Citigroup to refund $335 million to credit card customers

SHARE Citigroup to refund $335 million to credit card customers
ap18180611022079_e1530295432174.jpg

Citigroup said it plans to refund $335 million to a group of customers who may have been overpaying interest on their credit cards. | AP file photo

NEW YORK — Citigroup said Friday it plans to refund $335 million to a group of customers who may have been overpaying interest on their credit cards.

In a settlement with the Consumer Financial Protection Bureau, Citi will refund 1.75 million customers in overpaid interest by the end of the year.

Earlier this year, Citi disclosed that it had used a flawed methodology in determining whether credit card customers were eligible for an interest-rate reduction on their cards, as required by the CARD Act, a federal law that governs the credit card industry.

Citi disclosed the flaw to regulators, including the CFPB, in 2017. The CFPB chose not to fine Citi for the flawed practice, citing the bank’s decision to self-report the problem to regulators and that it was in the process of refunding customers. Citi had already set aside the funds to cover the refund in a regulatory filing earlier this year.

This is the third enforcement action that the CFPB has taken under Mick Mulvaney, President Donald Trump’s budget director and current acting director of the bureau. The bureau has slowed its enforcement work under Mulvaney compared to Richard Cordray, President Barack Obama’s CFPB director who left the bureau last year.

The first was against Wells Fargo, which was fined a combined $1 billion fine for poor mortgage and auto lending practices, and the second was against a debt collector called Security Group.

Friday’s settlement with Citigroup is the first time the CFPB has recovered money for consumers under Mulvaney.

RELATED

Illinois among states with highest credit card debt

Consumer debt still No. 1 source of complaints

When to ignore credit card advice

The Latest
Packer’s broadcasting career coincided with the growth of college basketball. He worked as analyst or color commentator on every Final Four from 1975 to 2008.
Stephanie Swieca and Emma Magrady are on a quest to visit all of Illinois’ state parks, then share their experiences, including the tangential visits around the parks.
The Food and Drug Administration released a proposal Friday to do away with the current three-month abstinence requirement for donations from men who have sex with men.