Citi's Anti-Armenian Discrimination Foreshadows the Danger of Financial AI

Plus, the folly of the superapp.

Number of the Week: 57% (explanation below)

Citi's Anti-Armenian Discrimination Foreshadows the Danger of Financial AI

FIN readers may have encountered this week an unusual financial story: The Consumer Financial Protection Bureau (CFPB) charged Citi with “intentionally and illegally discriminating” against Armenian-Americans. CFPB ordered Citi to pay $25.9 million in fines and consumer redress.

Not to excuse Citi’s actions in any way, but financial fraud controlled by Armenians and Armenian-Americans has been a longstanding issue for many years, particularly in California. The Federal Bureau of Investigation indicted 55 people in 2013 for an identity theft scheme that generated millions in bogus tax refunds. More recently, the government’s Paycheck Protection Program (PPP) loans during the early days of COVID became the focus of a lot of fraudulent activity, with one Department of Justice case culminating in the sentencing of seven members of a Los Angeles-based $20 million fraud ring. The CFPB order, which cites bank activity as far back as 2015, found that Citi “singled out applicants for certain credit card products, based on their surnames, whom it suspected of being of Armenian descent."

Citi sent FIN a statement: