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WASHINGTON, DC, November 19, 2020 – Jenner & Block Partner and firm Chair Thomas J. Perrelli has released the 13th and final report as independent monitor to determine Citigroup Inc.’s (Citi’s) compliance with consumer relief obligations, valued at $2.5 billion, as part of its 2014 settlement with the US Department of Justice (DOJ) and five states: California, Delaware, Illinois, Massachusetts, and New York.
The settlement resolved possible federal and state claims for violations of law regarding the packaging, marketing, sale, structuring, arrangement, and issuance of residential mortgage-backed securities and collateralized debt obligations between 2006 and 2007. In addition to $4.5 billion in civil penalties and payments to states, the settlement required Citi to provide $2.5 billion in the form of consumer relief. The DOJ appointed Mr. Perrelli to determine whether Citi satisfied these obligations.
The report provides an update on, and final tally of, the credit earned by Citi for consumer relief efforts pursuant to the requirements of the settlement agreement. It also details Citi’s overall consumer relief under the settlement agreement, discusses its compliance with the broader requirements of the agreement, and examines Citi’s consumer relief efforts in response to the 2007-2009 financial crisis.
“I am pleased to confirm that Citi has satisfactorily discharged its obligations under the settlement agreement. While not perfect, the settlement has had real benefits for individuals and communities,” Mr. Perrelli noted. “Among other things, it reduced or extinguished loan balances and lowered interest rates, making tens of thousands of struggling consumers’ overall debt load and monthly payments more manageable. It provided funds that enabled developers to build or rehabilitate thousands of affordable rental housing units, including in communities where such units are in short supply, particularly for families.”
According to the report, Citi has provided sufficient consumer relief to earn the $2.5 billion in consumer relief credit required by the settlement agreement as well as satisfied non-credit requirements related to consumer relief. Including the final $170 million in credit awarded, Citi has exceeded that $2.5 billion by earning $2.55 billion of credit for undertaking more than 63,000 creditable actions, such as reducing borrowers’ mortgage debts, reducing borrowers’ mortgage interest rates, making donations designed to stabilize communities and their housing markets, and financing affordable rental housing.
Citi also has satisfied the consumer relief portions of the settlement through activities such as performing outreach to help consumers understand and apply for consumer relief and complying with the fair lending requirements imposed by the Fair Housing Act and the Equal Credit Opportunity Act.
“I am grateful to the Department of Justice and the settling states for devising an agreement that made this type and level of relief possible and for entrusting me and my team with the responsibility to ensure that the relief became a reality. I am proud that during years of sustained hard work, the dedicated professionals on my team, including our skilled consultants, were able to draw on their experience, wisdom, and integrity to fulfill that responsibility,” Mr. Perrelli said.