A LOAN broker is suing Citibank for discrimination over her Armenian heritage that she claims led to the abrupt closure of her accounts and cards.
Mary Smbatian from Los Angeles is the lead plaintiff in a proposed class-action lawsuit that was filed in California on November 17.
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Despite previously hearing rumors about Citibank abruptly closing the accounts of Armenian Americans in a nearby county, Smbatian was not worried about hers.
However, on February 1, 2022, the residential loan broker who also has an apartment management business was informed that after more than 10 years of being a Citibank customer, her accounts would be closed.
No reason was given, according to Smbatian who had to desperately act to save her money, protect her business, and open new accounts elsewhere, she told the Los Angeles Times.
“This was a mess. This was horrible. This was so depressing,” the mother of five told the news outlet.
“I was so stressed out, I literally started crying.”
On November 7, Citigroup agreed to pay $25.9 million in fines for illegally discriminating against credit-card applicants it identified as Armenian American between 2015 and 2021 following an investigation by the Consumer Financial Protection Bureau.
The investigation centered on Citigroup’s retail services such as co-brand credit card partnerships with businesses like Macy’s and The Home Depot.
According to the agency, employees were ordered not to tell customers the real reasons behind rejections.
From the amount paid, $1.4 million was put aside for victims of discrimination.
CFPB director Rohit Chopra said: “Citi purposefully discriminated against applicants of Armenian descent, primarily on the spelling of their last name.
“Citi stereotyped Armenians as prone to crime and fraud. In reality, Citi illegally fabricated documents to cover up its discrimination.”
The agency alleged that some employees at the bank referred to some applicants as “Armenian bad guys,” or the “Southern California Armenian Mafia.”
As a result, applicants were more likely to be turned down, given credit on worse terms, or have their accounts frozen or closed.
According to the consent order, Citigroup did not admit or deny any of the CFPB’s findings.
In an emailed statement to the LA Times, the group said: “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.”
It added that the finance group has “taken appropriate actions with those directly involved in this matter and we promptly put in place measures to prevent any recurrence of such conduct.”
However, Smbatian’s lawsuit claims that more harm was done than was detailed in the CFPB’s order.
Attorney Tamar Arminak, who filed the lawsuit, told the LA Times: “The fine is actually minuscule compared to the damage done, and it’s very significant from what we are hearing from our clients.
“It really wrecked them.”
The 42-year-old and others who have faced the same treatment from the bank are hoping for compensation for their losses.
The suit alleges a number of incidents against customers due to their heritage such as damage to credit scores, the ramifications of an abrupt account closure, and the loss of access to their funds.
In addition to this, the lawsuit is seeking punitive damages due to “the indignity of discrimination.”
So far, over 100 people have contacted Arminak about joining the lawsuit.
Some clients alleged having checking, savings, and business accounts closed and going months without access to their money while others allegedly had loans frozen and failed to get answers.
“People suffered far more than a Macy’s account not being approved,” the attorney said.
“I don’t think the fine addresses the humiliation involved.”
The U.S. Sun reached out to Citibank who declined to comment on the lawsuit.
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