L.A. investigating banking discrimination complaints against Armenians
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The Los Angeles Civil Rights Department is investigating claims that big banks are continuing to show bias against Armenian customers.
Two years ago, Citibank agreed to pay $25.9 million to settle federal claims that it discriminated against customers with Armenian surnames. But the Los Angeles Civil Rights Department says the problem has persisted at several national banks with operations in the Los Angeles area.
That has prompted the department to reach out to members of the region’s large Armenian community who think they have suffered discrimination so the cases can be investigated for possible civil prosecution by the department, the city attorney’s office and the state attorney general.
“We know that discriminatory practices, particularly with banking, have been a challenge for many communities when you think about African Americans, Latinos, women and disabled populations and others,” said attorney Capri Maddox, executive director of the department, also known as LA Civil Rights. “We initiated this call for complaints because we knew we had some folks come forward to tell our investigators that this was a problem.”
A class-action lawsuit seeks to punish Citibank for arbitrarily denying the applications and closing the accounts of people with Armenian-sounding last names under the aegis of fraud prevention.
In the Citibank case, the Consumer Financial Protection Bureau alleged that a bank unit that issued store-branded credit cards for Home Depot, Best Buy and other retailers discriminated against applicants whose surnames ended with “ian” or “yan” — particularly those who lived in and near Glendale, suspecting they would be more likely to commit fraud.
Applicants were turned down, approved for credit on less favorable terms or subject to account freezes and closures. Some employees referred to them as “Armenian bad guys” or the “Southern California Armenian Mafia.” Citigroup did not admit or deny wrongdoing but said that in trying to thwart a well-documented Armenian fraud ring, a few employees took “impermissible actions.”
Maddox said that despite Citibank’s November 2023 consent order, the department has received complaints from Armenian Americans of continued discrimination at the hands of multiple large retail banks operating in the Los Angeles area, such as abrupt and unexplained account closures. The department did not identify the banks.
It enforces the Los Angeles Civil and Human Rights Ordinance, but the maximum penalty under the law is $250,000. The department is working with the city attorney’s office, which enforces the California Business and Professions Code, violations of which can lead to multimillion-dollar fines. It also could refer cases to the state attorney general.
The Armenian Bar Assn. is working with the department to publicize the issue and gather cases. Lucy Varpetian, the group’s chairperson, said that the association’s outreach through its membership and Armenian media contacts is essential.
“Most of the time, when you have an immigrant group, they think that either the government isn’t going to take them seriously, or they aren’t going to be heard. It’s just a big bureaucracy,” said Varpetian, a city of Glendale attorney. “Our goal is to make sure that the community understands that it’s trustworthy, that this is something that you should participate in.”
In January 2024, Rohit Chopra, then chief of the CFPB, spoke about the issue at the group’s annual meeting in Glendale, she said.
The CFPB has dropped a lawsuit accusing Zelle and its bank backers of failing to clamp down on fraud. It’s Trump administration’s latest move to drop enforcement actions.
Chopra was recently fired by President Trump and replaced by acting chief Russell Vought, who has reined in the agency, seeking to halt its activity and cut its funding while withdrawing from a number of lawsuits. That includes one that accused Wells Fargo, JPMorgan Chase and Bank of America of allowing unchecked fraud on the Zelle payments app, which the banks denied.
Maddox said she is aware of what she called “the complexities of what’s happening with the federal government at this time,” but said the city retains substantial regulatory authority under the Business and Professions Code, which was exercised against Wells Fargo. The bank paid $50 million for violations of the code in 2016 in the first major settlement arising out of the San Francisco bank’s fake-accounts scandal, which ultimately cost it billions.
Citibank has been the subject of multiple lawsuits since it reached the settlement with the CFPB, including several proposed class-action cases in federal court and mass tort cases in state court involving hundreds of customers. Those lawsuits are still winding their way through the courts, with Citibank seeking to move them to arbitration, which it has succeeded in doing in one federal case.
The bank declined to comment on the litigation.
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