Citigroup may be taken to court over claims that it is systematically discriminating against people of “the wrong race,” according to a lawsuit filed in federal court this week.
Accusations Fly
One of America’s largest multinational banking services, Citigroup Inc. has been accused of racial discrimination against white people. Now, a lawsuit will get to the heart of the matter.
Consovoy McCarthy Representing
Conservative law firm Consovoy McCarthy is representing the plaintiffs, who want to take the matter to court, over claims that Citi is waiving ATM fees for customers of minority-owned financial institutions.
Issues With ATM Fees
The Florida-based plaintiffs, who are not Citigroup customers, claimed they were charged out-of-network fees while using Citibank ATMs.
Discrimination Against “Non-Minorities”
They accused the lender of only charging fees to customers who held accounts with non-minority owner financial institutions, which could make it an act of racial discrimination against “non-minorities,” aka white Americans.
Fort Lauderdale Filing
The racial bias lawsuit was filed in Fort Lauderdale on Friday, and plaintiffs are seeking class-action status for the case as well as eventual compensatory damages.
“People of the Wrong Race”
“Citi intentionally discriminated against plaintiffs and those similarly situated for banking with financial institutions owned by people of the wrong race,” the attorney statement for the case read.
A Legal Violation
According to the lawsuit, these ATM fee waiver policies violate both federal and state laws and have been in action at Citigroup ATMs since July 2016.
Citigroup Reviewing the Claim
Now, Citigroup has provided an email statement on the case, with intentions to review the lawsuit claims. “Citi intentionally discriminated against plaintiffs and those similarly situated for banking with financial institutions owned by people of the wrong race,” it told reporters.
ATM Community Network
The policy in question refers to the Citi ATM Community Network, in action since 2016, which waives surcharge fees for all Citibank transactions made by members of the network.
Who is Eligible
Participating members of the network include various community banks and minority-owned financial institutions, and the waiver also applies to out-of-network fees in various major US cities.
Breaking Down Barriers
The Citigroup official website describes the Community Network as an initiative to “alleviate one of the biggest barriers to banking,” for underserved and minority communities.
“Communities of Color Lack Access”
“Many communities of color lack access to traditional banking services that are the foundation of financial stability and thriving communities,” the website reads. “Economic security is also hampered by insufficient access to credit, which makes it hard to qualify for affordable mortgages and small business loans.”
Removing Fees for Half a Million
According to the website, the ATM Community Network has removed fees for 440,000 customers across 28 financial institutions, made up of “minority-owned banks and community development credit unions.”
Average Fees
The average fee for an out-of-network transaction with Citibank is typically set at $2.50 per withdrawal, but research shows that the average combined cost for these transactions is actually $4.66.
Up-And-Coming Firm
Consovoy McCarthy, the law firm representing the plaintiffs, has gained significant attention in recent years for defending hot-button issues, such as a challenge against affirmative action in college institutions, representing the conservative activist group Students for Fair Admissions.
A North Dakota Case
Earlier this year they took a case to the Supreme Court representing a North Dakota truck stop that wanted to challenge customer fees for every minor debit card transaction.
More Problems for Citigroup
Citigroup, on the other hand, has also been in the legal hot seat for similar issues recently. In November last year, the banking group was fined $25.9 million by the Consumer Financial Protection Bureau for intentionally discriminating against Armenian Americans.
Discrimination Against Armenian-Americans
According to the lawsuit, Citi had denied the credit card applications of a number of Americans of Armenian descent based on their surnames, as well as the applications of many people based in Glendale, California, which has one of the largest Armenian-American populations in the country.
Armenian Fraud Rings
Though Citigroup did not confirm or deny the claims, they agreed to fulfill the court order, and later claimed that the rejections had been a strategy to defend against “Armenian fraud rings,”
“Inpermissable Actions”
“Regrettably, in trying to thwart a well-documented Armenian fraud ring operating in certain parts of California, a few employees took impermissible actions,” the bank said in an email statement.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
