up north. Should go to Phillip Island, see them there instead.”

It’s all downhill from there, as Marnie goes on to inform the viewers about the benefits of Citibank’s “super low rate” 6.9 per cent Ready Credit Flexible Personal Loan, which the lender has been advertising heavily in recent months.

The three important things you need to know? “One, it has a super low rate of just 6.9 per cent per annum,” says Marnie. “Two, it can last for three years, and three, it’s super flexible.”

Sandra, 48, an aged care worker from rural Victoria, said she saw the ads while home sick from work and decided to take out a $10,000 loan to fix up her motorbike.

She says when she phoned up to find out more, the customer service representative was “push, push, push”.

“From the word go he was insistent on getting my info for pre-approval, and I was trying to ask about early payouts and interest rates,” she said.

“He mentioned something about borrowing 80 per cent of the loan and the other 20 per cent goes on a credit card or something, I couldn’t get the gist of what he meant. I said I just want to borrow the $10,000 as a lump sum, can I do that? And he said no, you can’t.”

While the ads make clear that after three years, any remaining balance reverts to the standard variable rate of 19.49 per cent, the fine print of the deal is that the borrower can only borrow 80 per cent of the loan value — up to a maximum of $48,000 — at the 6.9 per cent interest rate.

The remaining 20 per cent must be paid back at 19.49 per cent.

Citibank also reserves the right to cancel the borrower’s fixed payment option. “If it is cancelled, the full outstanding balance of your Fixed Payment Option will also revert to the standard variable rate,” the terms and conditions state.

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FDIC Sues Citi, US Bank Over $695M Mortgage Security Loss

Law360, New York (August 20, 2015, 12:11 PM ET) — The Federal Deposit Insurance Corp. on Wednesday sued Citibank NA and U.S. Bank NA alleging they failed in their roles as trustees for residential mortgage-backed securities held by a failed bank that contributed to a $695 million loss to the regulator’s insurance fund.

The FDIC was hit with RMBS losses totaling $695 million after taking over Guaranty Bank in 2009, according to three suits filed against the securities’ trustees. (Credit: FDIC) The complaints, filed in federal district court in Manhattan, came soon after a late filing…

Source: Law360

Citibank ordered to pay $770 million over credit card practices

(Reuters) – Citigroup Inc’s (>> Citigroup Inc) 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 bank will also pay civil penalties of $35 million each to the consumer finance watchdog and the Office of the Comptroller of the Currency.

The $770 million total payout is about 1 percent of Citi’s estimated revenue for 2015, according to Thomson Reuters StarMine.

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Argentine court bars Citibank from exiting custody of disputed bonds

An Argentine court on Monday ordered Citibank Argentina not to take any further steps toward quitting its role as custodian of some Argentine sovereign bonds while a row with U.S. creditors over unpaid debt rages on, the government said.

President Cristina Fernandez’s government announced last month it was suing the local subsidiary of Citigroup Inc for striking an illegal deal with a group of New York-based hedge funds fighting for full payment on defaulted debt.

Citigroup has portrayed itself as an innocent party sucked in the center of Argentina’s bitter legal battle with the funds, forced to choose between processing interest payments in defiance of a U.S. court or not processing payments and putting its ability to do business in Argentina at risk.

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Argentina sues Citibank over deal with holdout creditors

Argentina is suing Citibank Argentina in local courts for striking an illegal deal with a group of U.S. creditors fighting the government over unpaid debt, its economy minister said on Wednesday.

The South American country’s legal action marks a fresh low in its deteriorating relations with the local subsidiary of Citigroup Inc, which has portrayed itself as an innocent party in Argentina’s bitter debt battle with the funds.

Citigroup denied violating Argentine laws and said it was disappointed by Argentina’s judicial steps. It did not detail what action it would take in response.

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Citibank To Exit Argentina Custody Business Under Pressure

Law360, New York (March 17, 2015, 12:15 PM ET) — Citibank N.A. on Tuesday said its Argentina branch will exit the custody business following threats from the Argentine government after a federal judge in New York barred the bank from paying out on bonds subject to a bitter $2.3 billion dispute with a U.S. hedge fund.

In a letter to U.S. District Judge Thomas Griesa of the federal district court in Manhattan, Citibank said that it had been subject to repeated threats that the government of Argentina would pull its operating license and bring civil and…

Source: Law360