CitiFinancial has agreed to pay $1.25 million to Massachusetts and 34 other states for failing to report more than 90,000 residential mortgage loans it made to the federal government as required by law.
The agreement comes after the Massachusetts Division of Banks completed an examination to determine compliance with state and federal consumer protection laws. The division found that CitiFinancial failed to report 91,127 mortgage loans that were originated between 2004 and 2007.
Financial institutions are required to provide such information as part of the Home Mortgage Disclosure Act (HMDA).
"HMDA remains the primary tool we utilize to ensure compliance with fair lending laws and regulations. By failing to accurately report all required transactions, CitiFinancial hampered our ability to complete that assessment," said Massachusetts Banking Commissioner Steven L. Antonakes. "Therefore, today’s agreement will ensure that the systems, training, and appropriate oversight and controls are in place to avoid a similar occurrence in the future."
As part of the agreement, CitiFinancial resubmitted HMDA reports to the Federal Reserve system for the years 2004â€2007 and hired an independent consultant to conduct a thorough fair lending review to ensure the data from the previously unreported 91,127 mortgage transactions does not demonstrate a pattern or practice of discriminatory lending practices.
In addition, CitiFinancial will also thoroughly review and substantially modify its internal control procedures to ensure all reportable HMDA transactions are accurately compiled and reported.
