ICP / Fair Finance Watch: Opposition to Citigroup
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Updated March 17, 2005
Update of March 17, 2005: In the Federal Reserve Boards order issued late on March 16 on the Citigroup - First American Bank application on which Inner City Press / Fair Finance Watch has been commenting as set forth below since October 2004 -- not only on predatory lending issues, but also Citigroups serial crises in Japan, the European bond market, and, only yesterday, money laundering for Pinochet -- the Fed states as follows:
Given the size, scope, and complexity of Citigroups global operations, successfully addressing the deficiencies in compliance risk management that have given rise to a series of adverse compliance events in recent years will require significant attention over a period of time by Citigroups senior management and board of directors. The Board expects that management at all levels will devote the necessary attention to implementing its plan fully and effectively and will not undertake significant expansion during the implementation period. The Board believes it important that managements attention not be diverted from these efforts by the demands that mergers and acquisitions place on management resources.
To emphasize: the Fed expects that Citigroup will not undertake significant expansion for the foreseeable future. The Feds inappropriate failure to address last weeks comment and Report (below on this page), and yesterdays Pinochet report on Citigroup from the Senate, will be inquired into going forward. The Order also acknowledges disparities in Citigroups mortgage lending and other issues ICP raised (click here for PDF of the Fed's order) -- but the above-quoted seems noteworthy. On this, ICPs position: While the Fed should not have given Citigroup any merger approval given the scandals that are swirling around it -- from money laundering including for Augusto Pinochet and in Japan, to rogue bond trading and predatory lending -- ICP take note of the Fed implying that Citigroup cant expand any more, for the foreseeable future. Unless Citigroup actually improves its practices, rather than only its public relations as has until now been the case, this block on expansion should become permanent. Developing.. Until next time, for or with more information, contact us.
On October 4, ICP/Fair Finance Watch filed two 21-page comments opposing Citigroups applications to acquire First American Bank, with the Federal Reserve and OCC. The comment is summarized below; subsequently comments leading up to the Federal Reserve order quoted above were serialized in Inner City Press' weekly Citi-Watch Report. This was ICP's initial comment:
PETITION TO DENY AND HEARING REQUEST BY INNER CITY PRESS / COMMUNITY ON THE MOVE AND FAIR FINANCE WATCH IN OPPOSITION TO THE APPLICATION OF CITIGROUP, INC. AND CITIBANK USA, N.A. TO ACQUIRE AND CONVERT FIRST AMERICAN BANK, SSB
October 4, 2004
On behalf of Inner City Press/Community on the Move and its members and affiliates, and of the Fair Finance Watch (collectively, ICP), this is a timely comment opposing and requesting hearings on the application of Citigroup, Inc. (along with its subsidiaries, including its national banks and the subprime lender CitiFinancial, "Citi") to acquire and convert First American Bank, SSB (First American or FAB).
Citigroup should not be allowed to acquire First American, or otherwise expand: Citigroup is embroiled in compliance scandals in nearly every one of its lines of business, from private banking through bond trading to subprime consumer finance. Beyond the particular scandals -- the suspension of its license in Japan, an investigation by the UK FSA, repeated governmental fines for predatory lending -- Citigroup displays a pattern of misleading its regulators, and retaliating against whistle-blowing employees. See infra.
As reflected in the recently-released 2003 Home Mortgage Disclosure Act ("HMDA") data, Citigroup's normal interest rate lenders disproportionately deny and exclude Latinos and African Americans, while Citigroup steers these groups to its high-rate subprime units, including the aforesaid CitiFinancial. The issues timely raised herein militate for public hearings, and for the denial of Citigroup's applications.
Because the 2003 HMDA data has recently been released, ICP begins this comment with a review of Citigroup ongoing disparities in lending. This mortgage lending analysis will be followed by timely presentation that Citigroup remains a predatory lender, and that it is increasingly exporting the worst of its predatory practices and its lax compliance practices.
The analysis below cumulates CitiMortgage and Citigroup's lead bank in the analyzed market, and calls the two together "Citibank;" Citibank's exclusion of African Americans and Latinos from normal-rate loans stands in contrast to the high-rate and predatory practices of CitiFinancial, which are disproportionately targeted to African Americans and Latinos.
In 2003 in the New York City Metropolitan Statistical Area ("MSA"), for conventional home purchase loans, Citibank (Citibank, N.A. and CitiMortgage together) denied loan applications from African Americans 5.79 times more frequently than applications from whites. Citibank denied Latinos 4.54 times more frequently than whites. These disparities are much worse than other lenders in this MSA in 2003, and even worse than Citigroup was in 2002 (disparity of 4.67 for African Americans, and 3.17 for Latinos). The industry-as-a-whole in 2003 in this MSA had denial rate disparities of 1.78 for African Americans, and 1.53 for Latinos. Citigroup is both much worse than other lenders, and is getting worse, year-to-year.
Citibank's higher-than-aggregate denial rate disparities are not explained by any greater-than-normal outreach with normal-priced credit to African Americans or Latinos. In 2003 in this MSA, Citibank made 3873 conventional home purchase loans to whites (more than in 2002), only 432 to African Americans, and 450 to Latinos (fewer than in 2002). By contrast, the aggregate industry in this MSA in 2003 made 7791 such loans to African Americans, 7516 to Latinos, and 37,998 to whites. For these three groups, the aggregate made 14.6% of its loans to African Americans, and 14.1% to Latinos. For Citibank, the figures were much lower: 9.1% of loans to African Americans, and 9.5% to Latinos (again, even lower than Citibanks already disparate percentage in 2002).
For refinance loans in the NYC MSA in 2003, Citibank denied applications from African Americans 4.07 times more frequently than applications from whites. Citibank denied Latinos four times more frequently than whites (worse than its 2.73 disparity in 2002). This is much worse than other lenders in this MSA in 2003: the comparable denial rate disparities for the industry as a whole in 2003 were 1.78 for African Americans, and 1.69 for Latinos. Citibank is a redliner; as documented infra in this comment, CitiFinancial is a predatory lender.
In 2003 in the Long Island MSA for conventional home purchase loans, Citibank (Citibank, N.A. and CitiMortgage together) denied loan applications from African Americans 3.12 times more frequently than applications from whites. Citibank denied Latinos 3.15 times more frequently than whites. This is much worse than other lenders in this MSA: the denial rate disparities for the industry as a whole in 2003 were 1.89 for African Americans, and 1.47 for Latinos.
Citibank's higher-than-aggregate denial rate disparities are not explained by any greater-than-normal outreach with normal-priced credit, particularly to Latinos. In 2002 in this MSA, Citibank made 1366 conventional home purchase loans to whites, only 85 to African Americans (fewer even than in 2002), and only 115 to Latinos. By contrast, the aggregate industry in this MSA made 2003 such loans to African Americans, 3634 to Latinos, and 25,700 to whites. For these three groups, the aggregate made 6.4% of its loans to African Americans, and 11.6% to Latinos. For Citibank, the percentages were lower both for African Americans (5.4% of Citibank's loans, lower even than in 2002) and for Latinos (7.3% of Citibank's loans). Citibank's exclusion of Latinos in this MSA (and others listed below) is striking.
Citigroups record in Texas, where it now seeks to expand, is particularly egregious. Its main prime lender there, CitiMortgage, in 2003 in the Houston MSA denied the conventional home purchase loan applications of Latinos SIX TIMES more frequently than applications from whites. Citibank denied African Americans 3.22 times more frequently than whites. This is much worse than other lenders in this MSA: the denial rate disparities for the industry as a whole in 2003 were 2.17 for African Americans, and 1.70 for Latinos (CitiMortgages denial rate disparity is over 3.5 times higher).
Citigroup's higher-than-aggregate denial rate disparities are not explained by any greater-than-normal outreach with normal-priced credit to African Americans or Latinos. In 2003 in this Houston MSA, CitiMortgage made 360 conventional home purchase loans to whites, only 48 to African Americans, and only 41 to Latinos. By contrast, the aggregate industry in the Houston MSA in 2003 made 7441 such loans to African Americans, 15,317 to Latinos, and 40,885 to whites. For these three groups, the aggregate made 11.7% of its loans to African Americans, and 24.1% to Latinos. For CitiMortgage, the figures were notably lower, particularly for Latinos: 10.7% of loans to African Americans, and only 9.1% to Latinos (versus the aggregates 24%).
In the Dallas MSA in 2003, CitiMortgage denied the conventional home purchase loan applications of Latinos OVER NINE TIMES more frequently than applications from whites. Citibank denied African Americans 2.59 times more frequently than whites. This is worse than other lenders in this MSA: the denial rate disparities for the industry as a whole in 2003 were 2.31 for African Americans, and 1.95 for Latinos (CitiMortgages denial rate disparity is over 4.6 times higher).
Citigroup's higher-than-aggregate denial rate disparities are not explained by any greater-than-normal outreach with normal-priced credit to African Americans or Latinos. In 2003 in this Dallas MSA, CitiMortgage made 261 conventional home purchase loans to whites, only 13 to African Americans, and only 19 to Latinos. By contrast, the aggregate industry in the Dallas MSA in 2003 made 4532 such loans to African Americans, 6790 to Latinos, and 44,015 to whites. For these three groups, the aggregate made 8.2% of its loans to African Americans, and 12.3% to Latinos. For CitiMortgage, the figures were notably lower: 4.4% of loans to African Americans, and only 6.5% to Latinos.
In 2003 in the Chicago MSA for conventional home purchase loans, Citibank (Citibank FSB and CitiMortgage together) denied loan applications from African Americans 7.5 times more frequently than applications from whites. Citibank denied Latinos 6.04 times more frequently than whites. These disparities are much worse than other lenders in this MSA in 2003, and even worse than Citigroup was in 2002 (disparity of 4.23 for African Americans, and 3.74 for Latinos). The industry-as-a-whole in 2003 in this MSA had denial rate disparities of 3.08 for African Americans, and 2.36 for Latinos. Citigroup is both much worse than other lenders, and is getting worse, year-to-year.
For refinance loans in the Chicago MSA in 2003, Citibank denied applications from African Americans 4.79 times more frequently than applications from whites. Citibank denied Latinos 2.93 times more frequently than whites (worse than its 2.73 disparity in 2002). This is notably worse than other lenders in this MSA in 2003: the comparable denial rate disparities for the industry as a whole in 2003 were 3.02 for African Americans, and 1.99 for Latinos. Citibank is a redliner; as documented infra in this comment, CitiFinancial is a predatory lender.
In 2003 in the Los Angeles MSA for conventional home purchase loans, Citibank (Citibank FSB and CitiMortgage together) denied loan applications from African Americans 2.78 times more frequently than applications from whites. Citibank denied Latinos 3.74 times more frequently than whites. This is much worse than other lenders in this MSA: the denial rate disparities for the industry as a whole in 2003 were 1.84 for African Americans, and 1.65 for Latinos.
In 2003 in the Washington DC MSA for conventional home purchase loans, Citibank (Citibank FSB and CitiMortgage together) denied loan applications from African Americans 5.44 times more frequently than applications from whites. Citibank denied Latinos 5.63 times more frequently than whites (up from a 3.03 denial rate disparity in 2002). This is much worse than other lenders in this MSA in 2003: the denial rate disparities for the industry as a whole were 2.84 for African Americans, and 2.35 for Latinos.
For refinance loans in this MSA in 2002, Citibank denied applications from African Americans 5.22 times more frequently than applications from whites (up from a 4.38 disparity in 2002).
In 2003 in the Newark MSA for conventional home purchase loans, Citibank (Citibank FSB and CitiMortgage together) denied loan applications from African Americans SIX times more frequently than applications from whites. Citibank denied Latinos a whopping ELEVEN times more frequently than whites. This is much, much worse than other lenders in this MSA: the denial rate disparities for the industry as a whole in 2003 were 2.53 for African Americans, and 2.03 for Latinos.
Citibank's higher-than-aggregate denial rate disparities are certainly not explained by any greater-than-normal outreach with normal-priced credit to African Americans or Latinos. For these three groups, the aggregate made 11.7% of its loans to African Americans, and 12.8% to Latinos. For Citibank, the figures were 7.9% of loans to African Americans, and only 5.7% to Latinos. Citibank is a redliner; as documented infra in this comment, CitiFinancial is a predatory lender.
Beyond the FRBs own May 2004 charges of predatory lending (and obstruction of investigation) at CitiFinancial, consider these sample complaints (and insiders descriptions) that continue to stream in to ICPs CitiFinancial Watch:
Subj: citifinancial predatory lending
Date: 8/6/04 1:25:17 PM Eastern Daylight Time
From: [ ]
To: CitiWatch [at] innercitypress.org
i have been on both sides on the lending game. i was in the consumer finance business for 16 years. i am also a current customer of citifinancial. i was informed recently that my "consumer loan" that originated in 2002 was an interest bearing loan. this loan is secured by an auto. i was not told this at loan closing, nor would i have agreed to this had i known. the young and dumb manager informed me that i was given this information at loan closing, at which point she was a secretary, but she remembers that day two years prior when her manager closed the loan. i am furious .. talk about predatory lending...
Date: 2/20/04 2:05:39 AM Eastern Standard Time
From: [ ]
To: CitiWatch [at] InnerCityPress.org
I want to share my Citifinancial experience with you. I don't expect any help, I'm way beyond help. It will be nice to just get this off my chest. I'll start by telling you that I have the distinct pleasure of having Fairbanks Capital "servicing" my first mortgage and Citifinancial holds my second mortgage. When I first took out the second mortgage, it was with a company called Security Pacific. Although the interest rate was high, I was at least treated fairly. My troubles began when Citifinancial took over my note. My original contract allowed for a $3.00 late fee for late payments and that was all that was ever imposed. This all changed when Citifinancial took over. There, seemingly, was not enough money in the world to keep these people happy, and daily interest? That was not part of the contract that I signed and agreed to! I was repeatedly harassed at work (sometimes called 3 times a day) despite the fact that they were repeatedly informed that personal calls were against company policy. They once left a message with a co-worker for me that stated, "you'll be sorry if you do not get a payment in today". They came to my workplace to collect on the spot payments on more than one occasion. They came to my home repeatedly demanding payment. A neighbor reported that their collection person was seen walking around my house, peering into my windows one day when I was not home. They opened my mailbox and left personal messages - no stamp!! The harassment was unbelievable. In closing, I believe that Fairbanks Capital and Citifinancial worked hand in hand to bankrupt me. I cannot possibly meet their demands.
Date: 12/2/03 1:58:00 AM Eastern Standard Time
From: [ ]
To: CitiWatch [at] innercitypress.org
Hello. I have been reading your site re Citigroup. I have been having a lot of trouble with them, much like your posts say. I originally borrowed $800 from CitiFinancial, with my 1992 Geo for collateral. They added $200 for 3 years, total $600, and said I needed to have them as liability on insurance. They never told me that I can get it on my own, then borrowed $1000. Payments were $176 / mo . then I believe I got $500, not sure, it seem like I have been paying on this forever and yet they say I owe $4600 now. They wanted to give me a mortgage for $10,000. I said no, I asked for 500 to buy another car, they said no, but would give me $10,000 home loan. I did not do. They called endlessly, called friends etc even though I had been returning calls. They left messages on my machine in detail about what I owe etc. They did not want the car because I had told them that the motor went, I told them to pick it up they said they did not want my car, they want my home. I said I never signed my home for any collateral, they said watch them do it. They also insisted I give them post-dated checks, I said that was illegal they said no, as long as I get the $ in account, so I was forced to do that on approximately 4 checks, which was a hatchet over me. then I lost work and began a domino effect, I could not pay a payment I was paying 22% ... it did not dawn on me that the payoff was always the same as if I had never paid anything. then I again lost work and could not pay, I asked for 3 weeks to borrow / they said no. now they are suing me, and have in past to take my home. I am 68 years old senior, and don't know what to do or what my rights are, and don't have money for a lawyer. I pray I don't lose my home..
While ICP has received many more consumer complaints, in order to assist your agency in asking Citigroup the questions that need to be asked, answered, and acted upon, here below are sample descriptions of CitiFinancials practices, from insiders:
Subj: Everything you always wanted to know
about credit insurance but was afraid to ask
Date: 6/8/04 3:02:08 PM Eastern Daylight Time
From: [Long Time District Manager] To: CitiWatch [at] innercitypress.org
Re: ICP's pressure to revise Citi's personal property insurance sales. I followed this closely. It was awfully embarrassing to ask for fishing tackle, bug zappers (literally), and ice chests as security. Bravo to ICP!
...As far as the ancillary products, we sold Home and Auto (an over inflated auto club program that included additional warranties on major home appliances, emergency room/ambulance reimbursements, support to initiate neighborhood watch programs, child registry, etc. Really not a lot to do with respect to a personal or home equity loan. We sold them in 1, 3, 5 & 10 year policies at premiums of from $249 to $1749. The approach we took to selling these was to sell three year or less policies on our personal loans, and 5 year or more policies on anything that was secured on real estate...
ROCopoly.... In order to qualify, the branch team had to score QUICPlan (Quarterly Incentive) points. These were accumulated based upon growth (in the personal and real estate loan portfolios), delinquency (30 day personal loan, 60 day personal loan, 60 day real estate, and 60 day sales finance), and insurance sales (personal loan $/K, Equity Plus $/K, real estate premium/loan, and non-credit premium/loan). Then there were the various ROCopoly categories: SFCs (which had a per person pay out based upon the 5-age of the baseline converted), PB renewals (calculated as the SFCs were), Home and Auto (paid out on a pool basis - and yes this would be divided among the branch team), Equity Plus and then Real Estate.
You referenced a DM to BM memo (that frankly sounded all too familiar) whereby the DM states that "...where credit approval exceeds...authority...refer to [me]...if it qualifies for Equity plus...(s)he should find notes ...reflecting that conversation..." The notes would ideally be placed in the MAESTRO system, although it is possible that these notes would just be hand written on the Pricing Exception Request form. Normally, these pricing exceptions had to go higher than the DM up the chain of command. If the branch and the DM could not overcome the customers objections to a 24.99% - 27.99% rate, you had to seek an approval to the exception request. There was always mass confusion on what we were to offer those customers who received a particular direct mail piece. It involved double speak from Clements (for over two years he adamantly stated that the branches were to charge the noted rate (18.99%) on the mail piece, and declared he would defend any branch cited for doing so by audit, and then he would alter this claim refuting he had ever stated such, and with equal adamancy declare that the branch that did not price at the required pricing was out of compliance and deserved an audit citation. Exceptions were sought by indicating that you had attempted to sell a real estate secured loan at a much lower rate (from 8% to some 18.99% depending on the qualifying demographics such as equity position, credit, and ability to pay...
You asked about the discretion allowed to BMs in their quest to secure sales finance dealers. We were instructed to source dealers with a higher probability of home owners as customer: carpet, home improvement, higher end furniture stores. The BM was supposed to source this business, but the company also has people in place whose responsibility is to just source corporate accounts. In terms of measuring the number of home owners: the results are tracked from the time that the first sales contract is purchased. Every dealer had its own report showing what the home ownership status was, how much equity was in the home, what the high credit might be for that individual, and if you coupled that report with another branch/district report the delinquency status of that customer could also be tracked, as could the yield on his sales account...
One more item. Thought you might want to understand the insurance penetration formula. On ROC (manager yearly bonus program) and ROCOpoloy (employee monthly bonus program) points were gained towards bonuses based on the "dollars per thousand" method. For example: sell a single life premium of $250 and the total of payments on the loan is $5000 you divide $250 by $5000 and multiply times 100. This gives you $50 per thousand for the bonus program. As you can see, by simply selling life insurance only, you won't even qualify. Thus the pressure to sell. They have a similar method for monthly premium real estate loans too. Don't let the "customer first" thing fool you, its still required that you sell insurance. If you don't, you don't get paid bonuses!
Subj: Consumer Appreciation Days [at CitiFinancial]
Date: 6/1/04 10:05:43 AM Eastern Daylight Time
To: CitiWatch [at] innercitypress.org
Just read the excerpt from the 13-year manager re: CAD (Customer Appreciation Days). This is one of those events that I was going to allude to down the road. This manager is right on in his/her assessment. It's a program that has gone on for years. At one time it lasted from 3 days to a week during the months of May and November. It has since become a two week stint. Honestly, we drove it like hell! Recognition for a successful CAD month was EXTREMELY HIGH! We expected branches to write 100 loans during a week's period of time.. and yes, God help the manager whose area didn't have substantial growth after a week of this type of production! Usually they did, but occasionally there were those areas that kept the brow beatings at bay by simply "re-writing balances only" (just a straight refinance of an account with nominal cash advance). The loans were not supposed to simply help the customer w/a refinanced loan at a lower payment, the loan was to increase the amount owed by the borrower, increase the security (collateral) position, and provide further "protection" on the loan.
"Protection" was the safe means to refer to credit and ancillary insurance products. We coached to offer protection, not credit insurance - ever. Thirty percent of a branch's profit is attributed to the sales of insurance products. In fact, from the credit insurance premiums that a branch sold, they received 35% commission if Accident & Health or Involuntary Unemployment Insurance, and 30% commission if for credit life insurance. All of the ancillary products - which included something called Home and Auto - are worth 40% commission back to the branch. Every branch, as well as every employee is required to track their results. Regardless of the staff position, every one is held accountable to produce at acceptable levels. This is not measured simply by the dollar amount of premium sold, either. For instance, it is possible for an employee to sell as much as $20,000 insurance premiums on a $120,000 loan. The $20,000 premium may satisfy that employee's premium goal but that was never regarded as sufficient measure! Insurance sales were tracked on "dollar per thousand" , or "dollar per hundred". This was a method whereby the amount of premium was measured against the total loan volume (or in the case of personal loans, it was measured against the "total of payments"), in order to keep track of the percentage of premium sales. Normally every insurance product that was sold was tracked on an individual employee basis: credit life, credit disability (accident and health), credit involuntary unemployment, and the various ancillary products.
As for SFC's...these are those accounts generated from a retail sales contract that was opened to finance a customer's purchase from a community business (furniture, appliances, home improvement items). In order to appeal to the business owner, Citi offered great programs such as 90-, 120-, even 360-day same-as-cash, or no interest etc., at very reasonable interest rates as low as 16.99% to 24.99% depending upon the quality of business that the business can generate. As these contracts are purchased into the branches, it is the responsibility of the branch team to "convert" them into personal, Equity Plus, or real estate loans. The SFC program was tracked as intensely as the insurance sales were. And again, certain rules applied to ensure growth to the branch: there had to be a $500 advance on these loans in order to get ROC-opoly credit. Huge audit violation to payoff a deferred program sales finance account, but everything else had to be converted because no income is credited to the branch from the existence of sale finance accounts. On any branch-, district-, state- (any level really) Goal Report, or ROC Report as it came to be known, you could see the profit margin that was possible given the sales finance base, but the next line to the report subtracted out that income. The income went somewhere (!), but the branches were not entitled to include it in the Funny Money known as the ROC Report (which ultimately lead to what was then annual bonuses of up to a full year salary for some branch managers!), or ROCopoly. (I guess that's some of the profit that allows Citi to buy out restitution programs when they really screw up!)
Subj: Re: CAD
Date: 6/1/04 10:39:31 PM Eastern Daylight Time
To: CitiWatch [at] innercitypress.org
... Every time that we would merge with or acquire another faction, I always pitied the poor bastards for the integration process that we would require. It was always a big deal when we merged with or acquired another group, to run a huge solicitation program of some kind or another. The idea was that we would host a "grand re-opening" by acquainting our new customer base to CitiFinancial. That's probably why the "13 year manager" from whom you recently received correspondence is feeling so much pressure. Besides CAD being CAD, there's the additional expectations of what the new WaMu branches can provide, and if they are not doing so, how the existing Citi branch managers can set the tone for them...
"Making Payoffs difficult" -- We had a whole program - "Save a Payoff"! My branches could not quote a payoff until they faxed me the demand, and I personally called the customer to find out what they were going to get in replacement of my Citi financing. I was to coach my branch managers that they have 28 days to get the payoff to the requesting party and if any one had any issues about this length of time required to respond that they should call the District Manager, myself. For awhile, we (District Managers) were instructed to have the customer call our Region Managers if we could not convince the customer to not pay off their account. Of course there was a two fold message to this: 1) the DM clearly did not have the capacity to bargain with the customer. 2) the DM needed to be humiliated by calling upon their RM for support. The response from the branches may, or may not have been that calculated. The work load in the branches is immense! So the fact that payoff demands are delayed may not always be at the DM/RM directive, it could also be that the branches are simply over burdened and are unable to respond to the request.
Subj: Citifinancial practices
Date: 5/29/04 6:11:28 PM Eastern Daylight Time
From: [13-year CitiFinancial branch manager]
To: CitiWatch [at] innercitypress.org
Just read your comments regarding the $70 million dollar Citifinancial settlement. I'll tell you, the pressure is on for managers and staff to book business with high balances at high rate to increase yields and profits. Take these two examples: Citifinancial has a bi-annual event they refer to as Customer Appreciation Days (CAD) in which they "thank" their customers by soliciting them to rewrite their personal loan with either no payment until July (event held in May) or Next Year! (November event). The idea here is to rewrite every customer, recharge them for insurance premiums and fees, and advance a small amount, say $500 or so in order to renew income and cure delinquency. They expect to add one month in productivity each time, thus getting 14 months production in 12.
Tracking by branch staff starts with calling customers and setting up appointments early in the month so to maximize the number of rewrites they can get. And, you are accountable for these results! Just another way to increase predatory lending income! (By the way, personal loans are rate structured to 27.99% on renters and 24.99% for homeowners, a rate exception is an audit exception and highly frowned upon by the company!)
As for the lawsuit issue, the pressure is on branch staff to "convert" as many sales accounts to loans as possible. Rocopoly tracks SFCs because the branches don't make any income from sales accounts. They must have a high rate loan to make any money at all. The loans in question were converted sales accounts, written on 90 day, 180 day or 360 day same as cash deals converted to 17.99%-21.99% second mortgage loans. They sometimes used a "blended rate" deal that started at 17-21% for 30 months then reduced to lower rates after that time. They advertised these loans at lower rates because they were "blended"...And the premiums for insurance on these deals were HUGE income for the branches!!!
Stay tuned, there is more. Customers have the "choice" of having a prepayment penalty on their first or second mortgage loans. The choice is whether to pay an additional 1/2 in APR to do it without! And they don't allow customers to refinance for lower rates without taking additional cash! Growth is such an important area to them they penalize customers who want to simply refinance at a lower rate, the same rate they may be offering to other customers with the same credit and loan to value ratio!
The Fed has their hands full if they want to dig a little bit more and tap some of the penalty income they can claim from this predatory lender! Regards -- 13 year branch manager
Date: 3/24/04 9:49:26 PM Eastern Standard Time
From: [Ex branch manager]
To: CitiWatch [at] innercitypress.org
As a 13 1/2 year former CitiFinancial employee, I have found your report to be quite accurate. I was an award winning manager who left in January for refusing to let my district manager badger me into his predatory lending ways and bullying style. It was so bad that I left prior to my bonus being paid for last year. My branch made a profit of $750,000 which amounts to a "surplus" of $150,000 over Citi's goal for me. However, since I left prior to February's pay out, they refused to pay it to me. This loss amounts to over $8000...This company is not only a predatory lender but a predatory employer.
As the above -- into which your agency has a duty to inquiry, on this application -- makes clear, CitiFinancials predatory lending is not limited to mortgages. In fact, Citigroups connections with predatory lending are not limited to CitiFinancial, but extend even to Citigroups investment banking business. ICP has previously commented on Citigroups securitization and serving as trustee for questionable subprime mortgage lenders. An even more recent connection is Citigroup's decision to be underwriter and book runner for a major stock offering by Dollar Financial Group, another other things a nationwide check cashier (mostly under the Money Mart brand name), and a payday lender subject to class actions for usury. Dollar settled such a class action in California, in 2001. What standards does Citigroup have for this business? None, apparently. Dollar Financial's books are stored at Citigroup in the Brooklyn Army Terminal, 8th floor of 140 58th Street...
See also, Memphis Commercial Appeal of September 29, 2004: Last week, independent contractors working for CitiBank set up tables just off of the University of Memphis main campus to offer credit card applications to students. Administrators caught wind of the operations, set up near parking lots north and south of campus, and soon the solicitors were gone... CitiBank uses independent contractors to market its cards on campus
This is taking place in New York (including in The Bronx), and presumably in Texas...
CitiFinancials high-cost lending is being exported. As simply one recent example, the Irish Independent of September 17, 2004, reported on a survey by the Irish Financial Services Regulatory Authority, comparing the costs of borrowing over different terms and is based on the main lenders in the Irish market. The same loan at a variable rate of interest will cost Euro 2,748.60 at the Ulster Bank but only Euro 2,338.40 at Permanent TSB. But it was CitiFinancial, a UK lender operating at the higher risk end of the borrowing market, that charged the highest rates. On a Euro 10,000 variable rate five-year loan, CitiFinancial charged a whopping Euro 6,471 over the life of the loan - Euro 4,420 more than the total credit charged by Tesco.
Note that Citigroup's new purchase on Puerto Rico, a subprime lender, is named "Easy Money." It comes with six offices, to add to the six branches CitiFinancial is already running on the Island. CitiFinancial plans to open three more this year, and ten in 2005. But with what standards? ICP attended the most recent Citigroup annual general meeting, and asked just this. Citigroup chairman Sandy Weill asked COO Robert Willumstad to answer; Mr. Willumstad claimed that we have retooled to the standards of our critics," then stated without equivocation that CitiFinancial has the same practices outside the U.S. as within. It is imperative that your agency inquire into this public statement by a top-three executive of Citigroup, on an issue at the cusp of predatory lending and globalization, as both a consumer protection and a managerial resources issue.
See also, Business Week Online of September 24, 2004:
On Aug. 18, the British Financial Services
Authority launched a formal investigation into the London bond coup. And Citi -- though it
won't say who authorized the trades -- apologized for what had happened and promised not
to repeat the behavior. "This is exactly what Chuck Prince said wasn't going to
happen," says Howard K. Mason, senior financial analyst with Sanford C. Bernstein
BANNED IN JAPAN. Within weeks, Citi was back in the news. On Sept. 17, Japanese authorities ordered it to shut down its local private bank by next September. Regulators said an investigation, begun in August, 2001, had revealed extensive legal violations over seven years, including lax governance and money laundering controls and "numerous instances of unfair transactions...in which large profits were obtained through unsound means."
Citi issued an apology, "with deep regret for its failure to comply with regulatory requirements," fired six bankers, slashed the salaries of eight other employees, and promised to improve its internal controls for all of Citi's operations in the country. Before the week was up, Japan's Finance Ministry banned Citi from participating in its government bond auctions.
Now BusinessWeek has learned that top Citi officials are among those the Securities & Exchange Commission and the National Association of Securities Dealers are investigating for failing to supervise analysts and investment bankers during the tech-stock boom -- and thus prevent conflicts of interest that harmed investors. The investigation follows the April, 2003, $1.4 billion global settlement between federal and state securities regulators and 10 Wall Street firms. Administrative charges could be brought within weeks, a source close to the matter says, but most likely before yearend. Citi declined to comment. Prince declined to be interviewed.
And see, UPI of September 22, 2004:
Merrill Lynch downgraded Citigroup to a "neutral" rating, saying the Japanese situation could have a wide-ranging impact on Citigroup globally. Moody's affirmed Citigroup's credit ratings, but warned that "maintenance of a conservative, ethical and prudential culture and avoidance of serious regulatory infractions remain important challenges for Citigroup" to achieve upgrades in the future.
Even beyond the redlining and predatory lending issues timely raised above, Citigroup should be required to actually meet these important challenges, and not just talk about them, before imposing its practices on yet more consumers. For all of the above-stated reasons, ICP timely requests public evidentiary hearing, and that Citigroups applications be denied. If you have any questions, please immediately telephone the undersigned, at (718) 716-3540.
Matthew Lee, Esq., Executive Director
Inner City Press/Fair Finance Watch
This Report will be updated with Citigroup's response(s) on the issues presented. Until then, for or with more information, contact us.
May 27, 2004 update: vindicating many of ICP's assertions, on May 27, 2004, the Federal Reserve announced a cease-and-desist order against CitiFinancial, for predatory lending and for what the Fed refers to as "misleading examiners" -- basically, as documented by ICP in real time throughout the Web site, Citigroup told employees to lie, threatened to sue whistleblowing employees, and tried to hide and shred documents. Click here for the Fed's 5/27/04 press release, click here for a PDF of the Fed's 14 page order; click here for ICP's current CitiWatch report (the May 27, 2004 Update describes how the world's biggest bank is still run by predatory lenders, document shredders, silencers of whistleblowers....For or with more information, contact us.
Updated December 1, 2003
[ICP's Dec. 1, 2003, comments to 25 state regulators re/v. Citi-WaMu Finance, continued; see also, "ICP Challenges Citigroup Buy in 25 U.S. States: Citigroup / Washington Mutual," by Gary Silverman, Financial Times, December 2, 2003]
We will first consider CitiFinancial, then WaMu Finance, in support of the requests made herein (for documents, for denial of Citi's applications and for investigation of CitiFinancial). ICP has been receiving more and more troubling complaints about CitiFinancial's practices, from inside the company. Some are attached hereto as exhibits, for your agency to inquire into -- including into whether similar practices and complaints exist in your state -- and to take action on. ICP received the following letter, from an employee:
As a long-time employee of CitiFinancial, formerly Commercial Credit, I can personally testify that while CitiFinancial appears to be [getting] in compliance with the Federal Trade Commission, it couldn't be further from the truth. CitiFinancial's claims that the bad rap came from Associates [First Capital Corp.] is a bunch of BS. CitiFinancial continues to target subprime borrowers charging ridiculous rates, as high was 34% (even on "Excellent" risks). They are still flipping or RBO-ing loans... Home Office mails out 'pre-approved' loan vouchers that aren't really pre-approved and bank drafts at lower APRs than what we offer in a branch and then proceed to solicit these unknowing souls and all they did was deposit a check in their bank account! Now to the biggie, retail sales accounts. Once that account is in a branch, the customer better move, change their phone number to non-published and possibly change their name because we are going to call them, mail them, call them again etc. etc. etc.. Flipping a sales account to a personal or equity counts big on ROCOpoly (if you get all of the Quik Plan points, a gain, minimum $ per K and so on)...
From its debriefing of current and former CitiFinancial employees, ICP can translate: in the above, "RBO" means "refinance balance only," that is, flipping. The above-quoted whistleblower provided ICP with a copy of a CitiFinancial memo to branch managers, from 2003 (that is, after Citigroup's predatory lending settlement with the Federal Trade Commission was announced), stating that
You may or may not have noticed that your personal loan credit authority has been reduced to $5,000... Any personal loan where the credit approval exceeds your authority you are to refer to me for approval. The purpose is to stimulate Equity Plus business. Do not send an application where the customer is a homeowner to home office credit for approval. I want to review those applications myself. Make sure your staff understands. If the customer qualifies for an equity plus loan I should see notes reflecting their conversation on the sale of that product. If I do not see, the loan will not be approved until the employee has made a sales presentation to the customer for a larger loan paying off debt and building the loan to an equity plus basis... I expect and will inspect for compliance...
This means that CitiFinancial blatantly seeks to get a lien against an applicant's home, even if the applicant states that he or she only wants a smaller, unsecured loan. Also attached are exhibits are a number of CitiFinancial training documents, showing among other things the ROCOpoly bonuses paid for (forced-placed) insurance sales, scripts to use to convince or deceive customers into accepting high-cost credit insurance, including a script of what to say when the customer says "no." Also annexed hereto are sample WaMu Finance documents, showing loans at interest rates up to 40%. The Seattle Times of November 25, 2003, at C1, "Washington Mutual Selling Controversial Loan Subsidiary," reported that "[t]he predatory-lending allegations dogged WaMu as it expanded into new markets. In New York City, for example, activists called for the bank to revamp its business practices before taking over Dime Savings," see <http://seattletimes.nwsource.com/html/businesstechnology/2001800286_wamu25.html> and <www.innercitypress.org/dime.html>, incorporated herein by reference.
While most of CitiFinancial's (and WaMu Finance's) lending is not reported under the Home Mortgage Disclosure Act (HMDA), from what Citi data is available, ICP contends that Citi disproportionately excludes African Americans and Latinos from its normal / prime rate lending, while targeting them with high-cost credit. For example, in the New York City Metropolitan Statistical Area (MSA) in 2002, for conventional home purchase loans, Citibank (Citibank, N.A. and CitiMortgage together) denied loan applications from African Americans 4.67 times more frequently than applications from whites. Citibank denied Latinos 3.17 times more frequently than whites. This is much worse than other lenders in this MSA: the denial rate disparities for the industry as a whole in 2002 were 1.89 for African Americans, and 1.68 for Latinos. In 2002 in this MSA, Citibank made 3607 conventional home purchase loans to whites, only 390 to African Americans, and 458 to Latinos. The aggregate industry in this MSA in 2002 made 6567 such loans to African Americans, 6365 to Latinos, and 34,336 to whites. For these three groups, the aggregate made 13.87% of its loans to African Americans, and 13.47% to Latinos. For Citibank, the figures were lower: 8.7% of loans to African Americans, and 10.3% to Latinos. Citibank's higher-than-aggregate denial rate disparities are not explained by any greater-than-normal outreach with normal-priced credit to African Americans or Latinos. Rather, Citibank redlines -- while CitiFinancial engages in reverse redlining, targeting protected classes with subprime loans which ICP contends are predatory.
Citigroup is aware of, but has not addressed, the concerns that ICP has raised. See, e.g., the Wall Street Journal of July 19, 2002, "Efforts by Citigroup to Reform Subprime Unit Raise Questions," by Paul Beckett, quoting the undersigned "executive director of the Fair Finance Watch project at Inner City Press. 'Citigroup has not lived up to the subprime lending reforms it announced after acquiring Associates.'" See also, American Banker of Dec. 1, 2003, at pg. 4. The attached, and other documents in the possession of ICP, show the continued incentivization of predatory lending; when ICP raised to Citigroup the threats being made against whistleblowers at CitiFinancial, nothing was done to modify the gag orders; the threats in fact increased. As noted, and further specified below, this letter is also a formal request for records reflecting consumer complaints against CitiFinancial and/or WaMu Finance. Here is a sample complaint, made to the North Carolina Attorney General's office after the FTC-Citigroup announcement (and obtained by ICP under the freedom of information laws):
I entered into a contract with Furniture Warehouse... CitiFinancial is the financier for Furniture Warehouse. Under the section entitled "Special Financing," it states that if the contract is paid within 360 days of the contract, there will be no finance charge. It was represented to me by Furniture Warehouse that the agreement involved no interest for one year. [Within a year of the purchase, I made the lump sum payment.] I was then told that the payoff exceeded $500.00. This is when the dispute began... I contacted Ed Mayhew, Manager, CitiFinancial, by mail... At some point, Mayhew called my home, and informed my husband that he was going to sue me. He filed a small claims suit... I appeared at small claims court at the appropriate time, fully prepared to defend my case. Neither Mayhew nor any representative of his office or company had the courtesy to appear... Last year, my credit score was a respectable 719. Now, I am attempting to get a loan, and my financier tells me my score has dropped to 586... As a result the loan has been denied.
Here are some sample complaints consumers have made to the Missouri Attorney General's Office:
Consumer says that after six years of payments, she owes more money than the original purchase price and that she has no equity in the home. Company [CitiFinancial] has threatened foreclosure."
"Consumer purchased a TV from Tex and financed through Company [CitiFinancial]. Total bill came to $1252.00 and she stated that she made six or seven payments and she should only owe $700, Company is stating that she owes $1,000."
"Company [CitiFinancial] has reported consumer late even though consumer has provided copies of cancelled checks as proof of payment."
"Company [CitiFinancial] is calling the consumer and harassing them about their account, sometimes five times a month. Checks enclosed show that consumer has paid on time."
"Consumer has two loans totaling $54,000 on a home she says is worth $40,500. Consumer wants to make sure this doesnt happen to others."
Here are some other sample complaints ICP has received, which call into question Citi's integration of its acquisitions:
Date: 6/16/03 4:38:08 PM Eastern Daylight Time From: [Name withheld] To: CitiWatch [at] innercitypress.org...
Our mortgage was with Associates and was sold to CitiFinancial. Since then I have become terminally ill and of course my income dropped dramatically, we contacted CitiFinancial to make them aware of the problem I asked to have the house refinanced to get a lower rate and they refused when the mortgage got behind they promised a deferral on the payments and after much paperwork they told us everything was approved and we were ok, then they wrote us approximately 4 to 6 months later saying we were behind again and that the deferral didn't go through, so we tried a deferral again with the same results a few months later, this same cycle has taken place 4 times since 1999 culminating in a phone call today 6/16/2003 notifying us that we are 128 days behind ( by our records we are only approximately 70 days behind ), and because of this they are starting foreclosure proceedings, we tried to refinance the house with another lender in 2000 but CitiFinancial refused to give the other lender a pay-off amount so they said they couldn't help us, we have made repeated attempts to rectify the situation...
And, as simply one more example:
Date: 7/22/03 2:59:54 PM Eastern Daylight Time From: [ ] To: CitiWatch [at] FairFinanceWatch.org
My husband and I had a mortgage for many years with First Nationwide Mortgage which was merged into (bought by) CitiMortgage, Inc. The transition took place last March 2003. What has transpired since that time has become a worse nightmare as each day goes by. To make it short, they have and are violating RESPA, Fair Credit Reporting Act, Fair Credit Collections Act and numerous other federal statutes. Even though our case is being 'handled' by the President of CitiMortgage's office ("presidential investigation", they like to call it), we have received no return phone calls, no written responses to letters, including our "qualified written request" since May 15, 2003. (Today is July 22, 2003.) Our once perfect payment record is now a shambles despite continuing to make on time payments. They have made our payment and credit records a mess and refuse to communicate or to remedy their illegal actions. We cannot even refinance with another lender due to this. We are not interested in class action suits that result in paltry slaps on the wrist of Citigroup and nothing to remedy the damage that is being done to consumers (e.g., Morales, et al)...
Relatedly, ICP has obtained -- and your agency should request, review and act on -- numerous complaints that have been filed with the Federal Trade Commission against Primerica. Here also, for the record, is a complaint directed to ICP earlier this month:
Date: 7/28/03 9:15:40 AM From [name withheld] To: CitiWatch [at] innecitypress.org
No matter where I look on the computer, I see Primerica, Citigroup and Travelers. The word fraud is always attached to their name. If only I had not trusted this Pastor so much, we let our guard down and now we may have to pay a penalty of $50,000.00 just to get out of this mess.
I had a run in with Primerica Financial Services. The insurance agent called himself a financial analyst and showed us mutual funds and some stock. We thought we were talking to a financial planner and this man turned out to be nothing but an insurance agent. One reason why we trusted him so much was that he was referred to us by a Pastor of a church that we used to attend.
We realize that we needed to read the contact, and we did go over it, but we felt that he was being honest with us so that we would be able to use him as our financial advisor. Come to find out he mislead on 3 items:
He did not reveal to us that he was getting commission, we asked him how do you make money? He said when you do. Not true, he did get a commission. Mislead on the cost of the account; mislead as to how much we could remove from the account when it was time to diversify the funds. As of now we are still in a 3% fixed account. Thank God we did not annuitize with this man. When we first met him, he did not say the word annuity. So we thought we were working with a financial planner someone who would help us. He did not call us like he said he would to help us. This account is very unsuitable for us because we are retired now and under the 72T rule and we need income now. I just do not understand how this man could be so dishonest with us, because he was referred to my by my old Pastor.We realize that we rolled our 401K over to Primerica and Travelers but is there any way that we can get out without paying a penalty? ... He did introduce himself as a financial analyst....
For more on Primerica (and on Citigroup's ongoing predatory lending in the U.S.), we are hereby directing your agency to, and incorporating into the record by reference, the recent study of Citigroup's predatory lending at www.southernstudies.org/reports/bankingonmisery.pdf, which includes some (but not all) of ICP's CitiFinancial investigative work. Your agency should forthwith require Citigroup to publicly answer questions concerning the matters raised herein.
Citigroup is also, through its investment bank, deeply involved in questionable subprime lending. For example, Salomon Brothers Realty Corp. has provided warehouse lines of credit of $775 million to subprime lender New Century, requiring New Century either to securitize $1 billion of loans through Salomon Smith Barney as sole underwriter, or, in the alternative, to sell $1 billion in loans to Salomon Brothers Mortgage Securities VII for their own securitization. As simply another example, Salomon Smith Barney has been the underwriter for the subprime mortgage backed securities issuances of Centex Home Equity. Citigroup and SSB pulled out the stops in lobbying against a New York City ordinance that would have required them to certify they were not involved in predatory lending (see, e.g., Crain's New York Business of March 2, 2003); Citigroup has previously sought "confidential treatment" for even the names of the subprime lenders with which it does business. What standards do SSB and Citigroup have for working with subprime lenders? Apparently none. Citigroup seeks to export predatory lending: soon after buying Banamex, Citigroup formed what it called a "Consumer Products Unit For Emerging Markets," saying that "the new unit would accelerate the expansion of non-banking consumer financial services into the emerging markets" (Business Wire, May 29, 2002). Charging interest rates up to 40%, CitiFinancial in early 2003 opened nine offices in Brazil, projecting that it would open 100 more branches over the next five years (Latin Trade, July 2003). CitiFinancial has opened in South Korea, charging interest rates of thirty percent. "Although these rates are higher than the annual 24 percent charged by credit card companies for similar cash advances, CitiFinancial has an edge in that their loans are cheaper than those extended by existing loan sharks... Another reason that people are drawn to the company is because of the renowned brand of its parent group, Citigroup. Customers thus tend to think the company will refrain from excessively aggressive collecting methods" (Korea Herald, July 30, 2002).
The trust that Citigroup would eschew excessively aggressive collection practices, particularly overseas, would be misplaced. See, e.g., the Asian Wall Street Journal of May 25, 1999, "Paid Back: Citibank in India Has Hired Collectors Said to Use Threats." In any event, managerial resources issues to be considered at the requested hearings are raised not only by Citigroup's focus on exporting predatory lending, but also by the other scandals Citigroup is embroiled in -- mutual fund, market timing, human rights and money laundering (see, e.g., "Citibank CEO Docked for Money Laundering," Vanguard (Lagos, Nigeria) June 19, 2003; Le Soir, Jan. 27, 1997; and the 2001 U.N. report on the traffic in conflict diamonds in the Democratic Republic of Congo: "Report Names Culprits in Central Africa's Dirty War," Environment News Service, April 19, 2001).
Troubling issues also exist as to WaMu Finance -- for the record, ICP began raising such issues well before this proposal, see, e.g., the American Banker newspaper of October 21, 2001, "Group Protests Deal," noting "a $73 million jury verdict in July against another unit, Washington Mutual Finance Group. The Seattle Post-Intelligencer of October 16, 2003, reported that ICP "accused Washington Mutual of predatory lending to minorities through its subprime lending subsidiaries;" see also, the Seattle Times of November 25, 2003, "Washington Mutual Selling Controversial Loan Subsidiary," quoted above; see also, American Banker of Dec. 1, 2003, at pg. 4. Annexed hereto are loan and insurance documents from sample Washington Mutual Finance Group loans, with interest rates as high as 38.78%. For example:
To finance $1,142.09 at Washington Mutual Finance Group in 2001, a customer was charged $810.07 in finance charges, for an Annual Percentage Rate ("APR") of 38.57%. This loan includes Single Credit Life and Single Credit Disability.
To finance $1,420.81 at Washington Mutual Finance Group in 2000, a customer was charged $661.69 in finance charges, for an APR of 38.78%. This loan includes Single Credit Life and Single Credit Disability.
See also, the National Law Journal of July 9, 2001, page B7:
THE LOAN OFFICERS at the Greenwood, Miss., office of Washington Mutual Finance Group, the subprime consumer lending branch of Washington Mutual Savings Bank, were convincing customers to refinance loans at a rate nearly seven times higher than other loan offices in the state... In early 1998, 23 of these customers sued Washington Mutual Finance, charging fraud and breach of fiduciary duty. The plaintiffs contended that the loan officers were "fraudulently inducing" the refinancing so they could increase the interest payments. The plaintiffs testified at trial "that they weren't allowed to see the paper they were signing; they were just told to sign here, or sign there"... on June 13, a Lexington, Miss., jury awarded the plaintiffs $ 69 million in punitives and $ 2.27 million in compensatories. Post-trial motions are pending.
Washington Mutual has variously tried to characterize this case; we note, quote and link to "Lender Hit with $71M Verdict Lawsuit Accused Washington Mutual of Flipping Loans," Clarion Ledger of June 14, 2001, <www.clarionledger.com/news/0106/14/a3.html>, "'Flipping simply means that they enticed people back into the office to renew loans once they had paid down on a certain amount because it is very profitable for them to renew loans rather than allowing them to pay it out... The companies that were issuing the insurance appeared to be disassociated with City Finance, but in fact, the agreement between these companies and City Finance allowed City Finance to retain a substantial proportion of those premium payments'" -- similar to Citigroup's current practices. See also, <www.verdictsearch.com/news/specials/0204verdicts_baker.jsp>, reporting that "[s]imilar claims by several hundred other Washington Mutual customers are pending." This should be inquired into, including at the public hearings ICP is requesting.
We are concerned that Citigroup has a history of buying influence, not only through political campaign contributions, but also by hiring ex-regulators. For example, CitiFinancial's new director of regulatory relation, Mary Louise Preis, was until quite recently the Commissioner of Financial Regulation in Maryland: your peer. In fact, when ICP commented earlier this year concerning Household International, it was Ms. Preis who responded (see attached). Now she represents CitiFinancial, and is presumably a liaison to your office (for example, Ms. Preis blast-faxed consumer organizations including ICP a two page letter, presenting this proposed acquisition as a fait accompli).
We are concerned by, and would oppose, attempts to make the operations of CitiFinancial and WaMu Finance more opaque than they already are, either by not requiring an application, subject to public comment, in connection with a proposal of this magnitude, or by denying access to the requested complaint information. See, e.g., "Lawsuit Challenges Delaware Records Law: Nonresidents Denied Use of Freedom of Information Act," by Mary Allen, Wilmington News-Journal, November 27, 2003, <www.delawareonline.com/newsjournal/local/2003/11/27lawsuitchalleng.html>.
Our request also includes all records reflecting complaints submitted to your agency in the past three years concerning CitiFinancial or its affiliates and/or WaMu Finance [etc.] If you have any questions, please immediately telephone the undersigned, at (718) 716-3540. Thank you.
Matthew Lee, Esq.
This Report will be updated with Citigroup's response(s) on the issues presented. Until then, for or with more information, contact us.
Copyright 2004 Inner City Press/Community on the Move, Inc.. All rights reserved. Permission granted to reproduce for educational or informational purposes, if you let us know, via e-mail, before you do so. For further information, contact: Permissions Coordinator, Legal Administration, Inner City Press, P.O. Box 580188, Mount Carmel Station, Bronx, NY 10458. Phone: (718) 716-3540. Fax: (718) 716-3161. E-mail: CitiWatch [at] innercitypress.org