Courtesy of Pam Martens
The first thing you need to know about Citibank and its parent, Citigroup, is that they have an extensive rap sheet. (See here). The second thing you need to know is that Citigroup is a serial predator that perpetually promises its regulators that it’s going to reform, but never does.
The third thing you need to know is that Citigroup has made a sap out of the Federal Reserve – not once, but twice. During the last financial crisis of 2007 to 2010, Citigroup somehow induced the Fed to secretly give it $2.5 trillion cumulatively in below-market rate loans for 2-1/2 years to prop up its sinking carcass. Citi got the cheap loans (often at below one-half of one percent) and then went right on charging its struggling credit card customers high double-digit interest rates.
Citi played a major role in creating the financial crisis, according to the official report from the Financial Crisis Inquiry Commission (FCIC). Three of Citigroup’s executives were referred by the FCIC to the Justice Department for potential criminal prosecution but zero criminal action was taken against them.
Today, the Fed has quietly reimbursed Citibank $3.077 billion under its Paycheck Protection Program Liquidity Facility, a program that reimburses banks for the loans they made under the CARES Act PPP program, which are guaranteed by the Small Business Administration. The Fed accepts the PPP loan as collateral and charges the bank a paltry interest on the loan of 0.35 percent.
Is Citigroup using that insanely cheap money to help struggling consumers during the worst economic crisis since the Great Depression? Despite its grand promises to be a beacon of light during the pandemic, customers are spilling their guts to the Consumer Financial Protection Bureau’s complaint database with horror stories of what Citi has put them through during this crisis. (Being able to report abuses by the Wall Street banks in a database shared with the public is one of the reasons that corporate-friendly Republicans in Congress are trying to kill the CFPB’s independence. The Trump administration has thus far gutted its funding and staff and the U.S. Supreme Court just handed down a decision on Monday indicating that the President has the power to fire its Director without cause.)
We perused the database yesterday. Citibank had 452 complaints in just the month of June. Assuming that a small fraction of consumers know that the CFPB complaint database exists and will take the time to file a complaint, 452 complaints in a 30-day period strongly suggests a very large pattern and practice of abuse at Citibank. (Not to mention the rap sheet we linked to above.)
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