Citi avoids the fine of the CFPB for overcharging $ 335 million

Citigroup Inc. took a break from the Consumer Financial Protection Bureau, avoiding a fine after failing to adjust rates for cardholders and costing them over $ 335 million.

The agency, which is being reworked the decision Friday. He credited the lender for discovering the error, alerting the regulators and putting himself in repayment to the borrowers before receiving the "money" from him. order to do so. The breaches affected approximately 1.75 million accounts, according to a regulation posted on the CFPB website

The agreement contrasts with the $ 1 billion penalties imposed by the CFPB and the Office of the Comptroller of the United States. currency Wells Fargo & Co. in April for allegedly forced unwanted insurance on customers who took out car loans and imposed inappropriate fees to lock in mortgage rates. The case is based on a series of consumer abuse at the bank, which has vowed to uproot problems and reassure customers.

The decision not to impose fines on Citigroup did not go unnoticed on Capitol Hill. The bank cheats on more than one million customers over 300 million dollars, there should be a penalty, not an "attaboy" to confess, "said in a statement Sherrod Brown, the main Democrat of the Committee senatorial of banks. "CFPB should aggressively fight for consumers, not look away when banks profit from customers."

Learn more about CFPB: Mulvaney has a management agency that he hates

Citigroup had announced in February that credit card customers were paying back.Its Citibank unit broke the truth in loans law by failing to carry out revaluations and reduce annual percentage rates for the largest part of a decade, said the CFPB in its communiqué . "We reiterate our sincere apologies to our customers for not having corrected these problems sooner," Citigroup said in a statement. The company said that an internal review revealed problems with some credit card accounts and that the regulators were quickly informed. Citigroup "found no evidence of employee misconduct."

The case focuses on Citigroup's compliance with part of the CARD Act, which was passed by Congress in 2009. Banks are allowed to periodically change current interest rates loans on credit cards depending on market conditions or credit risk changing a customer. But the CARD Act stipulated that if banks previously raised the annual rate on a card, they would have to review the account every six months to determine whether the factors that motivated the increase had changed.

Citigroup's internal investigation revealed that its clients 'accounts during biannual reviews, including by incorrectly examining the borrowers' ability to pay. Nor did the bank make tariff revisions for certain customers converted from a fixed rate to a variable rate that subsequently exceeded the fixed rate.

Trump Tweet

The Wells Fargo fine of $ 500 million CFPB had raised questions on Wall Street about how the Trump administration would punish big banks for abusing consumers. This penalty was five times larger than the old agency record – a $ 100 million penalty also against Wells Fargo for opening accounts without clients' permission.

Reuters reported in December that the agency was reviewing tens of millions of fines against Wells Fargo, Trump tweeted his anger with the "bad deeds" of the bank. His administration would relax the rules, he said, "but severely punish penalties when caught in the act"