Citibank NA agreed on Monday to pay $4.2 million to settle claims by five states that it failed to recalculate credit card interest rates on accounts held by 25,000 consumers, thus overcharging them.
Citi had disclosed the issue in 2018 and paid $335 million to reimburse consumers in a settlement with the U.S. Consumer Financial Protection Bureau. While that settlement compensated consumers nationwide, the new settlement with attorneys general in Iowa, Massachusetts, New Jersey, North Carolina and Pennsylvania provides additional compensation for customers in those states for the loss of access to those funds between 2011 and 2017.
While the 2018 settlement resolved claims under federal law, Monday’s deal resolves claims under the states’ respective consumer protection laws, which Citi denied violating. Citi spokeswoman Jennifer Bombardier said the bank is pleased to put the matter behind it.
Attorneys General Tom Miller of Iowa, Maura Healey of Massachusetts, Gurbir Grewal of New Jersey, Josh Stein of North Carolina and Josh Shapiro of Pennsylvania, all Democrats, announced the settlement.
“When banks step out of line, we will hold them accountable,” Shapiro said.
The bank had disclosed in 2018 that it found an error in the way that it periodically revisited increases in credit card interest rates as required by the Credit Card Accountability Responsibility and Disclosure Act. The resulting settlement with the CFPB sent refunds to 1.75 million credit card holders.
Under the state settlement, the bank will pay $4.2 million to an administrator, which will dole out $1.13 million to consumers in New Jersey, $1.1 million to Pennsylvania, $895,000 to Massachusetts, $683,000 to North Carolina and $216,000 to Iowa.
For Citibank: General Counsel Richard Carroll
For the states: Patrick Madigan of the Iowa Attorney General’s Office, Peter Downing of the Office of the Massachusetts Attorney General, Patricia Schiripo of the New Jersey Office of the Attorney General, Daniel Mosteller of the North Carolina Department of Justice, Nicholas Smyth, Office of Pennsylvania Attorney General.
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