New York Citi issued the following statement today on the agreement it has reached with the Bureau of Consumer Financial Protection to resolve previously disclosed issues with APR rate re-evaluations as required by Regulation Z of the CARD Act. Citi reported this matter to the Bureau in early 2017 and publicly disclosed it in February 2018.
"Citi is pleased to have resolved the matter with the Bureau, and we reiterate our sincere apologies to our customers for not correcting these issues sooner.
"Since 2011, as required by Regulation Z under the CARD Act, Citi has semi-annually reviewed U.S. credit card accounts that experienced an interest rate increase to identify those eligible for a rate reduction. These reviews have resulted in more than $3 billion in savings through interest rate reductions for customers to date.
"While Citi believed its methodology was sound, a periodic internal review identified potential flaws affecting some credit card accounts. Citi promptly informed its regulators, revised its methodology going forward and conducted a comprehensive review, which found no evidence of employee misconduct.
"To identify customers who were financially impacted, Citi re-examined accounts eligible for a rate reduction since the requirements came into effect. Citi estimates that about 90 percent of the interest rate savings due to customers were delivered as required. Citi is currently issuing refunds for the remainder to 1.75 million credit card accounts. Refunds, which will average $190, will continue over several months and be largely completed by year-end.
“As Citi’s 10-K filed in February states, Citi is fully reserved for the cost of the remediation.”