Citibank Settlement: Previous Settlements Highlight Access and Transparency Problems
July 14, 2014—Responding to reports of a final settlement between the US government and Citigroup, Inc,Kevin Stein, associate director of the California Reinvestment Coalition, released this statement:
“We commend the Department of Justice and attorneys general for holding Citibank and other institutions accountable for harmful practices. We also acknowledge Citibank for accepting responsibility for wrongdoing and agreeing to begin to provide redress for prior egregious practices.
But we remain concerned that consumer relief provided through this settlement agreement, as well as other similar agreements, will not reach the hardest hit communities most impacted by predatory practices. That is why we have called for more transparency in the implementation of federal programs and settlement agreements, so the public can see which borrowers in which communities are able to access relief under these settlements.
The settlement allows Citibank to meet its obligations by engaging in a number of positive activities that have the potential to aid struggling families and help revitalize communities. While the agreement references the hardest hit communities, we remain concerned that too much discretion is left to Citibank to determine how to meet its obligations under the settlement, and that hard hit communities could be left behind once again. And though the agreement puts in place a respected monitor who will report on Citi’s progress under the agreement, it is not clear that he will be reporting out exactly what forms of relief were provided, where, and to whom.
The agreement attempts to prioritize relief for homeowners facing foreclosure, as it should. Additionally, the agreement provides that Citibank can meet its obligations by providing other forms of relief for communities in addition to loan modifications and refinancing. While we believe support for affordable rental housing and other community revitalization efforts are crucial and support these provisions, we are concerned about possible overlap with Citibank’s existing obligations to serve communities. In other words, relief under this legal settlement should be above and beyond existing community reinvestment obligations and plans that Citibank has.
While details are still emerging, some of the provisions in the settlement could go a long way towards helping homeowners who are struggling to keep their homes. The value of the settlement will depend greatly on whether or not Congress extends the Mortgage Debt Forgiveness Act, and we also believe the bank should immediately halt any pending foreclosures until it can determine if those homeowners would qualify for relief. The success ofthis settlement is also dependent on the strength of the monitoring, and the degree to which Citibank’s implementation of the agreement is transparent to the general public.”