• As an industry leader, Citigroup’s CitiFinancial takes very seriously the special responsibility it has within the consumer finance industry to set an example of excellence in the way it conducts its business.
  
  
• Subprime lending is simply another name for loans made by consumer finance companies to borrowers who do not have prime-quality credit histories.
  
  
• Since 2000, CitiFinancial has been engaged in implementing initiatives and policy enhancements in the United States. Among our many actions:
  
  
  • We substantially reduced origination points and discontinued the requirement for mandatory arbitration provisions in real estate-secured loans made at our network branches.
    
    
  • We created a trio of mortgage borrowing opportunities to help subprime borrowers lower their cost of credit as their credit profiles improve: (1) the Preferred Fixed Rate mortgage loan product offers highly qualified borrowers a mortgage at a rate comparable to Citigroup’s prime channels; (2) the Rate Reduction Plan rewards borrowers who consistently pay on time with a lower interest rate for the remaining life of their loans; and (3) the Graduation Loan offers borrowers whose credit improves of the chance to apply for a prime interest rate mortgage loan.
    
    
  • We limited prepayment penalties on real estate-secured loans in both length of time and amount and also gave customers a choice of a loan with standard pricing with a penalty or a loan at a slightly higher rate without a penalty.
    
    
  • We expanded our initiatives to include improved credit insurance sales practices throughout our branch network—an Initiative we call “Customer First” – which ensures that all customers understand their loan terms and make informed choices about any optional products they purchase.