[Announce] Citigroup California

[announce-admin at comm-org.utoledo.edu]

From: "Alan Fisher" <afisher at ionix.net>

California Groups Dismiss Citigroup Fireworks
(San Francisco, CA) -- July 2, 2002: The California Reinvestment 
Committee (CRC) and other organizations today criticized 
Citigroup’s new community commitment based on its planned 
purchase of California Federal Bank as all flash and no substance.  
July 8 public hearings will be held by the Office of Thrift Supervision 
and Federal Reserve in response to broad community concern that 
Citigroup will continue to treat California as a wealthy but distant 
colony.  

Citigroup has issued a community commitment headlining big 
dollars but with few specifics addressing the needs of low income 
neighborhoods or neighborhoods of color.  Community 
representatives are concerned that Citibank has little interest in 
serving California needs and that the commitment falls far below 
the standard of other banks that have targeted specific community 
needs and marketed to opportunities in neighborhoods of color.  

“In the past, Citibank has treated California communities as 
colonies.  As July 4th approaches, we assert our independence and 
call for local decision-making to reflect California’s diverse 
communities,” said Kevin Stein, Associate Director of CRC.   “The 
commitment sets no goals to meet the needs of all California 
neighborhoods, businesses and families.”

The pattern and practice of Citigroup and its subsidiaries is to target 
low income communities with products that are higher cost and offer 
little access to conventional banking.  For example:
 
•	Citigroup is a major subprime lender that is being sued for 
predatory lending by the Federal Trade Commission.  It has no 
program to ensure all borrowers get the least expensive product.

•	More than one-quarter of Citigroup’s California mortgage 
loans are subprime.  Nearly half of all applications are subprime.
•	Half of Citibank’s small business lending is done through 
high cost credit card products.
•	Citibank’s California branches avoid low income 
neighborhoods.
•	Citigroup dominates the electronic benefit transfer (EBT) of 
government benefits across the country but offers inadequate 
access to these benefits in California counties.	
•	Citibank’s “low cost” checking account is 50% more 
expensive than those at other banks.
•	Despite the acquisition of Banamex and the lowest costs for 
remittances, Citigroup charges market prices for money transfer to 
Mexico.	
	
	“Citigroup is offering us hollow promises that won’t fool 
Californians,” said Alan Fisher, Executive Director of the California 
Reinvestment Committee.  “Citibank steers away from real efforts 
to clean up their subprime lending and fosters separate but unequal 
lending in low income communities.  The commitment has more 
holes in it than does Swiss cheese.”
	
	CRC is a statewide organization of more than 200 nonprofit 
organizations and public agencies working for equal access to 
financial institutions for low income people and people of color.  
CRC has comprehensive community reinvestment agreements with 
major California banks and savings & loans.