Massachusetts Governor Announces 35 State Settlement with CitiFinancial

April 8, 2010 — Following an examination by the Massachusetts Division of Banks, it was discovered that CitiFinancial had failed to report 91,127 residential mortgage loans to the federal government, as required by the Home Mortgage Disclosure Act (HMDA).

According to a March 24 media release from Massachusetts Governor, the mortgage loans that were omitted from CitiFinancial's HMDA Loan Application Register were originated between 2004 and 2007. The under-reporting of the mortgage loans was apparently caused by an internal systems error at CitiFinancial that went undetected until the Massachusetts examination.

The agreement includes the following, among other provisions:

  • CitiFinancial already resubmitting corrected and complete HMDA reports to the Federal Reserve System for the years 2004 through 2007;
  • CitiFinancial engaging an independent consultant to conduct a thorough fair-lending review to ensure the data from the previously unreported 91,127 mortgage transactions does not in any way demonstrate a pattern or practice of discriminatory lending practices;
  • CitiFinancial will thoroughly review and substantially modify its internal control procedures to ensure all reportable HMDA transactions are accurately compiled and reported; and
  • CitiFinancial will remit a penalty totaling $1.25 million to the 35 states that are party to this agreement.

To read more and view the 35 states included in the settlement, follow this link to the Massachusetts Governor's release.