Citibank Agrees To Pay $6.5 Mln Fine On Student Loan Failures


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( – Citibank agreed to pay $6.5 million to settle accusations by the Consumer Financial Protection Bureau that it harmed folks whose pupil loans it serviced, together with by giving misinformation a couple of tax deduction.

The Consumer Financial Protection Bureau or CFPB took motion in opposition to Citibank, N.A. for pupil mortgage servicing failures that harmed debtors. Citibank misled debtors into believing that they weren’t eligible for a invaluable tax deduction on curiosity paid on sure pupil loans. The firm additionally incorrectly charged late charges and added curiosity to the coed mortgage balances of debtors who had been nonetheless in clbad and eligible to defer their mortgage funds.

CFPB famous that Citibank additionally misled shoppers about how a lot they needed to pay of their month-to-month payments and did not disclose required info after denying debtors’ requests to launch mortgage cosigners. The Bureau ordered Citibank to finish these unlawful servicing practices, and to pay $three.75 million in redress to shoppers and a $2.75 million civil cash penalty.

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