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THE ROLE OF THE FINANCIAL INSTITUTIONS IN ENRON'S COLLAPSE

Australia and New Zealand Bank, Deutsche, and Citigroup

The strong focus by the ACCC on the financial sector has seen the ANZ Bank, Deutsche Bank and Citigroup charged by the CDPP with alleged cartel conduct, relating to the CCA ‘Share Placement Cartel’. A number of CEOs and senior executives were also criminally charged.8 It is alleged that conduct involves cartel arrangements relating to trading in ANZ shares following a $2.5 billion institutional share placement in August 2015. ANZ and each of the individuals are said to be knowingly concerned in some or all of the alleged conduct.9 The case centres on ANZ’s institutional equity placement and the alleged failure to disclose that a significant portion of shares went to two of the three joint lead managers. It is said that the investigation has been conducted for over two years by the regulator. The corporations and individuals are defending the charges.

Although the above highlight the criminalisation of corporate cartels, there have also been a number of recent civil penalties imposed for similar conduct. https://ngm.com.au/cartel-enforcement-australia-case-studies/

 

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ACCESSION NUMBER: 0000950103-18-012385
CONFORMED SUBMISSION TYPE: 424B2
PUBLIC DOCUMENT COUNT: 3
FILED AS OF DATE: 20181024
DATE AS OF CHANGE: 20181024

FILER:

COMPANY DATA:
COMPANY CONFORMED NAME: CITIGROUP INC
CENTRAL INDEX KEY: 0000831001
STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021]
IRS NUMBER: 521568099
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231

FILING VALUES:
FORM TYPE: 424B2
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-216372
FILM NUMBER: 181136311

BUSINESS ADDRESS:
STREET 1: 388 GREENWICH STREET
CITY: NEW YORK
STATE: NY
ZIP: 10013
BUSINESS PHONE: 2125591000

MAIL ADDRESS:
STREET 1: 388 GREENWICH STREET
CITY: NEW YORK
STATE: NY
ZIP: 10013

FORMER COMPANY:
FORMER CONFORMED NAME: TRAVELERS GROUP INC
DATE OF NAME CHANGE: 19950519

FORMER COMPANY:
FORMER CONFORMED NAME: TRAVELERS INC
DATE OF NAME CHANGE: 19940103

FORMER COMPANY:
FORMER CONFORMED NAME: PRIMERICA CORP /NEW/
DATE OF NAME CHANGE: 19920703

FILER:

COMPANY DATA:
COMPANY CONFORMED NAME: Citigroup Global Markets Holdings Inc.
CENTRAL INDEX KEY: 0000200245
STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211]
IRS NUMBER: 112418067
STATE OF INCORPORATION: NY
FISCAL YEAR END: 1231

FILING VALUES:
FORM TYPE: 424B2
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-216372-01
FILM NUMBER: 181136310

BUSINESS ADDRESS:
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STREET 2: 38TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 10013
BUSINESS PHONE: 2128166000

MAIL ADDRESS:
STREET 1: 388 GREENWICH ST
STREET 2: 38TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 10013

FORMER COMPANY:
FORMER CONFORMED NAME: CITIGROUP GLOBAL MARKETS HOLDINGS INC
DATE OF NAME CHANGE: 20030404

FORMER COMPANY:
FORMER CONFORMED NAME: SALOMON SMITH BARNEY HOLDINGS INC
DATE OF NAME CHANGE: 19971128

FORMER COMPANY:
FORMER CONFORMED NAME: SALOMON INC
DATE OF NAME CHANGE: 19920703
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Citigroup Hit With Record U.K. Fine for Incorrect Reporting
Silla Brush, Harry Wilson and Donal Griffin
BloombergNovember 26, 2019

Citigroup Hit With Record U.K. Fine for Incorrect Reporting

(Bloomberg) -- Citigroup Inc. was fined 44 million pounds ($57 million) by the Bank of England for years of inaccurate reporting to regulators about the lender’s capital and liquidity levels.

Applying its largest fine ever, the central bank’s Prudential Regulation Authority said Tuesday that between June 2014 and December 2018, three U.K. units of the Wall Street bank had significant flaws in the systems they used to report financial information to regulators, as well as failings in internal governance. The errors had “material or potentially material impact on the returns,” according to the PRA.

The bank “failed to meet the standards of governance and oversight of regulatory reporting which we expect of a systemically important bank,” Sam Woods, deputy governor for prudential regulation and chief executive officer of the PRA, said in a statement.

The problems occurred at some of the bank’s most important units in the world, including Citigroup Global Markets Ltd., or CGML, which is the hub of the firm’s non-U.S. trading and deal-making operations. The London-based entity had hundreds of billions of dollars of assets at the end of last year, according to a regulatory filing, enough to make it one of Europe’s biggest investment banks on a standalone basis.

According to the PRA, the bank’s units relied heavily on employees in Budapest and Mumbai to prepare the reporting, even though London-based regulatory teams had ultimate responsibility for validating and signing off on the reports. The bank’s own management control assessments said these teams required “very close monitoring.”

Wrong Currencies

Among the problems cited by the PRA: Reports were often prepared manually; there were persistent questions over the quality of the data used; the bank’s systems used the wrong currency for settlement of some positions; and there was a heavy reliance on a single individual in Budapest to handle some of the reports.

Despite the widespread problems, the PRA said the bank had surplus liquidity and met capital requirements at all times.

“Citi has fully remediated the past regulatory reporting issues identified by the PRA, and settled this matter at the earliest possible opportunity,” the New York-based bank said in a statement.

(A previous version of this story corrected the number of Citigroup units that were fined.)

(Adds detail of units involved and Hungary, India staff, starting in fourth paragraph.)

To contact the reporters on this story: Silla Brush in London at sbrush@bloomberg.net;Harry Wilson in London at hwilson57@bloomberg.net;Donal Griffin in London at dgriffin10@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Keith Campbell

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

https://finance.yahoo.com/news/citigroup-fined-57-million-u-112857014.html

 

DEF 14A 1 citi3349731-def14a.htm DEFINITIVE PROXY STATEMENT
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )




Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to §240.14a-12



Citigroup Inc.
(Name of Registrant as Specified In Its Charter)



(Name of Person(s) Filing Proxy Statement, if other than the Registrant)




Payment of Filing Fee (Check the appropriate box):
[X] No fee required.

[ ]

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.


1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:


[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.


1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:



Table of Contents



2018 Citigroup Inc.
Notice of Annual Meeting
and Proxy Statement





April 24, 2018


Annual Meeting Location:
The Great Hall
The Congress Plaza Hotel
520 South Michigan Avenue
Chicago, Illinois 60605
















Table of Contents









Citigroup Inc.
388 Greenwich Street
New York, New York 10013





March 14, 2018



Dear Stockholder:

We cordially invite you to attend Citi’s 2018 Annual Stockholders’ Meeting. The Annual Meeting will be held on Tuesday, April 24, 2018, at 9:00 a.m. in The Great Hall at The Congress Plaza Hotel in Chicago, Illinois. Directions to the Annual Meeting location are provided in the Proxy Statement.

At the Annual Meeting, stockholders will vote on a number of important matters. Please take the time to carefully read each of the proposals described in the Proxy Statement.

Thank you for your support of Citi.


Sincerely,

Michael E. O’Neill
Chairman of the Board









Table of Contents





4




Letter from the Board of Directors to our Stockholders




“We all believe that recruiting and nurturing a diverse workforce is both morally right and good business, and we remain committed to that effort as well.”


In 2017, our management’s hard work and our investors’ patience were rewarded. Citi’s relative total shareholder return (TSR) at December 31, 2017 compared favorably to that of most of the firms in our thirteen-company compensation peer group. Citi’s one-year TSR at 27% ranked us third and our three-year TSR at 41% placed us fifth.

Since the financial crisis, management has been doing double duty: shedding and working down legacy assets in an economically rational manner, and building the Citi of the future by sharpening its focus on clients and simplifying and streamlining its operations. 2017 marked the first year that senior management’s attention could be almost exclusively devoted to the second task, and progress on that front accelerated.

The firm generated nearly $16 billion in net income excluding the impact of tax reform, almost $1 billion more than in 2016. Revenue growth and continued expense discipline resulted in an efficiency ratio of 57.7%, the best among our large U.S. bank peers. Positive operating leverage and margin expansion were achieved by both our Institutional Clients Group and in each region of our Global Consumer Bank. As we committed, we also made solid progress towards our medium and longer-term return targets. Our return on assets (0.84%) and return on tangible common equity (8.1%), both adjusted for the impact of tax reform, improved, though the latter measure in particular was short of the level that management and your directors believe can be achieved. Adjusted earnings per share grew by an impressive 13%, a result of higher operating earnings and a 7% reduction in shares outstanding following a successful Comprehensive Capital Analysis and Review (CCAR) submission. The Federal Reserve Board had no objection to our capital plan and we returned $17.1 billion to our stockholders in the form of common stock repurchases and dividends – an increase of over 60% since 2016. Additionally, no deficiencies or shortcomings were found by either the Federal Reserve Board or the Federal Deposit Insurance Corporation in our 2017 Resolution Plan submission.

Mention must be made of the impact the passage of the Tax Cuts and Jobs Act had on the firm’s 2017 reported results and expected future results. The significant reduction in the U.S. corporate tax rate reduced the value of Citi’s deferred tax assets (DTAs) necessitating a $22.6 billion non-cash charge that halved the carrying value of the firm’s DTAs, the last significant trace of the financial crisis. Since the crisis, the sheer size of Citi’s DTAs and their slow rate of monetization depressed the firm’s return on tangible common equity (ROTCE). All things being equal, the combination of a lower effective tax rate, and therefore higher net income, along with the $22.6 billion reduction in our tangible common equity is expected to drive a material improvement in returns. Management estimates that the increase in ROTCE as a result of tax reform will be in the region of 200 basis points.




Citi 2018 Proxy Statement



Table of Contents





5







It is important to note that the DTA charge had only a modest impact on our regulatory capital. After the common stock repurchases and the DTA charge, Citi finished the year with a Common Equity Tier 1 Capital Ratio (CET1) of 12.4%, comfortably above the 11.5% that management and the board believe is required to prudently operate the firm, and well above our regulatory minimum of 10.0%. Subject to regulatory approval, the company remains committed to returning all of the capital above the amount necessary to prudently operate and invest in our franchise.

We will continue to make investments when their expected return exceeds our cost of capital or when such investments improve the quality of our risk management processes. The significant investments in digitization in both our Institutional Clients Group and Global Consumer Bank are examples of the former, and the investments in straight-through processing that will improve the accuracy and timeliness of our data gathering are an example of the latter. Machine learning, robotics, and blockchain offer potentially meaningful long-term improvements in both operating efficiencies and client satisfaction. Resources are also being devoted to these efforts which are, for the most part, in the early stages of development.

For several years, Mike Corbat and the senior management team have worked hard to inculcate a culture of responsible finance into the organization. That work continues. We all believe that recruiting and nurturing a diverse workforce is both morally right and good business, and we remain committed to that effort as well.

Although we are gratified by the market’s recognition of management’s efforts, neither management nor your directors are complacent. The economic environment seems propitious, but risks, as well as opportunities, loom large. Among other things, we continue to invest in cyber-security, given the increasing sophistication of those who would seek to disrupt our operations, and are also continuing to invest heavily in our Anti-Money Laundering processes.

Engaging with our stockholders is a critical element of good governance, and we will continue to make it a priority. You are encouraged to write your thoughts, concerns, or suggestions to Citigroup Inc. Board of Directors, c/o Rohan Weerasinghe, General Counsel and Corporate Secretary, 388 Greenwich Street, New York, NY 10013.


Michael L. Corbat
Ellen M. Costello
John C. Dugan
Duncan P. Hennes
Peter B. Henry
Franz B. Humer S. Leslie Ireland
Renée J. James
Eugene M. McQuade
Michael E. O’Neill
Gary M. Reiner
Anthony M. Santomero Diana L. Taylor
James S. Turley
Deborah C. Wright
Ernesto Zedillo Ponce de Leon



A WORD OF APPRECIATION


We would like to thank Bill Thompson, who retired from our Board in July 2017 for his many contributions to Citi.







www.citigroup.com



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6





















(Intentionally Left Blank)



























Table of Contents

7

Notice of Annual Meeting of Stockholders




Citigroup Inc.
388 Greenwich Street
New York, New York 10013

Dear Stockholder:

Citi’s Annual Stockholders’ Meeting will be held on Tuesday, April 24, 2018, at 9:00 a.m. in The Great Hall at The Congress Plaza Hotel in Chicago, Illinois. Directions to the 2018 Annual Meeting location are provided on page 138 of this Proxy Statement. You will need an admission ticket or proof of ownership of Citi stock to enter the meeting. Live audio of the Annual Meeting will be webcast at www.citigroup.com.


At the meeting, stockholders will be asked to:

1. elect the directors listed in this proxy statement,
2. ratify the selection of Citi’s independent registered public accounting firm for 2018,
3. consider an advisory vote to approve Citi’s 2017 executive compensation,
4. approve additional authorized shares under the Citigroup 2014 Stock Incentive Plan,
5. act on certain stockholder proposals, and
6. consider any other business properly brought before the meeting, or any adjournment or postponement thereof, by or at the direction of the Board of Directors.

Citi has utilized the Securities and Exchange Commission rule allowing companies to furnish proxy materials to its stockholders over the Internet. This process allows us to expedite our stockholders’ receipt of proxy materials, lower the costs of distribution, and reduce the environmental impact of our 2018 Annual Meeting.

In accordance with this rule, on or about March 14, 2018, we sent to those current stockholders who were stockholders at the close of business on February 26, 2018, a notice of the 2018 Annual Meeting containing a Notice of Internet Availability of Proxy Materials (Notice). The Notice contains instructions on how to access our Proxy Statement and Annual Report and vote online. If you received a Notice and would like to receive a printed copy of our proxy materials from us instead of downloading a printable version from the Internet, please follow the instructions for requesting such materials included in the Notice.

By order of the Board of Directors,

Rohan Weerasinghe
Corporate Secretary
March 14, 2018

www.citigroup.com



Table of Contents

8




(Intentionally Left Blank)



















Table of Contents

9

Contents


PROXY STATEMENT HIGHLIGHTS 10
ENVIRONMENTAL, SOCIAL, AND
GOVERNANCE HIGHLIGHTS 13
ABOUT THE 2018 ANNUAL MEETING 16
How We Have Done 21
Annual Report 21
CORPORATE GOVERNANCE 22
Corporate Governance Materials Available on
Citi’s Website 23
Corporate Governance Guidelines 23
Director Independence 25
Meetings of the Board of Directors and
Committees 29
Meetings of Non-Management Directors 29
Board Leadership Structure 29
Board Diversity 30
Board Self-Assessment Process 30
Board’s Role in Risk Oversight 31
Committees of the Board of Directors 32
Involvement in Certain Legal Proceedings 38
Certain Transactions and Relationships,
Compensation Committee Interlocks, and
Insider Participation 38
Indebtedness 40
Business Practices Committees 41
Conduct and Culture 41
Code of Ethics for Financial Professionals 42
Ethics Hotline 43
Code of Conduct 43
Communications with the Board 43
STOCK OWNERSHIP 44
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE 46
PROPOSAL 1: ELECTION OF DIRECTORS 46
Director Criteria and Nomination Process 46
Director Qualifications 47
The Nominees 51
Directors’ Compensation 67
AUDIT COMMITTEE REPORT 70


PROPOSAL 2: RATIFICATION OF SELECTION
OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM 71
PROPOSAL 3: ADVISORY VOTE TO APPROVE
CITI’S 2017 EXECUTIVE COMPENSATION 74
Compensation Discussion and Analysis 74
The Personnel and Compensation
Committee Report 103
2017 Summary Compensation Table and
Compensation Information 104
Management Analysis of Potential Adverse
Effects of Compensation Plans 112
CEO Pay Ratio 113
PROPOSAL 4: APPROVAL OF ADDITIONAL
AUTHORIZED SHARES UNDER THE
CITIGROUP 2014 STOCK INCENTIVE PLAN 115
STOCKHOLDER PROPOSALS 124
Submission of Future Stockholder Proposals 137
Cost of Annual Meeting and Proxy Solicitation 137
Householding 137
Directions to 2018 Annual Meeting Location 138
ANNEX A 139
Additional Information Regarding
Proposal 3 139
Glossary 139
Citigroup – Financial Scorecard
Metric Detail and Reconciliations 140
ANNEX B 142
Citigroup 2014 Stock Incentive Plan (as amended
and restated as of April 24, 2018, subject to
approval by stockholders) 142


www.citigroup.com



Table of Contents



10


Proxy Statement Highlights


Voting Items

Proposal 1: Election of Directors (Pages 46-69)
The Board recommends you vote FOR each nominee
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm (Pages 71-73)
The Board recommends you vote FOR this proposal
Proposal 3: Advisory Vote to Approve Citi’s 2017 Executive Compensation (Pages 74-114)
The Board recommends you vote FOR this proposal
Proposal 4: Approve additional authorized shares under the Citigroup 2014 Stock Incentive Plan (Pages 115-123)
The Board recommends you vote FOR this proposal
Stockholder Proposals 5-10 (Pages 124-136)
The Board recommends you vote AGAINST the stockholder proposals

Meeting and
Voting Information

Date and Time
April 24, 2018, 9:00 a.m.

Place
The Great Hall at
The Congress Plaza Hotel
520 South Michigan
Avenue
Chicago, Illinois 60605

Record Date
February 26, 2018

Voting
Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each Director nominee and one vote for each of the other proposals to be voted on.

Admission
An admission ticket or proof of ownership of Citi’s stock is required to enter Citi’s Annual Meeting.




Board and Corporate Governance
Highlights

Summary of Director Nominees

The nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy. The Board also oversees management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills and backgrounds necessary to oversee Citi’s efforts toward becoming an indisputably strong financial institution that is focused on delivering sustainable, client-led revenue growth while operating within a complex financial and regulatory environment.

Independence
88% of our Board Nominees
are Independent

Board Refreshment
The average board tenure of our nominees is 5 years and no nominee has served for more than 10 years. There have been 7 new Directors elected within the last 5 years.

Diversity
Citi’s Board is committed to ensuring that it is composed of individuals whose backgrounds reflect the diversity represented by our employees, customers, and stakeholders.



Citi 2018 Proxy Statement

Table of Contents



PROXY STATEMENT HIGHLIGHTS 11

Director Nominees

Name and
Primary Qualifications Age Director
Since Principal Occupation and Other Current
Public Company Directorships Citi Committee Memberships
A EC E NGP OT PC RM
Michael L. Corbat
57 2012 Chief Executive Officer, Citigroup Inc.
Ellen M. Costello
63 2016 Former President and CEO, BMO Financial
Corporation, and Former U. S. Country Head,
BMO Financial Group • •
John C. Dugan
62 2017 Former Partner and Chair, Financial
Institutions Group, Covington & Burling LLP • • •
Duncan P. Hennes
61 2013 Co-Founder and Partner, Atrevida Partners, LLC
Board: RenaissanceRe Holdings Ltd. • • •
Peter B. Henry
48 2015 Dean Emeritus, New York University,
Leonard N. Stern School of Business
Boards: General Electric Company, Nike, Inc. • •
Franz B. Humer
71 2012 Former Chairman, Roche Holdings Ltd. • • •
S. Leslie Ireland
58 2017 Former Assistant Secretary for Intelligence and
Analysis, U.S. Department of the Treasury, and
National Intelligence Manager for Threat Finance,
Office of the Director of National Intelligence •
Renée J. James
53 2016 Chairman and CEO, Ampere Computing
Operating Executive, The Carlyle Group
Boards: Oracle Corporation, Sabre Corporation,
Vodafone Group Plc • •
Eugene M. McQuade
69 2015 Former Vice Chairman, Citigroup Inc.
and Former CEO, Citibank, N. A.
Board: XL Group, Ltd. (Chairman) •
Michael E. O’Neill
71 2009 Chairman, Citigroup Inc. • • • • •
Gary M. Reiner
63 2013 Operating Partner, General Atlantic LLC
Boards: Hewlett Packard Enterprise Company,
Box Inc. • •
Anthony M. Santomero
71 2009 Former President, Federal Reserve Bank
of Philadelphia
Boards: RenaissanceRe Holdings Ltd., Penn
Mutual Life Insurance Company • • •
Diana L. Taylor
63 2009 Vice Chair, Solera Capital LLC
Boards: Brookfield Asset Management,
Sotheby’s • • •
James S. Turley
62 2013 Former Chairman and CEO, Ernst & Young
Boards: Emerson Electric Co., Intrexon
Corporation, Northrop Grumman Corporation • • •
Deborah C. Wright
60 2017 Former Chairman, Carver Bancorp, Inc.
Boards: Time Warner Inc., Voya Financial, Inc. • •
Ernesto Zedillo
Ponce de Leon

66 2010 Director, Center for the Study of Globalization
and Professor in the Field of International
Economics and Politics, Yale University
Boards: Alcoa Corp., Procter & Gamble Company • • •

• committee member
• committee chair
Qualifications

Compensation International Business or Economics A
EC
E
NGP

OT
PC
RM Audit
Ethics and Culture
Executive
Nomination, Governance
and Public Affairs
Operations and Technology
Personnel and Compensation
Risk Management
Consumer Business and
Financial Services Legal Matters
Corporate Affairs Operations and Technology
Corporate Governance Regulatory and Compliance
Financial Reporting Risk Management
Institutional Business

www.citigroup.com





Table of Contents



12 PROXY STATEMENT HIGHLIGHTS

Corporate Governance Highlights

Citi is active in ensuring its governance practices are at the leading edge of best practices. Highlights include:


Alignment with Stockholders Compensation Governance Adherence to Corporate
Governance Best Practices

●The By-laws grant eligible stockholders the right to include stockholder nominees to the Board in the Company’s proxy materials

●Citi has an independent Chair

●If there is no independent Chairman of the Board, the Board will appoint a Lead Independent Director

●Majority vote standard for uncontested Director elections

●Stockholders have the right to call a special meeting and to act by written consent

●No super-majority vote provisions in our governing instruments

●Emphasize pay-for-performance alignment

●Majority of total compensation based on performance

●The Personnel and Compensation Committee retains an independent compensation consultant

●Clawback policies for employees

●Executive officers and Directors are required to retain at least 75% of the equity awarded to them as incentive compensation as long as they serve as executive officers or Directors, respectively; executive officers are required to retain 50% of such equity awards for one year following the termination of their employment

●A recent review of Citi's compensation in the U.S., the U.K., and Germany determined that women are paid on average 99% of what men are paid and U.S. minorities are paid on average 99% of what U.S. non-minorities are paid

●Ethics and Culture Committee of the Board

●Meaningful Political Activities Statement and disclosure of Citi’s political contributions on Citi’s website

●Link on our website to federal and state government websites where Citi’s lobbying activities are reported

●Names of significant trade and business associations, in which Citi is a participant, posted on Citi’s website

●Members of Citi’s Board of Directors and Citi’s executive officers are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan

●Citi’s Board includes five women and three minorities

●Ongoing Board refreshment, with new independent Directors added in 2015, 2016 and 2017

●All nominees have served less than 10 years


Citi 2018 Proxy Statement




Table of Contents



ENVIRONMENTAL, SOCIAL, AND GOVERNANCE HIGHLIGHTS 13

Our Investor Engagement Program*

Summer
Members of the Board and senior management conduct follow-up calls with investors regarding votes at the Annual Meeting and other governance issues.

Fall
Management reviews the vote results and feedback received from investors from the prior Annual Meeting and analyzes governance and compensation trends.

Winter
Members of the Board and senior management conduct calls with investors for input on a variety of governance and compensation matters.

Spring
Members of the Board and senior management conduct conversations with our institutional investors in advance of the Annual Meeting to provide an opportunity for discussion of compensation, management and stockholder proposals, and other governance and annual meeting matters.

Annual Stockholders’ Meeting



*
In the period following the 2017 Annual Meeting and the issuance of the 2018 Proxy Statement, Citi engaged with investors regarding, among other topics, the following: executive compensation, climate change risk and disclosure, gender pay equity, human and indigenous peoples’ rights, board refreshment and governance, and certain stockholder proposals. For information about our engagement efforts in advance of the 2018 Annual Meeting, please see pages 77-78 in this Proxy Statement.


Environmental, Social, and Governance Highlights

Citizenship and Sustainability Governance at Citi

Citizenship and sustainability governance are important principles at Citi, and two Board-level committees have oversight responsibility for citizenship and sustainability-related activities. Management groups provide strategic guidance and senior-level review on citizenship and sustainability topics.

Board of Directors Senior Management

Nomination, Governance and Public Affairs Committee Ethics and Culture
Committee
●Environmental and Social Advisory Council

●Citizenship, Corporate Sustainability, and Environmental and Social Risk Management teams

●Business Practices Committees


Oversees citizenship and sustainability programs and company policies and procedures that impact citizenship and sustainability, including climate change, human rights and other issues, advises on engagement with major external stakeholders, and provides oversight of business practices Oversees senior management’s efforts to reinforce and enhance a culture of ethics throughout the firm

www.citigroup.com




Table of Contents



14

Sustainability Framework

Our Sustainable Progress Strategy focuses on Climate Change, Sustainable Cities, and People and Communities, with our sustainability activities organized under three primary pillars:


Environmental
Finance Environmental &
Social Risk
Management (ESRM) Operations &
Supply Chain
$100 Billion Environmental Finance Goal focused on financing environmental and climate solutions Collaborating with our clients to manage environmental and social risks and impacts associated with our products and services Managing our global facilities and supply chain to minimize direct impact, reduce costs, and reflect best practices

Sustainable Progress Performance Highlights — 2017


FINANCED and FACILITATED
$17.6B
under our $100 Billion
Environmental Finance Goal
(cumulative $57B since 2014) As part of our COAL MINING
POLICY COMMITMENT,
reduced our
credit exposure to this sector for
the past two years(1) Citi to be 100%
powered by
RENEWABLE ENERGY
by 2020

FACILITATED
$4.4B
IN GREEN BONDS
for environmentally
responsible projects(2) UPDATED INDIGENOUS
PEOPLES POLICY to
global standard requiring
consultation with the goal of
achieving FREE, PRIOR, AND
INFORMED CONSENT Expanded our LEED-CERTIFIED
real estate portfolio to
22%(3)

Helped Goldwind, the
LARGEST CHINESE
WIND TURBINE
MANUFACTURER, finance
a 160MW wind project in Texas
with direct investment and a
power hedge Implemented an ESRM Watchlist
EARLY WARNING
SYSTEM for clients and
transactions that pose
heightened ENVIRONMENTAL, SOCIAL, OR REPUTATIONAL RISK Committed to procuring an
additional $100 MILLION
from WOMEN-OWNED
BUSINESSES over the next
three years


Citi, together with the United Nations Environment Programme Finance Initiative and 15 other global banks, is working on implementing the recommendations set forth by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) (https://www.fsb-tcfd.org/), including conducting climate scenario analyses.

____________________


(1)
In 2015, Citi updated its Coal Mining Sector Standard to include a commitment to reduce its credit exposure to the sector. http://www.citigroup.com/citi/sustainability/data/Environmental-and-Social-Policy-Framework.pdf

(2)
Green Bonds, according to the Green Bond Principles, are any type of bond instrument where the proceeds will be exclusively applied to eligible environmental projects. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/

(3)
LEED, or Leadership in Energy and Environmental Design, is a globally recognized green building rating system. https://new.usgbc.org/LEED


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ENVIRONMENTAL, SOCIAL, AND GOVERNANCE HIGHLIGHTS 15

The UN Sustainable Development Goals: Citi Priorities

The United Nations Sustainable Development Goals (SDGs) are a set of 17 global development goals for 2030. Citi is focused on seven SDGs where our core business and key initiatives can have the greatest impact.

Our Focus Areas


Gender
Equality Affordable &
Clean Energy Decent Work &
Economic Growth Industry, Innovation &
Infrastructure
(Goal 5) (Goal 7) (Goal 8) (Goal 9)



Sustainable Cities &
Communities Climate
Action Partnership for
the Goals
(Goal 11) (Goal 13) (Goal 17)

Citi Initiatives Tied to Our SDG Priorities



●$100B Environmental Finance Goal: Pledged to finance and facilitate $100B toward activities that reduce the impacts of climate change and create solutions

●Citi for Cities: Partner with governments, businesses, and communities to identify and implement innovative solutions that help cities thrive

●Pathways to Progress: $150 million commitment by the Citi Foundation to boost the employability of 600,000 youths worldwide by 2020 (met $50M goal)


●Inclusive Finance: Dedicated Inclusive Finance team works across Citi’s businesses globally to identify solutions to expand financial access to underserved markets

●Women’s Economic Empowerment: Working to promote greater gender equality through dedicated programs within our company, as well as through being the first U.S. bank to disclose gender pay data

●Open Innovation: Citi’s Open Innovation initiatives offer high-impact programs to accelerate the bank’s access to disruptive digital business models


Citizenship Performance Highlights – 2017


Conduct and
Culture
●Expanded Conduct Risk Program to include businesses in 84 countries, up from 44 countries the previous year

●More than 175,000 employees completed Compliance training, including Anti-Money Laundering (AML), Sanctions and Anti-Bribery training


Digital
Innovation
●Engaged 21,000+ Citi mobile customers in co-creation effort to identify digital banking problems our mobile app can help solve

●Recognized as the world’s best digital bank by Euromoney magazine


Talent and
Diversity
●Launched five of our ten Affinities (Asian Heritage, Black Heritage, Citi Salutes, Citi Women and Pride) and worked with our Affinity Leaders to develop and roll out strategic priorities for these diverse populations

●80% of Citi employees participated in an unconscious bias training, including 250 of Citi’s most senior leaders and the CEO leadership team


Human Rights
●Released our first UK Modern Slavery Act transparency statement, summarizing our approach to eradicating modern slavery in our supply chain and operations

●Scored 100% on the Human Rights Campaign's Corporate Equality Index since 2004



ESG
Ratings

●Selected for annual inclusion in DJSI(1) World and North America indices (since 2001) and FTSE4Good Index(2) (since 2002)

●Maintained CDP(3) score of A-

●Sustainalytics(4) score of 68 (79th percentile) and MSCI(5) score of BBB



____________________


(1)
Citi has been named to the Dow Jones Sustainability World and Dow Jones Sustainability North America indices (DJSI) for the 17th consecutive year. These indices include leading sustainable companies based on an assessment of economic, environmental, social and governance factors. http://www.sustainability-indices.com/

(2)
For the 16th year in a row, Citi was named a constituent of the FTSE4Good Index, which measures the sustainability performance of companies. http://www.ftse.com/products/indices/FTSE4Good

(3)
CDP is a non-profit organization that collects environmental data from companies, cities, states and regions to measure their environmental impacts. Citi has responded to CDP since 2003. https://www.cdp.net/en

(4)
Sustainalytics is a global provider of environmental, social and governance performance research for investors. https://www.sustainalytics.com/

(5)
MSCI is a global provider of environmental, social and governance performance research for investors. https://www.msci.com/


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16

About the 2018 Annual Meeting

Q:
Who is soliciting my vote?

A:
The Board of Directors of Citigroup Inc. is soliciting your vote at the 2018 Annual Meeting of Citi’s stockholders.




Q:
Where and when will the 2018 Annual Meeting take place?

A:
The Annual Meeting is scheduled to begin at 9:00 a.m. on April 24, 2018 in The Great Hall at The Congress Plaza Hotel in Chicago, Illinois. Directions to the 2018 Annual Meeting location are provided on page 138 of this Proxy Statement. Live audio of the 2018 Annual Meeting will be webcast at www.citigroup.com.




Q:
Why did I receive a one-page Notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials?

A:
Pursuant to rules adopted by the Securities and Exchange Commission (SEC), we have elected to mail to many of our stockholders a Notice of Internet Availability of the Proxy Materials (Notice) instead of a paper copy of the proxy materials. All stockholders receiving the Notice will have the ability to access the proxy materials over the Internet and receive a paper copy of the proxy materials by mail on request. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. In addition, the Notice contains instructions on how you may access proxy materials in printed form by mail or electronically on an ongoing basis. This process has allowed us to expedite our stockholders’ receipt of proxy materials, lower the costs of distribution, and reduce the environmental impact of our 2018 Annual Meeting.




Q:
Why didn’t I receive a Notice in the mail about the Internet availability of the proxy materials?

A:
We are providing some of our stockholders, including stockholders who have previously asked to receive paper copies of the proxy materials and some of our stockholders who are living outside of the United States, with paper copies of the proxy materials instead of a Notice. In addition, we are providing a Notice by e-mail to those stockholders who have previously elected delivery of the proxy materials electronically. Those stockholders should have received an e-mail containing a link to the website where those materials are available and a link to the proxy voting website.




Q:
How can I access Citi’s proxy materials and Annual Report electronically?

A:
This Proxy Statement and the 2017 Annual Report are available on Citi’s website at www.citigroup.com.Click on “About Us,” then “Corporate Governance.” Most stockholders can elect not to receive paper copies of future Proxy Statements and Annual Reports and can instead view those documents on the Internet.

If you are a stockholder of record, you can choose this option and save Citi the cost of producing and mailing these documents by following the instructions provided when you vote over the Internet. If you hold your Citi stock through a bank, broker, or other holder of record, please refer to the information provided by that entity for instructions on how to elect not to receive paper copies of future Proxy Statements and Annual Reports.

If you choose not to receive paper copies of future Proxy Statements and Annual Reports, you will receive an e-mail message next year containing the Internet address to use to access Citi’s Proxy Statement and Annual Report. Your choice will remain in effect until you tell us otherwise or until your consent is deemed to be revoked under applicable law. You do not have to elect Internet access each year. To view, cancel, or change your enrollment profile, please go to www.InvestorDelivery.com.


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ABOUT THE 2018 ANNUAL MEETING 17


Q:
What will I be voting on?

A:
●Election of Directors (see pages 46-69).

●Ratification of KPMG as Citi’s independent registered public accounting firm for 2018 (see pages 71-73).

●An advisory vote to approve Citi’s 2017 executive compensation (see pages 74-114).

●Approve additional authorized shares under the Citigroup 2014 Stock Incentive Plan (see pages 115-123).

●Six stockholder proposals (see pages 124-136).



An agenda will be distributed at the meeting.




Q:
How many votes do I have?

A:
You will have one vote for every share of Citi common stock you owned on February 26, 2018 (the record date).




Q:
How many votes can be cast by all stockholders?

A:
2,560,325,531, consisting of one vote for each of Citi’s shares of common stock that were outstanding on the record date. There is no cumulative voting.




Q:
How many votes must be present to hold the meeting?

A:
To constitute a quorum to transact business at the 2018 Annual Meeting, the holders of a majority of the votes that can be cast, or 1,280,162,767 shares, must be present or represented by proxy at the Annual Meeting. We urge you to vote by proxy even if you plan to attend the Annual Meeting, so that we will know as soon as possible that enough votes will be present for us to hold the Annual Meeting. Persons voting by proxy will be deemed present at the meeting even if they abstain from voting on any or all of the proposals presented for stockholder action. Shares held by brokers who vote such shares on any proposal will be counted as present for purposes of establishing a quorum, and shares treated as broker non-votes for one or more proposals will nevertheless be deemed present for purposes of constituting a quorum for the Annual Meeting.




Q:
Does any single stockholder control 5% or more of any class of Citi’s voting stock?

A:
Yes, there are two stockholders that each control more than 5%. According to a Schedule 13G Information Statement filed by BlackRock, Inc. and certain subsidiaries (BlackRock) on February 1, 2018, BlackRock may be deemed to beneficially own 7.1% of Citi’s common stock. According to a Schedule 13G Information Statement filed by The Vanguard Group, Inc. (Vanguard) on February 9, 2018, Vanguard may be deemed to beneficially own 6.86% of Citi’s common stock.

For further information, see Stock Ownership — Owners of More than 5% of Citi Common Stock on page 45 in this Proxy Statement.


Q: How do I vote?
A:
You can vote by proxy whether or not you attend the Annual Meeting. To vote by proxy, stockholders have a choice of voting over the Internet, by QR code, by phone, or by using a traditional proxy card by mail or in person.



Vote by Internet
Go to www.proxyvote.com. You will need the 16-digit number included in your proxy card, voter instruction form, or Notice. Vote by QR code
You can scan this QR code to vote your proxy card. You will need the 16-digit number included in your proxy card, voter instruction form, or Notice. Vote by Phone
Call the number on your proxy card or the number on your voter instruction form. You will need the 16-digit number included in your proxy card, voter instruction form, or Notice. Vote by Mail
Send the completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form. Vote in Person
See the instructions below regarding attendance at the Annual Meeting.




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18 ABOUT THE 2018 ANNUAL MEETING



To reduce our administrative and postage costs, we ask that you vote using the Internet, by telephone, by mobile phone, or by QR code, all of which are available 24 hours a day. To ensure that your vote is counted, please remember to submit your vote by 11:59 p.m. ET on April 23, 2018. If you hold your shares in a Citi employee benefit plan, please submit your vote by the date indicated on your proxy card.

If you are a record holder of Citi common stock, you may attend the 2018 Annual Meeting and vote in person. If you want to vote in person at the Annual Meeting, and you hold your Citi common stock through a securities broker (that is, in “street name”), you must obtain a proxy from your broker and bring that proxy to the Annual Meeting.


Q: How do I get a printed proxy card?
A:
If you received a Notice instead of the printed materials, there are three ways for stockholders to request a proxy card and a full set of materials at no charge. In all three examples you will need the 16-digit Control Number printed on the Notice.

Requesting a proxy card
By telephone: 1-800-579-1639;
By Internet: www.proxyvote.com; or
By e-mail: sendmaterial@proxyvote.com (send a blank e-mail with the 16-digit Control Number in the subject line).



Q: Can I change my vote?
A: Yes. Just send in a new proxy card or voter instruction form with a later date, cast a new vote by telephone or Internet, or send a written notice of revocation to Citi’s Corporate Secretary, Rohan Weerasinghe, at 388 Greenwich Street, New York, New York 10013. If you attend the 2018 Annual Meeting and want to vote in person, you can request that your previously submitted proxy not be used. To ensure that your vote is counted, please remember to submit your vote by 11:59 p.m. ET on April 23, 2018.


Q: What if I don’t vote for some of the matters listed on my proxy card?
A: If you return a signed proxy card without indicating voting instructions, your shares will be voted in accordance with the Board’s recommendation FOR the nominees listed on the card, FOR KPMG as independent registered public accounting firm for 2018, FOR Citi’s 2017 executive compensation, FOR an amendment to the Citigroup 2014 Stock Incentive Plan for additional authorized shares, and AGAINST the stockholder proposals. If you only vote for certain matters, the remaining matters will be voted as set forth above. See also “Could other matters be decided at the 2018 Annual Meeting?”


Q: Can my shares held in street name be voted if I don’t return my voter instruction card and don’t attend the 2018 Annual Meeting?
A:
If you don’t vote your shares held in street name, your broker can vote your shares on matters that the New York Stock Exchange (NYSE) has ruled discretionary.

Discretionary Items. KPMG’s appointment is a discretionary item. NYSE member brokers who do not receive instructions from beneficial owners may vote on this proposal as follows: (i) a Citi affiliated member is permitted to vote your shares in the same proportion as all other shares are voted with respect to this proposal, and (ii) all other NYSE member brokers are permitted to vote your shares at their discretion.

Non-discretionary Items. Brokers will not be able to vote your shares on the election of Directors, the advisory vote to approve Citi’s 2017 executive compensation, the amendment to the Citigroup Stock Incentive Plan for additional authorized shares, and the stockholder proposals if you fail to provide instructions. Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given.

If your shares are registered directly in your name, not in the name of a bank or broker, you must vote your shares or your vote will not be counted. Please vote your proxy so your vote can be counted.


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ABOUT THE 2018 ANNUAL MEETING 19


Q: If I hold shares through Citigroup’s employee benefit plans and do not provide voting instructions, how will my shares be voted?
A: If you hold shares of common stock through Citigroup’s employee benefit plans or stock incentive plans and do not provide voting instructions to the plans’ trustees or administrators, your shares will be voted in the same proportion as the shares beneficially owned through such plans for which voting instructions are received, unless otherwise required by law.


Q: What vote is required, and how will my votes be counted, to elect Directors and to adopt the other proposals?
A: The following chart describes the proposals to be considered at the meeting, the vote required to elect Directors and to adopt each of the other proposals, and the manner in which votes will be counted:


Proposal Voting Options Vote Required to Adopt
the Proposal Effect of
Abstentions Effect of
“Broker
Non-Votes”(1)
Election of Directors For, against, or abstain on each nominee A nominee for Director will be elected if the votes cast for such nominee exceed the votes cast against such nominee. No effect No effect
Ratification of KPMG For, against, or abstain The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon. Treated as votes against Brokers have discretion to vote
Advisory vote to approve Citi’s 2017 executive compensation For, against, or abstain The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon. Treated as votes against No effect
Approval of additional authorized shares under the Citigroup 2014 Stock Incentive Plan For, against, or abstain The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon. Treated as votes against No effect
Six stockholder proposals For, against, or abstain The affirmative vote of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote thereon. Treated as votes against No effect


(1) A broker non-vote generally occurs when a broker is not permitted to vote on a matter without instructions from a customer having beneficial ownership in the securities and has not received such instructions. Broker non-votes will not be counted as shares entitled to vote on the proposal.

If a nominee for Director is not re-elected by the required vote, he or she will remain in office until a successor is elected and qualified or until his or her earlier resignation or removal. Citi’s By-laws provide that in the event a Director nominee is not re-elected, such Director shall offer to resign from his or her position as a Director. Unless the Board decides to reject the offer or to postpone the effective date of the offer, the resignation shall become effective 60 days after the date of the election.

The result of the votes on an advisory vote on Citi’s 2017 executive compensation is not binding on the Board, whether or not the resolution is passed under the voting standards described above. In evaluating the stockholder vote on the advisory resolution, the Board will consider the voting results in their entirety.

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20 ABOUT THE 2018 ANNUAL MEETING


Q: Is my vote confidential?
A: In 2006, the Board adopted a confidential voting policy as part of its Corporate Governance Guidelines. Under the policy, except as necessary to meet applicable legal requirements or as otherwise described below, all votes, whether submitted by proxies, ballots, Internet voting, telephone voting, or otherwise are kept confidential for registered stockholders who request confidential treatment. If you are a registered stockholder and would like your vote kept confidential, please check the appropriate box on the proxy card or follow the instructions when submitting your vote by telephone, mobile phone, or by the Internet. If you hold your shares in “street name” or through an employee benefit plan or stock incentive plan, your vote already receives confidential treatment and you do not need to request confidential treatment in order to maintain the confidentiality of your vote.

The confidential voting policy will not apply in the event of a proxy contest or other solicitation based on an opposition Proxy Statement and in certain other limited circumstances. For further details regarding this policy, please see the Corporate Governance Guidelines, available on Citi’s website at www.citigroup.com.


Q: Could other matters be decided at the 2018 Annual Meeting?
A: We don’t know of any matters that will be considered at the Annual Meeting other than those described above. If a stockholder proposal that was excluded from this Proxy Statement is brought before the meeting, the Chairman will declare such proposal out of order, and it will be disregarded, or we will vote the proxies AGAINST the proposal. If any other matters arise at the Annual Meeting that are properly presented at the meeting, the proxies will be voted at the discretion of the proxy holders.


Q: What happens if the meeting is postponed or adjourned?
A: Your proxy will still be good and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted.


Q: Do I need a ticket to attend the 2018 Annual Meeting?
A:
Yes, you will need an admission ticket or proof of ownership of Citi common stock to enter the Annual Meeting. When you arrive at the Annual Meeting, you may be asked to present photo identification, such as a driver’s license.

●If you received a Notice of Internet Availability of Proxy Materials, you must bring the Notice to gain admission to the Annual Meeting.

●If you did not receive a Notice but received a paper copy of the proxy materials and your shares are held in your name, please bring the admission ticket printed on the top half of the proxy card supplied with your materials.

●If you did not receive a Notice but received a paper copy of the proxy materials and your shares are held in the name of a bank, broker, or other holder of record, please bring the admission ticket that was enclosed with your materials.

●If you receive your proxy materials by e-mail, you will need proof of ownership to be admitted to the Annual Meeting. A recent brokerage statement or letter from a bank or broker is an example of proof of ownership.

●If you arrive at the meeting without an admission ticket, we will admit you only if we are able to verify that you are a Citi stockholder. If you hold your shares in a joint account, both owners can be admitted to the Annual Meeting, provided that proof of joint ownership is given. Citi will not be able to accommodate guests at the Annual Meeting. Any persons needing special assistance should contact Shareholder Relations by phone at 1-813-604-2778 or at the following e-mail address: shareholderrelations@citi.com.

●Tickets to the Annual Meeting are not transferable.

●A stockholder may appoint only one proxy to represent him or her at the Annual Meeting.


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ABOUT THE 2018 ANNUAL MEETING 21

How We Have Done

Annual Report

If you received these materials by mail, you should have also received Citi’s Annual Report to Stockholders for 2017 with them. The 2017 Annual Report is also available on Citi’s website at www.citigroup.com. We urge you to read these documents carefully. In accordance with the SEC’s rules, the Five-Year Performance Graph appears in the 2017 Annual Report on Form 10-K.

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22

Corporate Governance

Citigroup Inc. (Citigroup, Citi, or the Company) continually strives to maintain the highest standards of ethical conduct: reporting results with accuracy and transparency and maintaining full compliance with the laws, rules, and regulations that govern Citi’s businesses. Citi is active in ensuring its governance practices are at the leading edge of best practices. Below is a compilation of Citi’s Corporate Governance initiatives:

Good Governance
●A standing Ethics and Culture Committee of the Board of Directors oversees management’s efforts to foster a culture of ethics within Citi;


●No super-majority vote provisions in our Restated Certificate of Incorporation;


●A declassified board structure;


●By-laws provide that if Citi does not have an independent Chairman of the Board, the Board is required to elect a lead independent Director;


●Majority vote standard for uncontested Director elections;


●Stock ownership commitment for the Board and executive officers; and


●A recent review of Citi’s compensation in the U.S., the U.K., and Germany determined that women are paid on average 99% of what men are paid and U.S. minorities are paid on average 99% of what U.S. non-minorities are paid.

Stockholder Rights
●Proxy access by-law;


●Stockholders holding at least 25% of the outstanding common stock have the right to call a special meeting; and


●Stockholders may act by written consent.

Executive Compensation
●Strong executive compensation governance practices, including clawback policies and a requirement that executive officers must hold a substantial amount of vested Citi common stock for at least one year after they cease being executive officers; and


●Members of Citi’s Board of Directors and Citi’s executive officers (i.e., Section 16 Insiders) are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan.

Political Activity
●Political Activities Statement (formerly Citi’s Political Contributions and Lobbying Statement) includes significant disclosure about our lobbying practices and oversight. The Political Activities Statement provides meaningful disclosure about:


➢our lobbying policies and procedures including grassroots lobbying;


➢payments made by Citi for direct lobbying;


➢trade and business association participation;


➢membership in any tax-exempt group that writes and endorses model legislation; and


➢the Board’s oversight of lobbying activities, trade and business association participation, and political contributions;


●Nomination, Governance and Public Affairs Committee has oversight responsibility for trade association payments in addition to oversight responsibility for political contributions and lobbying activities; and


●Transparency on practices around political contributions and trade and business associations through:



➢a link on our website to federal and state government websites where our lobbying activities are reported;


➢requiring trade and business associations to which Citi pays dues to attest that no portion of such payments are used for independent expenditures; and


➢listing the names of our significant trade and business associations on Citi’s website.


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CORPORATE GOVERNANCE 23

Corporate Governance Materials Available on Citi’s Website

In addition to our Corporate Governance Guidelines, other information relating to corporate governance at Citi is available on the Corporate Governance section of our website at www.citigroup.com. Click on “About Us” and then “Corporate Governance.”

www.citigroup.com/citi/
investor/corporate_
governance.html ●
Audit Committee Charter


Ethics and Culture Committee Charter


Nomination, Governance and Public Affairs Committee Charter


Operations and Technology Committee Charter


Personnel and Compensation Committee Charter


Risk Management Committee Charter


Code of Conduct


Code of Ethics for Financial Professionals


Citi’s Compensation Philosophy


By-laws and Restated Certificate of Incorporation


Corporate Political Activities Statement


Global Citizenship Report


Banking on 2030: Citi & the Sustainable Development Goals


Environmental and Social Policy Framework


Sustainable Growth at Citi: Progress and Impacts of Citi’s $100 Billion Environmental Finance Goal


A list of our 2017 Political Contributions and the names of Citi’s significant trade and business associations



Citi stockholders may obtain printed copies of these documents by writing to Citigroup Inc., Corporate Governance, 601 Lexington Avenue, 19th Floor, New York, New York 10022.

Corporate Governance Guidelines

Citi’s Corporate Governance Guidelines (the Guidelines) embody many of our long-standing practices, policies, and procedures, which are the foundation of our commitment to best practices. The Guidelines are reviewed at least annually, and revised as necessary, to continue to reflect best practices. The full text of the Guidelines, as approved by the Board, is set forth on Citi’s website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Corporate Governance Guidelines.” The Guidelines outline the responsibilities, operations, qualifications, and composition of the Board.

Director Independence

Our goal is that at least two-thirds of the members of the Board be independent. A description of our independence criteria and the results of the Board’s independence determinations are set forth below.

Board Committees

The Guidelines require that all members of the required committees of the Board (Audit; Nomination, Governance and Public Affairs; and Personnel and Compensation) be independent. Committee members are appointed by the Board upon recommendation of the Nomination, Governance and Public Affairs Committee. Committee membership and Chairs are rotated periodically. The Board and each Committee have the power to hire and fire independent legal, financial, or other advisors, as they may deem necessary, without consulting or obtaining the approval of management. Meetings of the non-management Directors are held as part of every regularly scheduled Board meeting and are presided over by the independent Chairman.

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24 CORPORATE GOVERNANCE


Additional Board Service

The number of other for-profit public or non-public company boards on which a Director may serve is subject to a case-by-case review by the Nomination, Governance and Public Affairs Committee, in order to ensure that each Director is able to devote sufficient time to performing his or her duties as a Director. Interlocking directorates are prohibited (inside Directors and executive officers of Citi may not sit on boards of companies where a Citi outside Director is an executive officer).

Change in Status or Responsibilities

If a Director has a substantial change in professional responsibilities, occupation, or business association, he or she is required to notify the Nomination, Governance and Public Affairs Committee and to offer his or her resignation from the Board. The Nomination, Governance and Public Affairs Committee will evaluate the facts and circumstances and make a recommendation to the Board whether to accept the resignation or request that the Director continue to serve on the Board. If a Director assumes a significant role in a not-for-profit entity, he or she is asked to notify the Nomination, Governance and Public Affairs Committee.

Attendance at Meetings

Directors are expected to attend Board meetings and meetings of the Committees on which they serve and the Annual Meeting of stockholders. All of the Directors then in office attended Citi’s 2017 Annual Meeting.

Evaluation of Board Performance

The Nomination, Governance and Public Affairs Committee nominates one of the members of the Board to serve as Chairman of the Board on an annual basis. The Nomination, Governance and Public Affairs Committee also conducts an annual review of Board performance in which the full Board participates, and each standing committee (except for the Executive Committee) conducts its own self-evaluation. As part of the self-evaluation, the Board engages in an examination of its own performance of its obligations on such matters as regulatory requirements, strategic and financial oversight, oversight of risk management, executive compensation, succession planning, and governance matters, among many other topics. The committees evaluate their performance against the requirements of their charters and other aspects of their responsibilities. The full Board and each committee then discuss the results of their respective self-evaluations in executive session, highlighting actions to be taken in response to the discussion. See Board Self-Assessment Process on page 30 for further information.

Director Access to Senior Management and Director Orientation

Directors have full and free access to senior management and other employees of Citi. New Directors are provided with an orientation program to familiarize them with Citi’s businesses, regions, and functions as well as its legal, compliance, regulatory, and risk profile. Citi provides educational sessions on a variety of topics throughout the year for all members of the Board. These sessions are designed to allow Directors to, for example, develop a deeper understanding of a business issue or a complex financial product.

Succession Planning

The Board reviews the Personnel and Compensation Committee’s report on the performance of senior executives in order to ensure that they are providing the highest quality leadership for Citi. The Board also works with the Nomination, Governance and Public Affairs Committee and the Personnel and Compensation Committee to evaluate potential successors to the Chief Executive Officer (CEO). With respect to regular succession of the CEO and senior management, Citi’s Board evaluates internal, and, when appropriate, external candidates. To find external candidates, Citi seeks input from the members of the Board and senior management and/or from recruiting firms. To develop internal candidates, Citi engages in a number of practices, formal and informal, designed to familiarize the Board with Citi’s talent pool. The

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CORPORATE GOVERNANCE 25


formal process involves an annual talent review conducted by senior management at which the Board studies the most promising members of senior management. The Board learns about each person’s experience, skills, areas of expertise, accomplishments, and goals. This review is conducted at a regularly scheduled Board meeting on an annual basis. In addition, members of senior management are periodically asked to make presentations to the Board at Board meetings and Board strategy sessions. These presentations are made by senior managers at the various business units as well as those who serve in corporate functions. The purpose of the formal review and other interaction is to ensure that Board members are familiar with the talent pool inside Citi from which the Board would be able to choose successors to the CEO and evaluate succession for other senior managers as necessary from time to time.

Charitable Contributions

If a Director, or an immediate family member who shares the Director’s household, serves as a director, trustee, or executive officer of a foundation, university, or other not-for-profit organization, and such entity receives contributions from Citi and/or the Citi Foundation, such contributions must be reported to the Nomination, Governance and Public Affairs Committee at least annually.

Insider Investments and Transactions

Members of Citi’s Board of Directors and Citi’s executive officers (i.e., Section 16 Insiders) are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan. The Guidelines restrict certain financial transactions between Citi and its subsidiaries on the one hand and Directors, senior management, and their immediate family members on the other. Personal loans from Citi or its subsidiaries to Citi’s Directors and its most senior executives, or immediate family members who share any such person’s household, are prohibited, except for margin loans to employees of a broker-dealer subsidiary of Citi, mortgage loans, home equity loans, consumer loans, credit cards, and overdraft checking privileges, all made on market terms in the ordinary course of business. See Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation on pages 38-40 of this Proxy Statement.

The Guidelines prohibit investments or transactions by Citi or its executive officers and those immediate family members who share an executive officer’s household in a partnership or other privately held entity in which an outside Director is a principal, or in a publicly traded company in which an outside Director owns or controls more than a 10% interest. Directors and those immediate family members who share the Director’s household are not permitted to receive initial public offering allocations. Directors and their immediate family members may participate in Citi-sponsored investment activities, provided they are offered on the same terms as those offered to similarly situated non-affiliated persons. Under certain circumstances, or with the approval of the appropriate committee, members of senior management may participate in certain Citi-sponsored investment opportunities. Finally, there is a prohibition on certain investments by Directors and executive officers in third-party entities when the opportunity comes solely as a result of their position with Citi.

Director Independence

The Board has adopted categorical standards to assist the Board in evaluating the independence of each of its Directors. The categorical standards, which are set forth below, describe various types of relationships that could potentially exist between a Director or an immediate family member of a Director and Citi, and set thresholds at which such relationships would be deemed to be material. Provided that no relationship or transaction exists that would disqualify a Director under the categorical standards and no other relationships or transactions exist of a type not specifically mentioned in the categorical standards that, in the Board’s opinion, taking into account all facts and circumstances, would impair a Director’s ability to exercise his or her independent judgment, the Board will deem such person to be independent.

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26 CORPORATE GOVERNANCE

The Board and the Nomination, Governance and Public Affairs Committee reviewed certain information obtained from Directors’ responses to a questionnaire asking about their relationships with Citi, and those of their immediate family members and primary business or charitable affiliations and other potential conflicts of interest, as well as certain data collected by Citi’s businesses related to transactions, relationships, or arrangements between Citi on the one hand and a Director, immediate family member of a Director, or a primary business or charitable affiliation of a Director, on the other. The Board reviewed certain relationships or transactions between the Directors or immediate family members of the Directors or their primary business or charitable affiliations and Citi and determined that the relationships or transactions complied with the Corporate Governance Guidelines and the related categorical standards. The Board also determined that, applying the Guidelines and standards, which are intended to comply with the NYSE corporate governance rules, and all other applicable laws, rules, and regulations, each of the following Director nominees standing for re-election and current board members is independent:




●Ellen M. Costello

●John C. Dugan

●Duncan P. Hennes

●Peter B. Henry

●Franz B. Humer

●S. Leslie Ireland

●Renée J. James

●Michael E. O’Neill

●Gary M. Reiner

●Anthony M. Santomero

●Diana L. Taylor

●James S. Turley

●Deborah C. Wright

●Ernesto Zedillo Ponce de Leon


The Board, taking into account the following factors and the recommendation of the Nomination, Governance and Public Affairs Committee, as well as its significant experience with Mr. Dugan, has determined that Mr. Dugan is independent. Mr. Dugan is a former partner at the law firm Covington & Burling LLP (Covington). He retired from the firm in September of 2017, before joining Citi’s Board, has no continuing employment arrangement with Covington, and does not receive any continuing financial benefits from the firm other than a normal, fixed pension. Mr. Dugan served as counsel to the Board from June 2015 to September 2017 (before his retirement from Covington), and to ensure his independence from management in that role, the Board and Mr. Dugan agreed at the outset of that representation that he would personally provide no services to Citi and its affiliates, other than his services to the Board. In addition, payments by Citi to Covington in each of the past four years represented significantly less than 1% of Covington’s annual revenues and less than .01% of Citi’s annual revenues. Based on the factors discussed above, the Board concluded that the NYSE corporate governance rules, our Corporate Governance Guidelines, and the related categorical standards permit Mr. Dugan to be determined independent.

The Board has determined that Michael L. Corbat and Eugene M. McQuade are not independent. Mr. Corbat is our Chief Executive Officer and Mr. McQuade previously served as the Chief Executive Officer of Citibank, N.A., our largest banking subsidiary.

Independence Standards

To be considered independent, a Director must meet the following categorical standards as adopted by our Board and reflected in our Corporate Governance Guidelines. In addition, there are other independence standards under NYSE corporate governance rules that apply to all directors and certain independence standards under SEC and Federal Deposit Insurance Corporation (FDIC) rules that apply to specific committees.

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CORPORATE GOVERNANCE 27

Categorical Standards


Advisory, Consulting and Employment Arrangements

● During any 12-month period within the last three years, neither a Director nor any immediate family member of a Director shall have received from the Company, directly or indirectly, any compensation, fees, or benefits in an amount greater than $120,000, other than amounts paid (a) pursuant to the Company’s Amended and Restated Compensation Plan for Non-Employee Directors or (b) to an immediate family member of a Director who is a non-executive employee of the Company or one of its affiliated legal entities.
● In addition, no member of the Audit Committee, nor any immediate family member who shares such individual’s household, nor any entity in which an Audit Committee member is a partner, member, or executive officer shall, within the last three years, have received any payment for accounting, consulting, legal, investment banking, or financial advisory services provided to the Company.



Business Relationships

● All business relationships, lending relationships, deposit and other banking relationships between the Company and a Director’s primary business affiliation or the primary business affiliation of an immediate family member of a Director must be made in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons.
● In addition, the aggregate amount of payments for property or services in any of the last three fiscal years by the Company to, and to the Company from, any company of which a Director is an executive officer or employee or where an immediate family member of a Director is an executive officer, must not exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues in any single fiscal year.
● Loans may be made or maintained by the Company to a Director’s primary business affiliation or the primary business affiliation of an immediate family member of a Director, only if the loan (i) is made in the ordinary course of business of the Company or one of its subsidiaries, is of a type that is generally made available to other customers, and is on market terms, or terms that are no more favorable than those offered to other customers; (ii) complies with applicable law, including the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley), Regulation O of the Board of Governors of the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) Guidelines; (iii) when made does not involve more than the normal risk of collectability or present other unfavorable features; and (iv) is not classified by the Company as Substandard (II) or worse, as defined by the Office of the Comptroller of the Currency in its “Rating Credit Risk” Comptroller’s Handbook.

Charitable Contributions

Annual contributions in any of the last three calendar years from the Company and/or the Citi Foundation to a charitable organization of which a Director, or an immediate family member who shares the Director’s household, serves as a Director, trustee, or executive officer (other than the Citi Foundation and other charitable organizations sponsored by the Company) may not exceed the greater of $250,000 or 10% of the charitable organization’s annual consolidated gross revenue.


Employment/Affiliations

● A Director shall not:


(i)
be or have been an employee of the Company within the last three years;

(ii)
be part of, or within the past three years have been part of, an interlocking directorate in which a current executive officer of the Company serves or has served on the compensation committee of a company that concurrently employs or employed the Director as an executive officer; or

(iii)
be or have been affiliated with or employed by (a) the Company’s present or former primary outside auditor, or (b) any other outside auditor of the Company and personally worked on the Company’s audit, in each case within the three-year period following the auditing relationship.


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28 CORPORATE GOVERNANCE


● A Director may not have an immediate family member who:


(i)
is an executive officer of the Company or has been within the last three years;

(ii)
is, or within the past three years has been, part of an interlocking directorate in which a current executive officer of the Company serves or has served on the compensation committee of a company that concurrently employs or employed such immediate family member as an executive officer; or

(iii)
(a) is a current partner of the Company’s outside auditor, or a current employee of the Company’s outside auditor and personally works on the Company’s audit, or (b) was within the last three years (but is no longer) a partner of or employed by the Company’s outside auditor and personally worked on the Company’s audit within that time.


Immaterial Relationships and Transactions

The Board may determine that a Director is independent notwithstanding the existence of an immaterial relationship or transaction between the Company and (i) the Director, (ii) an immediate family member of the Director, or (iii) the Director’s or immediate family member’s business or charitable affiliations, provided the Company’s Proxy Statement includes a specific description of such relationship as well as the basis for the Board’s determination that such relationship does not preclude a determination that the Director is independent. Relationships or transactions between the Company and (i) the Director, (ii) an immediate family member of the Director, or (iii) the Director’s or immediate family member’s business or charitable affiliations that comply with the Corporate Governance Guidelines, including but not limited to the Director Independence Standards that are part of the Corporate Governance Guidelines and the sections titled Financial Services, Personal Loans and Investments/Transactions, are deemed to be categorically immaterial and do not require disclosure in the Proxy Statement (unless such relationship or transaction is required to be disclosed pursuant to Item 404 of SEC Regulation S-K).

Definitions

For purposes of the Corporate Governance Guidelines, (i) the term “immediate family member” means a Director’s or executive officer’s (designated as such pursuant to Section 16 of the Securities Exchange Act of 1934) spouse, parents, step-parents, children, step-children, siblings, mother- and father-in law, sons- and daughters-in-law, brothers- and sisters-in-law, and any person (other than a tenant or domestic employee) who shares the Director’s household; (ii) the term “primary business affiliation” means an entity of which the Director or executive officer, or an immediate family member of such a person, is an officer, partner, or employee or in which the Director, executive officer, or immediate family member owns directly or indirectly at least a 5% equity interest; and (iii) the term “related party transaction” means any financial transaction, arrangement, or relationship in which (a) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, (b) the Company is a participant, and (c) any related person (any Director, any executive officer of the Company, any nominee for Director, any stockholder owning in excess of 5% of the total equity of the Company, and any immediate family member of any such person) has or will have a direct or indirect material interest.

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CORPORATE GOVERNANCE 29



Meetings of the Board of Directors and Committees



The Board of Directors met 19 times in 2017. During 2017, the Audit Committee met 19 times, the Ethics and Culture Committee met 4 times, the Nomination, Governance and Public Affairs Committee met 9 times, the Operations and Technology Committee met 5 times, the Personnel and Compensation Committee met 12 times, and the Risk Management Committee met 12 times. In addition, a subcommittee of the Risk Management Committee met 10 times. The Executive Committee met once in 2017.

During 2017, substantially all of the members of the Board served on and/or chaired a number of ad hoc committees covering such topics as compliance and M&A matters or served on an international subsidiary board. In addition, during 2017, Mses. Costello and Ireland and Messrs. Hennes, McQuade, Santomero, and Turley, at one time or another, served on the Board of Directors of Citibank, N.A., which is a wholly owned subsidiary of Citi.

Each incumbent Director attended at least 75% of the meetings of the Board and of the standing committees of which he or she was a member during 2017.

Meetings of Non-Management Directors

Citi’s non-management Directors meet in executive session without any management Directors in attendance each time the full Board convenes for a regularly scheduled meeting, which is usually six times each year, and, if the Board convenes a special meeting, the non-management Directors ordinarily meet in executive session. During 2017, Mr. O’Neill presided at each executive session of the non-management Directors. In addition, the independent Directors met in executive session during 2017.

Board Leadership Structure

Citi currently has an independent Chairman separate from the CEO, a structure that has been in place since 2009. The Board believes it is important to maintain flexibility in its Board leadership structure and has had in place different leadership structures over the past years, depending on the Company’s needs at the time, but firmly supports having an independent Director in a Board leadership position at all times. Accordingly, Citi’s Board, on December 15, 2009, adopted a By-law amendment which provides that if Citi does not have an independent Chairman, the Board shall elect a lead independent Director having similar duties to an independent Chairman, including leading the executive sessions of the non-management Directors at Board meetings. Citi’s Chairman provides independent leadership of the Board. Having an independent Chairman or Lead Director enables non-management Directors to raise issues and concerns for Board consideration without immediately involving management. The Chairman or Lead Director also serves as a liaison between the Board and senior management. Citi’s Board has determined that the current structure, an independent Chair separate from the CEO, is the most appropriate structure at this time, while ensuring that, at all times, there will be an independent Director in a Board leadership position. The Board believes its approach to risk oversight, including, importantly, having a standing Risk Management Committee and the reporting line of the Chief Risk Officer to the Risk Management Committee, ensures that the Board can choose many leadership structures without experiencing a material impact on its oversight of risk.

Citi has had an independent Chairman since 2009.

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30 CORPORATE GOVERNANCE

Board Diversity

Diversity is among the critical factors that the Nomination, Governance and Public Affairs Committee considers when evaluating the composition of the Board. For a company like Citi, which operates in more than 100 countries around the globe, diversity includes race, ethnicity, and gender as well as the diversity of the communities and geographies in which Citi operates. Included in the qualifications for Directors listed in the Company’s Corporate Governance Guidelines is “whether the candidate has special skills, expertise and background that would complement the attributes of the existing Directors, taking into consideration the diverse communities and geographies in which the Company operates.” Citi’s Board is committed to ensuring that it is composed of individuals whose backgrounds reflect the diversity represented by our employees, customers, and stakeholders. The candidates nominated for election at Citi’s 2018 Annual Meeting exemplify that diversity: five nominees are women and three nominees are African-American or Hispanic. In addition, each Director candidate contributes to the Board’s overall diversity by providing a variety of perspectives, personal and professional experiences, and backgrounds, as well as other characteristics, such as global and international business experience. The Board believes that the current nominees reflect an appropriate diversity of gender, age, race, geographical background, and experience and is committed to continuing to consider diversity issues in evaluating the composition of the Board.



Board Self-Assessment Process


Annual Board Self-Evaluations*

The Board conducts annual evaluations through the use of a written questionnaire that covers a broad range of matters relating to governance, meetings, materials, and agenda topics.



Summary of the Written Evaluations

Citi’s Corporate Governance Office aggregates and summarizes our Directors’ responses to the questionnaires, highlighting comments and high and low scores on various topics. Responses are not attributed to specific Board members to promote candor. The aggregated results, including all written comments, together with data analyzing trends or results over prior years are shared with the Board.



Board Review

Using the aggregated results as a guide, our Chairman leads a discussion with the full Board during an executive session. All Board members are encouraged to provide feedback on the results.



Actions

As an outcome of these discussions, the Board takes specific actions which may include providing guidance to management on specific Board-related initiatives.



*
Each standing committee conducts an annual self-evaluation and reports the results to the Board, which includes how each committee’s effectiveness may be enhanced.


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CORPORATE GOVERNANCE 31

Board’s Role in Risk Oversight

The Board oversees Citi’s global risk management framework.



Risk Management Committee

●reviews risk management and compliance policies and programs for Citi and its subsidiaries

●approves and adjusts risk limits

●consults with management on the effectiveness of risk identification, measurement, and monitoring processes, and the adequacy of staffing and action plans

●provides oversight of, among others, matters related to Citi’s Comprehensive Capital Analysis and Review (CCAR) practices, Resolution and Recovery Planning, cybersecurity and Citi’s compliance with the Volcker Rule of the Dodd-Frank Act







Chief Risk Officer

●delivers risk report at regularly scheduled Board meetings

●responsible for Global Risk Management

●responsible for an integrated effort to identify, assess, and manage risks

●reports to the Chief Executive Officer and Risk Management Committee

●reports at least twice annually to the Personnel and Compensation Committee on incentive compensation

Board Committees:

Audit Committee

●provides oversight of compliance risk, cybersecurity risk, fraud risk, and operational risk matters


Ethics and Culture Committee

●provides oversight of Citi’s Conduct Risk Governance Program


Nomination, Governance and Public Affairs Committee


●provides oversight of reputational issues and legal and regulatory compliance risks as they relate to Corporate Governance matters


Operations and Technology Committee

●provides oversight of cybersecurity as well as privacy and data security


Personnel and Compensation Committee

●provides oversight of incentive compensation plans and risk related to compensation and conduct risk matters











At each regularly scheduled Board meeting, the Board receives a risk report from the Chief Risk Officer with respect to the Company’s approach to management of major risks, including management’s risk mitigation efforts, where appropriate. Global Risk Management, led by the Chief Risk Officer, is a company-wide function that is responsible for an integrated effort to identify, assess, and manage risks that may affect Citi’s ability to execute on its corporate strategy and fulfill its business objectives. The Board’s role is to oversee this effort.

The Risk Management Committee enhances the Board’s oversight of risk management. The Committee’s role is one of oversight, recognizing that management is responsible for executing Citi’s risk management policies.

Board’s Role in Cybersecurity Oversight

The Board of Directors provides oversight of management’s efforts to address cybersecurity risk through the periodic receipt of reports at meetings of the Risk Management Committee, the Audit Committee, and the Operations and Technology Committee, as well as presentations at the Board level. The reports the Board and its Committees receive focus on the threat environment and vulnerability assessments, as well as specific cyber incidents and management’s efforts to monitor, detect and prevent cyber threats to Citi.

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32 CORPORATE GOVERNANCE

Committees of the Board of Directors

The following are the standing committees of the Board of Directors:


Audit Committee


Members:

Ellen M. Costello
John C. Dugan
Peter B. Henry
Anthony M. Santomero
James S. Turley (Chair)
Deborah C. Wright

Committee Meetings
in 2017:

19

Charter:

The Audit Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”

Committee Roles and Responsibilities:

The Audit Committee assists the Board in fulfilling its oversight responsibility relating to:

●the integrity of Citigroup’s consolidated financial statements, financial reporting process, and systems of internal accounting and financial controls;

●the performance of the internal audit function (“Internal Audit”);

●the annual independent integrated audit of Citigroup’s consolidated financial statements and effectiveness of Citigroup’s internal control over financial reporting, the engagement of the independent registered public accounting firm (“Independent Auditors”), and the evaluation of the Independent Auditors’ qualifications, independence and performance;

●policy standards and guidelines for risk assessment and risk management;

●Citigroup’s compliance with legal and regulatory requirements, including Citigroup’s disclosure controls and procedures; and

●the fulfillment of the other responsibilities set out in the Audit Committee’s charter. The report of the Committee required by the rules of the SEC is included in this Proxy Statement.

The Board has determined that each of Ms. Costello and Messrs. Dugan, Santomero and Turley qualifies as an “audit committee financial expert” as defined by the SEC and each such Director as well as Ms. Wright and Mr. Henry is considered “financially literate” under NYSE rules, and, in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each is independent within the meaning of applicable SEC rules, the corporate governance rules of the NYSE, and the FDIC guidelines.


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CORPORATE GOVERNANCE 33



Ethics and Culture
Committee


Members:

Franz B. Humer (Chair)
Michael E. O’Neill
Deborah C. Wright
Ernesto Zedillo
Ponce de Leon

Committee Meetings
in 2017:

4

Charter:

The Ethics and Culture Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”

Committee Roles and Responsibilities:

The Ethics and Culture Committee oversees Management’s efforts to foster a culture of ethics within the organization; oversees and helps shape the definition of Citi’s value proposition; oversees Management’s efforts to enhance and communicate Citi’s value proposition, evaluates Management’s progress, and provides feedback on these efforts; reviews and assesses the culture of the organization to determine if further enhancements are needed to foster ethical decision-making by employees; and oversees Management’s efforts to support ethical decision-making in the organization, evaluates Management’s progress, and provides feedback on these efforts. The Committee also reviews and assesses the adequacy of Citi’s Code of Conduct and Code of Ethics for Financial Professionals and approves any waivers to either Code. The Committee also provides oversight of Citi’s Conduct Risk Program, whose objective is to enhance Citi’s culture of compliance and control through the management, minimization, and mitigation of Citi’s conduct risks.




Executive Committee


Members:

Duncan P. Hennes
Franz B. Humer
Michael E. O’Neill (Chair)
Anthony M. Santomero
Diana L. Taylor
James S. Turley

Committee Meetings
in 2017:

1

Committee Roles and Responsibilities:

The Executive Committee acts on behalf of the Board if a matter requires Board action before a meeting of the full Board can be held.


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34 CORPORATE GOVERNANCE



Nomination,
Governance and
Public Affairs
Committee


Members:

John C. Dugan
Peter B. Henry
Michael E. O’Neill
Diana L. Taylor (Chair)
Ernesto Zedillo
Ponce de Leon

Committee Meetings in 2017:

9

Charter:

The Nomination, Governance and Public Affairs Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”

Committee Roles and Responsibilities:

The Nomination, Governance and Public Affairs Committee is responsible for identifying individuals qualified to become Board members and recommending to the Board the Director nominees for the next Annual Meeting of stockholders. It leads the Board in its annual review of the Board’s performance and makes recommendations as to the composition of the committees for appointment by the Board. The Committee takes a leadership role in shaping corporate governance policies and practices, including recommending to the Board the Corporate Governance Guidelines and monitoring Citi’s compliance with these policies and practices and the Guidelines. The Committee is responsible for reviewing and approving all related party transactions involving a Director or an immediate family member of a Director and any related party transaction involving an executive officer or immediate family member of an executive officer if the transaction is valued at $50 million or more, in each case, other than certain enumerated ordinary course transactions. See Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation on pages 38-40 of this Proxy Statement for a complete description of the Policy on Related Party Transactions. The Committee, as part of the Board’s executive succession planning process, in conjunction with the Personnel and Compensation Committee, evaluates and nominates potential successors to the CEO and provides an annual report to the Board on CEO succession. The Committee also reviews Director Compensation and Benefits. The Committee is also responsible for reviewing Citi’s policies and programs that relate to public issues of significance to Citi and the public at large and reviewing relationships with external constituencies and issues that impact Citi’s reputation. The Committee also has the responsibility for reviewing public policy and reputational issues facing Citi; reviewing political contributions and lobbying expenditures and payments to trade associations made by Citi, and charitable contributions made by Citi and the Citi Foundation; reviewing Citi’s policies and practices regarding supplier diversity; reviewing the work of Citi’s Business Practices Committees; and reviewing Citi’s Citizenship and Sustainability policies and programs, including environmental and human rights policies. The Committee’s focus is global, reflecting Citi’s global footprint. The Committee also makes recommendations to the Board regarding amendments to the Company’s Major Expenditure Program – Limits of Authority.

The Board has determined that, in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each of the members of the Nomination, Governance and Public Affairs Committee is independent according to the corporate governance rules of the NYSE.


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Operations and
Technology
Committee


Members:

Ellen M. Costello
S. Leslie Ireland
Renée J. James
Gary M. Reiner (Chair)

Committee Meetings
in 2017:

5

Charter:

The Operations and Technology Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”

Committee Roles and Responsibilities:

The Operations and Technology Committee oversees the scope, direction, quality, and execution of Citi’s technology strategies formulated by management, and provides guidance on technology as it may pertain to, among other things, Citi business products and technology platforms.


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36 CORPORATE GOVERNANCE



Personnel and
Compensation
Committee


Members:

Duncan P. Hennes (Chair)
Michael E. O’Neill
Gary M. Reiner
Diana L. Taylor

Committee Meetings
in 2017:

12

Charter:

The Personnel and Compensation Committee Charter is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”

Committee Roles and Responsibilities:

The Personnel and Compensation Committee has been delegated broad authority to oversee compensation of employees of the Company and its subsidiaries and affiliates. The Committee regularly reviews Citi’s management resources and performance of senior management. The Committee is responsible for determining the compensation for the CEO and approving the compensation of other executive officers of the Company and members of Citi’s Operating Committee. The Committee is also responsible for approving the incentive compensation structure for other members of senior management and certain highly compensated employees (including discretionary incentive awards to covered employees as defined in applicable bank regulatory guidance), in accordance with guidelines established by the Committee from time to time. The Committee also has broad oversight of compliance with bank regulatory guidance governing Citi’s incentive compensation.

The Committee annually reviews and discusses the Compensation Discussion and Analysis required to be included in the Company’s Proxy Statement with management, and, if appropriate, recommends to the Board that the Compensation Discussion and Analysis be included. Additionally, the Committee reviews and approves the overall goals of Citi’s material incentive compensation programs, including as expressed through Citi’s Compensation Philosophy, and provides oversight for Citi’s incentive compensation programs so that they both (i) appropriately balance risk and financial results in a manner that does not encourage employees to expose Citi to imprudent risks, and (ii) are consistent with bank safety and soundness. Toward that end, the Committee meets periodically with Citi’s Chief Risk Officer to discuss the risk attributes of Citi’s incentive compensation programs.

The Committee has the power to hire and fire independent compensation consultants, legal counsel, or financial or other advisors as it may deem necessary to assist it in the performance of its duties and responsibilities, without consulting or obtaining the approval of senior management of the Company. The Committee has retained Frederic W. Cook & Co. (FW Cook) to provide the Committee with advice on Citi’s compensation programs for senior management. The amount paid to FW Cook in 2017 is disclosed in the Compensation Discussion and Analysis on page 102 of this Proxy Statement.

The Board has determined that in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each of the members of the Personnel and Compensation Committee is independent according to the corporate governance rules of the NYSE. Each of such Directors is a “non-employee Director,” as defined in Section 16 of the Securities Exchange Act of 1934, as amended (the Exchange Act), and is an “outside Director,” as defined by Section 162(m) of the Internal Revenue Code.


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Risk Management
Committee


Members:

John C. Dugan
Duncan P. Hennes
Franz B. Humer
Renée J. James
Eugene M. McQuade
Michael E. O’Neill
Anthony M. Santomero (Chair)
James S. Turley
Ernesto Zedillo
Ponce de Leon

Committee Meetings
in 2017:

12

Charter:

The Risk Management Committee Charter is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”

Committee Roles and Responsibilities:

The Risk Management Committee has been delegated authority to assist the Board in fulfilling its responsibility with respect to (i) oversight of Citigroup’s risk management framework, including the significant policies and practices used in managing credit, market, operational, and certain other risks, (ii) oversight of Citigroup’s policies and practices relating to funding risk, liquidity risk, and price risk, which constitute significant components of market risk, and risks pertaining to capital management, and (iii) oversight of the performance of the Fundamental Credit Risk (“FCR”) credit review function. The Committee reports to the Board of Directors regarding Citigroup’s risk profile and its risk management framework, including the significant policies and practices employed to manage risks in Citigroup’s businesses, and the overall adequacy of the Risk Management function. The Committee provides oversight of Citi’s CCAR and Resolution and Recovery Planning Compliance efforts. The Committee also reviews risk related to information security and cybersecurity, including steps taken by management to control such risks, and coordinates with the Personnel and Compensation Committee in relation to that committee’s role with respect to risk matters related to compensation.

The Risk Management Committee created a subcommittee in 2016 to provide oversight of data governance, data quality, and data integrity. Ms. James and Messrs. Santomero (Chair) and Turley are members of the Risk Subcommittee. The Risk Subcommittee met 10 times in 2017.



Audit Ethics and
Culture Executive Nomination,
Governance
and Public
Affairs Operations
and
Technology Personnel and
Compensation Risk
Management
Michael L. Corbat
Ellen M. Costello ● ●
John C. Dugan ● ● ●
Duncan P. Hennes ● ● ●
Peter B. Henry ● ●
Franz B. Humer ● ● ●
S. Leslie Ireland ●
Renée J. James ● ●
Eugene M. McQuade ●
Michael E. O’Neill ● ● ● ● ●
Gary M. Reiner ● ●
Anthony M. Santomero ● ● ●
Diana L. Taylor ● ● ●
James S. Turley ● ● ●
Deborah C. Wright ● ●
Ernesto Zedillo
Ponce de Leon ● ● ●

● committee member
● committee chair


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38 CORPORATE GOVERNANCE

Involvement in Certain Legal Proceedings

There are no legal proceedings to which any Director, officer, or principal stockholder, or any affiliate thereof, is a party adverse to Citi or in which any such person has a material interest adverse to Citi.

Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation

The Board has adopted a policy setting forth procedures for the review, approval, and monitoring of transactions involving Citi and related persons (Directors, Senior Managers, 5% stockholders, Immediate Family Member or Primary Business Affiliations). A copy of Citi’s Policy on Related Party Transactions is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citi Policies.” Under the policy, the Nomination, Governance and Public Affairs Committee is responsible for reviewing and approving all related party transactions involving related persons. Directors may not participate in any discussion or approval of a related party transaction in which he or she or any member of his or her immediate family is a related person, except that the Director must provide all material information concerning the related party transaction to the Nomination, Governance and Public Affairs Committee. The Nomination, Governance and Public Affairs Committee is also responsible for reviewing and approving all related party transactions valued at more than $50 million involving an executive officer or an Immediate Family Member of an executive officer. The Transaction Review Committee, composed of Citi’s President, General Counsel, Chief Financial Officer, Chief Compliance Officer, Chief Risk Officer, and Head of Human Resources, is responsible for reviewing and approving all related party transactions valued at less than $50 million involving an executive officer or an Immediate Family Member of an executive officer. The policy also contains a list of categories of transactions involving related persons that are pre-approved under the policy, and therefore need not be brought to the Nomination, Governance and Public Affairs Committee or the Transaction Review Committee for approval.

The Nomination, Governance and Public Affairs Committee and the Transaction Review Committee will review the following information when assessing a related party transaction:

● the terms of such transaction;
● the related person’s interest in the transaction;
● the purpose and timing of the transaction;
● whether Citi is a party to the transaction, and if not, the nature of Citi’s participation in the transaction;
● if the transaction involves the sale of an asset, a description of the asset, including date acquired and cost basis;
● information concerning potential counterparties in the transaction;
● the approximate dollar value of the transaction and the approximate dollar value of the related person’s interest in the transaction;
● a description of any provisions or limitations imposed as a result of entering into the proposed transaction;
● whether the proposed transaction includes any potential reputational risk issues that may arise as a result of, or in connection with, the proposed transaction; and
● any other relevant information regarding the transaction.

Based on information contained in a Schedule 13G filed with the SEC, BlackRock and Vanguard reported that they beneficially owned 5% or more of the outstanding shares of Citi’s common stock as of December 31, 2017 — see Stock Ownership — Owners of More than 5% of Citi Common Stock in this Proxy Statement on page 45. During 2017, our subsidiaries provided ordinary course lending, trading, and other financial services to BlackRock and Vanguard and their respective affiliates and clients. These transactions were entered into on an arm’s length basis and contain customary terms and conditions and were on substantially the same terms as comparable transactions with unrelated third parties. Acciones y Valores Banamex, S.A. de C.V., Servicios Corporativos de Finanzas, S.A. de C.V., and Grupo Financiero Citibanamex, S.A. de C.V. (“Citibanamex”) entered into a transaction with BlackRock, Inc. and certain of its affiliates (“BlackRock”) pursuant to which Blackrock would acquire the asset management business of Citibanamex in Mexico. The transaction includes the sale of Impulsora de Fondos Banamex, S.A. de C.V., (“Impulsora”) legal vehicle, and its advisory role for 53 mutual funds and certain managed account relationships,

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and certain intellectual property and vendor contracts required to operate the business. The signing of the purchase and sale agreement occurred on November 27, 2017 and the closing of the sale is expected in the second half of 2018, subject to regulatory approvals and customary closing conditions. Consideration for the sale consists of $350 million to be paid upon closing and certain future payments if defined targets are met. Citibanamex and Blackrock will also enter into a long term distribution agreement upon the closing of the transaction to offer BlackRock asset management products to Citibanamex clients in Mexico. The agreement provides a framework under which Citibanamex would distribute BlackRock products in Mexico and includes terms relating to pricing, preferential access, and product support. Based on information contained in a Schedule 13G filed with the SEC, Blackrock reported that it beneficially owns 7.1% of Citi’s common stock as of December 31, 2017. The Nomination, Governance and Public Affairs Committee reviewed the terms of the sale and approved the transaction in accordance with the Related Party Transaction Policy.

Citi has established funds in which employees have invested. In addition, certain of our executive officers have from time to time invested their personal funds directly, or directed that funds for which they act in a fiduciary capacity be invested, in funds arranged by Citi’s subsidiaries on the same terms and conditions as the other outside investors in these funds, who are not our executive officers, or employees. Other than certain “grandfathered” investments, in accordance with Sarbanes-Oxley and the Citi Corporate Governance Guidelines, executive officers may invest in certain Citi-sponsored investment opportunities only under certain circumstances and with the approval of the appropriate committee.

Citigroup Employee Fund of Funds I, L.P., Citigroup Capital Partners II, L.P., and Citigroup Venture Capital International Growth Partnership II, L.P. are funds that were formed in 2000, 2006 and 2007, respectively. They invest either directly or via a master fund in private equity investments. Citi matches each dollar invested by an employee with an additional two-dollar commitment to each fund, or feeder fund, in which an employee has invested. Citi’s match is made by a loan to the fund. Each eligible employee, subject to vesting, receives the benefit of any increase in the value of the fund attributable to the loan made by Citi, less the interest paid by the fund on the loan, as well as any increase in the value of the fund attributable to the employee’s own investment. In accordance with the fund’s offering memoranda, executive officers are not eligible to participate in the fund on a leveraged basis.

The following distributions exceeding $120,000 with respect to investments in Citigroup Employee Fund of Funds I, L.P., Citigroup Capital Partners II, L.P., and Citigroup Venture Capital International Growth Partnership II, L.P. were made to executive officers in 2017. Citigroup Employee Fund of Funds I, L.P. and Citigroup Capital Partners I, L.P. closed in 2017 and all distributions were made to the participants.

Citigroup Employee
Fund of Funds I, L.P.
Cash Distributions
James Forese $153,721

Citigroup Capital
Partners II, L.P.
Cash Distributions
James Cowles $162,964
James Forese $189,073

Citigroup Venture Capital
International Growth
Partnership II, L.P.
Cash Distributions
James Cowles $169,989

In 2017, Citi performed corporate banking and securities brokerage services in the ordinary course of our business for certain organizations in which some of our Directors are officers or directors. In addition, in the ordinary course of business, Citi may use the products or services of organizations in which some of our Directors are officers or directors.

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The persons listed on page 103 of this Proxy Statement are the current members of the Personnel and Compensation Committee. No current or former member of the Personnel and Compensation Committee was a part of a “compensation committee interlock” during fiscal year 2017 as described under SEC rules. In addition, none of our executive officers served as a director or member of the compensation committee of another entity that would constitute a “compensation committee interlock.” No member of the Personnel and Compensation Committee had any material interest in a transaction with Citi or is a current or former officer of Citi, and no member of the Personnel and Compensation Committee is a current employee of Citi or any of its subsidiaries. In addition, no member of the Board, or any immediate family member of the Board, engaged FW Cook for any compensation-related services in 2017.

Mr. Corbat has entered into an Aircraft Time Sharing Agreement with Citigroup Inc. that allows him to reimburse Citi for the cost of his personal use of corporate aircraft based on the aggregate incremental cost of the flight to Citi. Aggregate incremental cost is calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent service or, if higher, the charge allowed under Federal Aviation Regulation 91.501(d). Mr. Corbat reimbursed Citi $239,978 related to his personal use of corporate aircraft during 2017.

In 2017, certain previously awarded Capital Accumulation Program shares granted to Mr. McQuade when he was an employee of Citigroup vested. Mr. McQuade’s 11,099 shares of Citi common stock awarded under the Capital Accumulation Program vested on January 20, 2018, representing the deferred portion of Mr. McQuade’s annual incentive awards for 2014, which were awarded to him under the Capital Accumulation Program. These shares are reported in the Beneficial Ownership Table on page 44 of this Proxy Statement.

An adult child of Mr. Humer, a Director, is employed by Citi’s Institutional Clients Group and received 2017 compensation of $906,062. An adult child of John Gerspach, Citi’s CFO, is employed in Citi’s Compliance function and received 2017 compensation of $144,000. The compensation for these employees was established by Citi in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. Mr. Humer and Mr. Gerspach do not have an interest in the employment relationship of, nor do they share a household with, their respective family members who are employees of Citi.

Indebtedness

Other than certain “grandfathered” margin loans, in accordance with Sarbanes-Oxley and the Citi Corporate Governance Guidelines, no margin loans may be made to any executive officer unless such person is an employee of a broker-dealer subsidiary of Citi and such loan is made in the ordinary course of business.

Certain transactions in excess of $120,000 involving loans, deposits, credit cards, and sales of commercial paper, certificates of deposit, and other money market instruments and certain other banking transactions occurred during 2017 between Citibank, N.A. and other Citi banking subsidiaries on the one hand, and certain Directors or executive officers of Citi, members of their immediate families, corporations or organizations of which any of them is an executive officer or partner or of which any of them is the beneficial owner of 10% or more of any class of securities, or associates of the Directors, the executive officers or their family members, on the other. The transactions were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, that prevailed at the time for comparable transactions with other persons not related to the lender and did not involve more than the normal risk of collectability or present other unfavorable features. Personal loans made to any Director or an executive officer must comply with Sarbanes-Oxley, Regulation O, and the Corporate Governance Guidelines, and must be made in the ordinary course of business.

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Business Practices Committees

The business practices committees for each of Citi’s businesses and regions review business activities, sales practices, product design, potential conflicts of interest, and other franchise or reputational risk issues escalated to these committees. The business practices committee at the corporate level reviews issues escalated by business practices committees at the business or regional level that may present franchise, reputational, and/or systemic risks. All reviews by the business practices committees are conducted with due consideration of the context and facts presented to the committees.

The business practices committees, which are composed of our most senior executives, provide the guidance necessary for Citi’s business practices to meet the highest standards of professionalism, integrity, and ethical behavior consistent with Citi’s Mission and Value Proposition. Our business leaders, in addition to confirming our commitment to the principles of responsible finance and protecting Citi’s franchise, are responsible for establishing a framework for compliance with applicable laws and regulations, Citi policies, and ethical standards.

Business practices concerns may be raised through a variety of sources, including business practices working groups, other in-business committees, or the control functions. Relevant issues from the business practices committees are reported on a regular basis to the Nomination, Governance and Public Affairs Committee of the Board.

Conduct and Culture

At Citi, our mission is to serve as a trusted partner to our clients by responsibly providing financial services that enable growth and economic progress.

We foster a culture of ethics through our governance framework, programs and efforts that embed our culture and expectations for behavior throughout the organization, and collaboration with key stakeholders outside Citi to improve Citi’s and the banking industry’s culture.

Governance over Conduct and Culture

The cornerstone of our approach to conduct and culture is our governance framework, which begins with a strong “tone from the top” starting with the Citigroup Board of Directors. In 2014, Citi’s Board established a standing Ethics and Culture Committee of the Board to oversee senior management’s ongoing efforts to foster a culture of ethics throughout Citi. The Chairman of the Citi Board is a member of the Ethics and Culture Committee. For more information, please see the Ethics and Culture Committee Charter, which is set forth on Citi’s website at www.citigroup.com.

Among its first actions taken in 2014, the Ethics and Culture Committee directed Citi senior management to undertake a review of Citi’s culture. Since that time, with oversight from the Ethics and Culture Committee, senior management has undertaken a number of efforts in support of Citi’s culture, including developing Citi’s Mission and Value Proposition and Leadership Standards. On an ongoing basis, the Ethics and Culture Committee remains responsible for overseeing senior management’s efforts to reinforce and enhance a culture of ethics within Citi, including by:

● Overseeing efforts to enhance and communicate Citi’s Mission and Value Proposition, evaluating management’s progress, and providing feedback on these efforts;
● Reviewing and assessing Citi’s culture to determine if further enhancements are needed to foster ethical decision-making by employees and overseeing efforts to support ethical decision-making by employees;
● Reviewing Citi’s Code of Conduct and Code of Ethics for Financial Professionals; and
● Reviewing Citi’s Conduct Risk Program.

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Programs and Efforts that Embed Culture

To promote ethical conduct and enhance Citi’s culture, Citi focuses on empowering individuals by establishing global policies, programs, and processes that embed our values throughout the organization and guide and support our employees in making ethical decisions and adhering to Citi’s standards of conduct. Under the oversight of and with input and feedback from the Ethics and Culture Committee, senior management has prioritized a number of efforts to further embed our values and conduct expectations into the organization. The following are a few examples of our programs and associated efforts to set, reinforce, and embed our culture at Citi:


Communications and awareness efforts concerning our Mission and Value Proposition, including Citi-wide videos from senior management articulating our core principles and providing examples of these principles in action.


Embedding the Leadership Standards into key aspects of our employee life cycle, such as hiring and performance reviews.


Our global Conduct Risk Program, which we continue to implement across businesses and control functions to manage and mitigate conduct risk, or intentional or negligent actions of employees or agents that may lead to negative outcomes for customers, clients, and markets.


Training of employees on key culture-related themes, including on our Code of Conduct, ethical decision-making, and the importance of leadership.


Collaboration with Key Stakeholders

At Citi, we partner with key stakeholders on ways to collectively enhance culture in the banking industry. In 2017, we, along with industry leaders and regulators, participated in a Federal Reserve Bank of New York workshop on measuring and assessing culture and behavior in the financial services industry. Representatives from Citi’s Board, including the Chair of the Ethics and Culture Committee, and Citi senior management have participated in Federal Reserve Bank of New York workshops on culture and behavior since their inception in 2014. Additionally, at the start of 2018, 14 leading financial institutions, including Citi, organized a one-day symposium in London to discuss the dynamics of culture at financial institutions. This symposium brought together a range of stakeholders, including senior leaders from across the industry, regulators, and thought leaders to share their insights on financial industry culture. The United Kingdom Citi Country Officer served as a contributor at this symposium.

Finally, Citi is also a member of the Banking Standards Board in the United Kingdom (“BSB”). Together with over 32 member firms, Citi supports the BSB’s independent role to help rebuild trust and confidence across the U.K. banking industry by promoting high ethical and professional standards for behavior and competence. We remain engaged with the BSB directly through Citi’s U.K. senior management.

Code of Ethics for Financial Professionals

The Citi Code of Ethics for Financial Professionals applies to Citi’s Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer), Controller (Principal Accounting Officer), and all finance professionals and administrative staff in a finance role, including Controllers, CSS Finance & Risk Operations, Financial Planning & Analysis, Treasury, Tax, Strategy and M&A, Investor Relations, and the Regional/Business teams. Citi expects all of its employees to act in accordance with the highest standards of personal and professional integrity in all aspects of their activities, to comply with all applicable laws, rules, and regulations, to deter wrongdoing, and abide by the Citi Code of Conduct and other policies and procedures adopted by Citi that govern the conduct of its employees. The Code of Ethics is intended to supplement the Citi Code of Conduct. A copy of the Code of Ethics is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Code of Ethics for Financial Professionals.” We will disclose amendments to, or waivers from, the Code of Ethics, if any, on our website.

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Ethics Hotline

Citi expects employees to raise concerns or questions regarding ethics, discrimination or harassment matters, and to promptly report suspected violations of these and other applicable laws, regulations, rules, Citi policies, procedures, standards, or the Citi Code of Conduct. Citi offers several channels by which employees and others may report ethical concerns, including concerns about accounting, internal controls, or auditing matters. We provide a global Ethics Hotline, a toll-free number that is available 24 hours a day, seven days a week, 365 days a year, and is staffed by live operators who can connect to translators to accommodate multiple languages.

Calls to the Ethics Hotline are received by a third-party vendor, located in the United States, which reports the calls to the Citi Ethics Office for handling. Ethical concerns may also be reported through a dedicated e-mail address, multilingual website submission, fax line, and conventional mailing address. Any individual may also raise a concern by accessing Citi’s public-facing corporate website. Individuals may choose to remain anonymous to the extent permitted by applicable laws and regulations. We prohibit retaliatory actions against anyone who raises concerns or questions in good faith, or who participates in a subsequent investigation of such concerns. The Ethics Office reports on concerns it receives via the Citi Ethics Hotline to the Audit Committees of the Board of Directors of Citigroup Inc. and Citibank, N.A. on a quarterly basis.

Code of Conduct

The Board has adopted a Code of Conduct, which provides an overview of the laws, regulations, and Citi policies and procedures applicable to the activities of Citi, and sets forth Citi’s Mission and Value Proposition, as well as the standards of ethics and professional behavior expected of employees and representatives of Citi. The Code of Conduct applies to every Director, officer, and employee of Citi and its consolidated subsidiaries. All Citi employees, directors, and officers are required to read and comply with the Code of Conduct. In addition, other persons performing services for Citi may be subject to the Code of Conduct by contract or other agreement. The Code of Conduct is publicly available in multiple languages at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Code of Conduct.”

Communications with the Board

Stockholders or other interested parties who wish to communicate with a member or members of the Board, including the Chairman or the non-management Directors as a group, may do so by addressing their correspondence to the Board member or members, c/o the Corporate Secretary, Rohan Weerasinghe, Citigroup Inc., 388 Greenwich Street, New York, NY 10013. The Board of Directors has approved a process pursuant to which the office of the Corporate Secretary will review and forward correspondence to the appropriate person or persons for response.

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Stock Ownership

Citi has long encouraged stock ownership by its Directors, officers, and employees to align their interests with the long-term interests of stockholders. The Board and executive officers are subject to a stock ownership commitment, which requires these individuals to maintain a minimum ownership level of Citigroup stock. Executive officers are required to retain at least 75% of the equity awarded to them as incentive compensation (net of amounts required to pay taxes and option exercise prices) as long as they are executive officers. In addition, a stock holding period applies after the executive officer leaves Citi, or is no longer an executive officer. He or she must retain, for one year after ending executive officer status, 50% of the shares previously subject to the stock ownership commitment. Directors are similarly required to retain at least 75% of the net equity awarded to them, further aligning their interests with stockholders. The Board may revise the terms of the stock ownership commitment from time to time to reflect legal and business developments warranting a change. In addition, Directors and executive officers may not enter into hedging transactions in respect of Citi’s common stock or other securities issued by Citi, including securities granted by the Company to the Director or executive officer as part of his or her compensation and securities purchased or acquired by the Director or executive officer in a non-compensatory transaction.

The following table shows the beneficial ownership of Citi common stock by our Directors and certain executive officers at February 26, 2018. For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person, or group of persons, is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of the date of determination.

BENEFICIAL OWNERSHIP TABLE

Name Common
Stock
Beneficially
Owned
Excluding
Options (1) Options
Exercisable
Within
60 Days Owned by
or Tenant in
Common with
Family Member,
Trust, Mutual
Fund or 401(k) (2) Total
Beneficial
Ownership Receipt
Deferred (3) Total
Ownership
Stephen Bird 146,049 — 95,000 241,049 — 241,049
Michael L. Corbat 279,664 — 1,781 281,445 — 281,445
Ellen M. Costello 11,356 — — 11,356 2,015 13,371
John C. Dugan — — — — 2,515 2,515
James A. Forese 320,022 59,490 — 379,512 — 379,512
Jane Nind Fraser 44,021 — — 44,021 — 44,021
John Gerspach 170,475 — 122,967 293,442 — 293,442
Duncan P. Hennes 13,269 — — 13,269 2,015 15,284
Peter B. Henry 13,754 — — 13,754 2,015 15,769
Franz B. Humer 20,668 — — 20,668 2,015 22,683
S. Leslie Ireland — — — — 2,515 2,515
Renée J. James 6,714 — — 6,714 2,015 8,729
Eugene M. McQuade 78,877 — 48,484 127,361 2,015 129,376
Michael E. O'Neill 107,266 — 55,250 162,516 — 162,516
Gary M. Reiner 24,218 — — 24,218 2,015 26,232
Anthony M. Santomero 36,144 — — 36,144 2,015 38,159
Diana L. Taylor 28,888 — — 28,888 2,015 30,903
James S. Turley 14,395 — — 14,395 2,015 16,410
Deborah C. Wright 2,579 — — 2,579 2,015 4,594
Ernesto Zedillo Ponce de Leon 27,510 — — 27,510 2,015 29,525
Total (29 Directors and
Executive Officers as
a group) 2,366,104 98,472 337,097 2,801,673 29,211 2,830,883

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(1)
The stock reported for certain Directors in this column includes deferred common stock, which is fully vested and which the Director or Directors have the right to acquire within 60 days.

(2)
Stock held as a tenant-in-common with a family member or trust, owned by a family member, held by a trust for which the Director or executive officer is a trustee but not a beneficiary, or held by a mutual fund which invests substantially all of its assets in Citi common stock.

(3)
Amounts represent Directors’ deferred common stock. The deferred common stock becomes distributable approximately on the second anniversary of the date of grant; however, if a Director retired or resigned from the Board during the year when the award was granted, the Director would forfeit a pro rata portion of the award.


At February 26, 2018, no Director or executive officer owned more than 1% of Citi’s common stock.

At February 26, 2018, all of the Directors and executive officers as a group beneficially owned approximately 0.11% of Citi’s common stock.

Mr. Reiner also owns 485 Depositary Shares of Citi’s 5.9% Fixed Rate/Floating Rate Noncumulative Preferred Stock, Series B, which represents 0.065% of such series of preferred stock.

Mr. Don Callahan, an executive officer at Citi, also owns 4,170 Depositary Shares of Citi’s 6.3% Noncumulative Preferred Stock, Series S, which represents 0.010% of such series of preferred stock.

Mr. William Mills, an executive officer at Citi, also owns 1,000 Depositary Shares of Citi’s 5.95% Fixed Rate/Floating Rate Noncumulative Preferred Stock, Series Q, which represents 0.080% of such series of preferred stock.

OWNERS OF MORE THAN 5% OF CITI COMMON STOCK
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
BlackRock, Inc.(a)
55 East 52nd Street, New York, NY 10055 187,623,983 7.1%
The Vanguard Group, Inc.(b)
100 Vanguard Blvd., Malvern, PA 19355 181,464,512 6.86%


(a)
Based on the Schedule 13G filed with the SEC on February 1, 2018 by BlackRock and certain subsidiaries, BlackRock reported that it had sole voting power over 164,468,382 shares and had sole dispositive power over 187,623,983 shares. The Schedule 13G states that the shares are beneficially owned by funds and accounts managed by BlackRock and any economic interests of the securities covered are held by BlackRock for the benefit of the funds and accounts and not for BlackRock’s own account.

(b)
Based on the Schedule 13G filed with the SEC on February 9, 2018 by Vanguard and certain subsidiaries, Vanguard reported that it had sole voting power over 3,734,637 shares; sole dispositive power over 177,227,695 shares; shared voting power over 602,013 shares; and shared dispositive power over 4,236,817 shares. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 2,881,917 shares or .10% of Citi’s common stock as a result of its serving as investment manager of collective trust accounts. In addition, Vanguard Investments Australia, Ltd., a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 2,189,068 shares or .08% of Citi’s common stock as a result of its serving as investment manager of Australian investment offerings.


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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires Citi’s officers and Directors, and persons who own more than 10% of a registered class of Citi’s equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE, and to furnish Citi with copies of the forms. Based on its review of the forms it received, or written representations from reporting persons, Citi believes that, during 2017, each of its officers and Directors complied with all such filing requirements.

Proposal 1: Election of Directors

The Board has nominated all of the current Directors for re-election at the 2018 Annual Meeting. Directors are not eligible to stand for re-election after reaching the age of 72. Ms. S. Leslie Ireland and Mr. John Dugan were elected by the Board in October 2017. Ms. Ireland was identified as a potential Director by Egon Zehnder, the Board’s nominating consultant, and Mr. Dugan was identified as a potential Director by a Board member. If elected, each nominee will hold office until the 2019 Annual Meeting or until his or her successor is elected and qualified.

Director Criteria and Nomination Process

The Nomination, Governance and Public Affairs Committee considers all qualified candidates identified by members of the Nomination, Governance and Public Affairs Committee, by other members of the Board, by senior management, and by security holders. During 2017, the Committee engaged Egon Zehnder to assist in identifying and evaluating potential nominees. Stockholders who would like to propose a Director candidate for consideration by the Nomination, Governance and Public Affairs Committee may do so by submitting the candidate’s name, résumé, and biographical information to the attention of the Corporate Secretary, Rohan Weerasinghe, Citigroup Inc., 388 Greenwich Street, New York, New York 10013. All proposals for nominations received by the Corporate Secretary will be presented to the Committee for its consideration.

In considering the composition of the Board of Directors, the Nomination, Governance and Public Affairs Committee inventories the categories of risks faced by Citi, given its size, business mix, and geographical presence, and seeks to identify candidates with the skills and experience necessary to enable the Board of Directors to provide proper oversight of those risks. The Nomination, Governance and Public Affairs Committee also takes director tenure into consideration when making director nomination decisions and believes that it is desirable to maintain a mix of longer-tenured, experienced directors and newer directors with fresh perspectives. The Nomination, Governance and Public Affairs Committee and the Board also believe that longer-tenured, experienced directors are a significant strength of the Board, given the large size of our company, the breadth of our product offerings, and the international scope of our organization. The Board’s composition, and the individuals nominated for consideration by stockholders, are the result of careful consideration by the Committee of the correspondence between the risk inventory and skills and experience of the Board members and candidates. In addition to the ability to assist the Board in its oversight of a particular risk or risks, as more fully described in each nominee’s biography, the members of the Board are assessed based on a variety of factors, including the following criteria, which have been developed by the Nomination, Governance and Public Affairs Committee and approved by the Board:

● Whether the candidate has exhibited behavior that indicates he or she is committed to the highest ethical standards;


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● Whether the candidate has had business, governmental, non-profit or professional experience at the chairman, chief executive officer, chief operating officer, or equivalent policy-making and operational level of a large organization with significant international activities across many regulatory jurisdictions and regions that indicates that the candidate will be able to make a meaningful and immediate contribution to the Board’s discussion of and decision-making on the array of complex issues facing a large financial services business that operates on a global scale;

● Whether the candidate has special skills, expertise and background that would complement the attributes of the existing Directors, taking into consideration the diverse communities and geographies in which the Company operates;

● Whether the candidate has the financial expertise required to provide effective oversight of a diversified financial services business that operates on a global scale;

● Whether the candidate has achieved prominence in his or her business, governmental, or professional activities and has built a reputation that demonstrates the ability to make the kind of important and sensitive judgments that the Board is called upon to make;

● Whether the candidate will effectively, consistently, and appropriately take into account and balance the legitimate interests and concerns of all of the Company’s stockholders and other stakeholders in reaching decisions, rather than advancing the interests of a particular constituency;

● Whether the candidate possesses a willingness to challenge management while working constructively as part of a team in an environment of collegiality and trust; and


Whether the candidate will be able to devote sufficient time and energy to the performance of his or her duties as a Director.


Application of these factors involves the exercise of judgment by the Nomination, Governance and Public Affairs Committee and the Board.

Based on its assessment of each candidate’s independence, skills and qualifications and the criteria described above, the Nomination, Governance and Public Affairs Committee will make recommendations regarding potential Director candidates to the Board.

The Nomination, Governance and Public Affairs Committee follows the same process and uses the same criteria for evaluating candidates proposed by stockholders, members of the Board of Directors, and members of senior management. For the 2018 Annual Meeting, Citi did not receive notice from any stockholders regarding a nomination to the Board of Directors.

Director Qualifications

The nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy and to oversee management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills, experience, and backgrounds necessary to oversee Citi’s efforts toward becoming a simpler, smaller, safer, and stronger financial institution, while mitigating risk and operating within a complex financial and regulatory environment.

The nominees listed below are leaders in business, the financial community, and academia because of their intellectual acumen and analytic skills, strategic vision, ability to lead and inspire others to work with them,
https://www.sec.gov/Archives/edgar/data/831001/000120677418000792/citi3349731-def14a.htm

The Citigroup Watch

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Updated September 3, 2012


Citigroup, formed by the 1998 merger of Travelers and Citicorp, is the largest U.S.-based bank holding company. It engages in questionable high interest rate lending in low income communities across the United States, and now globally, through its CitiFinancial unit. Though its investment bank, Citigroup underwrites and trades in pools of loans issued by other predatory lenders. It has assisted Enron, WorldCom, and others; it has settled a slew of securities charges on the cheap. Citigroup finances and is involved in such environmentally destructive projects, including as a purchaser, despite contrary claims and its surreal inaccurate advertisements. Citigroup is nearly the definition of "predator;" this is the Citigroup Watch.

Inner City Press / Community on the Move's (ICP's) initial focus on Citibank was on its branch closings, and disparate mortgage lending. ICP filed an extensive opposition to the Citicorp - Travelers merger application (click here to view). ICP continued to watchdog and document Citigroup's record, in connection with Associates First Capital, European American Bank, Banamex, Golden State Bancorp.and the Sears card portfolio. Click here for ICP's CitiWatch Archive 2000-01 ICP has published a book about the Citi-relevant topics of predatory lending, and corporate fraud - click here for sample chapters, here for a map, here for fast ordering and delivery, and here for other ordering information. The Washington Post of March 15, 2004, calls Predatory Bender: America in the Aughts "the first novel about predatory lending;" the London Times of April 15, 2004, "A Novel Approach," said it "has a cast of colorful characters," including one Vyle. The Pittsburgh City Paper says the 100-page afterword makes the "indispensable point that predatory lending is now being aggressively exported to the rest of the globe." Click here for that review; click here to Search This Site See also, "City Lit: Roman a Klepto [Review of 'Predatory Bender']," by Matt Pacenza, City Limits, Sept.-Oct. 2004. In this space, we are running short weekly updates on Citigroup. For or with more information, contact us.
































































Update of September 3, 2012: Citi agreed to pay $590 million to settle a lawsuit by shareholders who claims that they took massive losses because the bank failed to take timely writedowns on collaterized debt obligations backed by subprime mortgages. U.S. District Judge Sidney Stein granted the deal preliminary approval last week, and set a Jan. 15, 2013, hearing to consider final approval....

Update of July 30, 2012: Two of the vendors that sold the credit card add-ons cited in Capital One's settlement with the CFPB and OCC also do business with Citigroup: private equity owned Affinion Group Holdings, and Intersections. Calling the CFPB...

Update of April 2, 2012: In the first study of the just-released 2011 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that Citigroup continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.


2011 is the eighth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields.

Citigroup confined African Americans to higher-cost loans above this rate spread 3.38 times more frequently than whites in 2011; Citi confined Latinos to higher-cost loans above the rate spread 2.42 times more frequently than whites in 2011, worse that its 1.72 disparity in 2009, the data show.

Update of March 26, 2012: Citibank in 2007 bought 20% of Turkey's Akbank. Now it is cutting that in half -- Akbank says, only to comply with Basel III. We'll see.

Update of January 16, 2012: Nickeled and dimed, per even the WSJ: In December, Citigroup's Citibank unit raised fees on some of its checking accounts. Monthly maintenance fees on the lender's basic-checking accounts jumped to $10 from $8. Also, banking customers have to maintain at least a $1,500 balance, up from zero—or set up direct deposit and pay at least one bill online each month—in order to dodge the fees.

Update of January 9, 2012: Bad karma for the ex-CitiFinancial: talks to sell the bank's OneMain consumer-lending unit to private-equity buyers have ended without a deal in place. Private-equity firms Centerbridge Capital Partners LLC and Leucadia National Corp., along with Berkshire, had been in exclusive talks since the summer to purchase OneMain, which "makes mortgage and other loans to high-risk borrowers." (WSJ)

Yeah: the predatory lending unit...

Update of October 31, 2011: Before 2008 and since, Inner City Press was contacted by a number of such whistleblowers, many of them inside Citigroup's CitiFinancial subsidiary. Beyond those whose affidavits Inner City Press published, one in Knoxville, Tennessee was particularly significant. This whistleblower described to Inner City Press in detail how CitiFinancial's compensation schemes operated, including the sale of credit insurance on personal property with absolutely no benefit to the borrowers. Inner City Press submitted this information to the Federal Reserve, which ultimately fined Citigroup $75 million dollars. The whistleblower was not only fired, but sued and harassed. But the whistleblower persisted.

Update of May 2, 2011:

Now Citibank is accused of killing those who owe it money. In the past, Inner City Press has covered JPMorgan Chase investing in a Japanese finance company which told a borrower to sell his kidney. But this is killing:

In Indonesia, Citi on Hot Seat

Debt Collection Brought In-House After Outside Agents Accused in Man's Death

JAKARTA, Indonesia—Citigroup Inc. said it has hired more than 1,400 people and brought its debt-collection duties in Indonesia in-house, following accusations that outside debt collectors used by the bank may have caused the death of a credit-card debtor.

This month, police arrested three debt-collection agents used by Citibank after a customer died in one of the bank's branches. Police said Irzen Octa was found dead in a Citibank branch in Jakarta after he complained about his credit-card debt.

South Jakarta Police Chief Col. Gatot Edy Pramono said the suspects met with Mr. Octa in a small room and interrogated him, according to the Associated Press. He said an autopsy found a ruptured blood vessel in his head and wounds on his nose.

...The debt-collection hires came after Indonesia's central bank said recently that Citi had violated some collection rules. Bank Indonesia Gov. Darmin Nasution said Wednesday that the central bank is considering penalties against Citi. This month, the central bank ordered the company to stop recruiting new credit-card customers while it investigated whether the bank's collection practices had led to Mr. Octa's death.

The latest episode isn't the first time questions were raised over Citi's debt-collection tactics abroad. In India, a Citi customer in Mumbai alleged in 1999 that outside debt collectors put a knife to his throat and threatened to kill him if he didn't pay his $27,000 credit-card debt. The collectors were later arrested and charged with extortion because undercover officers had witnessed the episode. Citi said at the time that its debt collectors were well-trained and not permitted to use threats.

In 1995, another India customer accused the owner of the same outside Citi collection agency of threatening to have one of his kidneys removed and sold unless he paid an overdue bill of $765. Citi, then part of Citicorp, denied the customer's account at the time.

"These are isolated cases and we have the appropriate controls in place to operate in more than 100 countries," a Citi spokeswoman in New York said Thursday.

Last December, police in India arrested a Citi employee at a branch near New Delhi amid allegations the employee colluded with others to siphon off an estimated $67.2 million from wealth-management customers.

Separately, Indonesian lawmakers called for penalties against Citigroup after a hearing this month that examined allegations that a Citi employee embezzled millions of dollars from customers. Penalties could include being blocked from taking new credit-card customers to losing its license to operate in the world's fourth most populous country.

Update of April 25, 2011: Declining interest, rising interest rates: at this year's Citigroup shareholders' meeting, only 400 people attended, fewer than in previous years. About 25% of shareholders voted for a proposal by the City of New York Comptroller's office demanding that the board launch an independent review of Citi's mortgage and foreclosure practices. But the sleaze just continues...

Update of April 11, 2011: a senior Indonesian lawmaker called for penalties against Citi amid allegations that a local employee embezzled millions of dollars from customers, as well as questions about its debt-collection practices. Speaking to reporters in Jakarta on Thursday, Emir Moeis, chairman of the parliamentary committee overseeing the financial sector in Southeast Asia's most populous country, said the central bank should impose "stern actions" on Citigroup, "ranging from freezing its credit-card business to revoking its entire license in the country depending on the degree of violations it has committed." Bank Indonesia has already ordered Citibank, the largest foreign bank by assets in the country, not to accept new clients for its Citigold wealth management unit after a staff member, Inong Malinda Dee, was detained by police on March 23 on charges of stealing at least $2 million from clients after obtaining signed blank checks from clients. Citi detected the problem in February, and the current investigation shows the fraud dates back to December. Police also seized expensive cars in Ms. Dee's possession.

Update of April 4, 2011: 2010 is the sixth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields. The just released data show that Citigroup confined African Americans to higher-cost loans above this rate spread 3.67 times more frequently than whites in 2010, worse that its 2.25 disparity in 2009, Fair Finance Watch has found. Citigroup confined Latinos to higher-cost loans above the rate spread 2.92 times more frequently than whites in 2010, worse that its 1.72 disparity in 2009, the data show.

Update of March 21, 2011: After the disaster at Fukushima Daiichi nuclear plant in Japan, Deane Dray, a Citigroup analyst covering GE opined that “while it is still early in the unfolding nuclear facility crisis in Japan, we are getting many questions from investors as to what GE’s liability might potentially be,” Dray says that any potential GE liability in this incident appears limited by something called “Channelling law.”

Channeling law is the long-standing nuclear industry practice that assigns the liability for damages from a nuclear failure on plant operators, regardless of fault for an incident. Channeling law is applicable in Japan, and protects equipment suppliers and the designers of nuclear facilities from liability. According to Japan’s Law on Compensation for Nuclear Damage and Law on Contract for Liability Insurance for Nuclear Damage, power plant operators must provide 120 billion yen ($1.2 billion) of coverage and the government provides coverage beyond this level.

So GE will get off cheap, Citigroup predicts...

Update of March 14, 2011: Citigroup, shopping its CitiFinancial unit, is willing to finance a deal or retain a stake in the company. News services list several potential bidder groups. One group reportedly includes Warburg Pincus LLC and KKR & Co. LP, aligned with Boadilla del Monte, Spain-based Banco Santander SA and BlackRock Inc.. Another includes Blackstone Group LP, Brysam Global Partners, Carlyle Group LLC, Thomas H. Lee Partners LP and WL Ross & Co. LLC. Good luck...

Update of February 21, 2011: What's in a name? Citigroup renamed its discredited predatory lending unit CitiFinancial as “OneMain Financial,” renaming NASCAR teams in the process and now trying to sell it. But who would buy it - Blackstone? Why?

Update of February 14, 2011: Shareholders have filed 76 political contribution resolutions so far this year, according to ISS. The measures mainly seek semi-annual reports about direct and indirect corporate spending for candidates and referendums. The first 2011 vote is set for April 21 at Citigroup Inc.'s annual meeting. A similar proposal won 30.3% of votes cast last year.

Update of January 24, 2011: The Fed now have nine months to impose concentration limits on Citigroup...

Update of January 17, 2011: Citigroup in India claimed last week it is working out "fair compensation" for the customers affected by a scandal at its banking branch in the northern Indian town of Gurgaon. "We have been reconciling amounts involved with impacted customers...this process [of working out compensation] will happen over a period of time," the bank said in a statement. Police in Gurgaon are investigating a case in which an employee at the Citibank branch allegedly colluded with others to siphon off an estimated $67.2 million from wealth-management customers. The alleged scam included making false promises -- sort of like Citi's predatory lending...

Update of December 20, 2010: Ah the revolving door -- Obama administration official Peter Orszag is going to work for Citigroup, as Clinton's Bob Rubin did. Any more predatory lending? Or was that “democratization of credit”?

Update of November 22, 2010: Citigroup says it is reviewing about 14,000 foreclosure cases for potential errors, making it the latest bank to acknowledge flaws in how it handled documents used to evict homeowners. In testimony prepared for delivery at a House subcommittee hearing Thursday, Harold Lewis, a managing director of the bank's CitiMortgage unit, is expected to say Citi is reviewing about 10,000 foreclosure documents to ensure they are correct. Another 4,000 are being reviewed because they may not have been signed with a notary public present, as required by state law.”

Update of October 11, 2010: Even District Judge Ellen Huvelle sees Citigroup's settlement with the SEC as a sell out of consumers. The SEC said in a letter to this U.S. district judge that Citigroup Inc. will be required to have stringent reforms that would ensure the bank's disclosures are adequate for investors. The judge has had expressed concerns about the $75 million proposed settlement between Citigroup and SEC, saying she needed assurance that the bank would maintain improved disclosure practices. Oh that there had been judicial oversight over CitiFinancial's $75 million settlement on the cheap with the Federal Reserve, whcih reformed near to nothing...

Update of October 4, 2010: So Bernanke last week said the media tend to “make the good times too hot and the bad times too cold.” This from a man who, like his predecessor, ignored timely comments that Citigroup et al were predatory lenders...

Update of September 27, 2010: From Federal Reserve Governor Elizabeth Duke's September 24 statement on the Home Mortgage Disclosure Act:

“the recent mortgage crisis has highlighted the potential ramifications of a mortgage market that is not functioning well. HMDA data do not create the market or solve all market problems, but they do help us understand what is happening in the market. The time is certainly ripe for reviewing and revising the data elements, standards, and reporting formats.”

But the Fed was presented, repeatedly, with showings based in significant part of HMDA data, of Citigroup's CitiFinancial, Wachovia, New Century, Ameriquest and the like, that predatory and discriminatory lending was taking off. And the Fed did nothing...

Speaking of Citigroup, now they're getting sued by a government - as investor:

“Norway's central bank has sued Citigroup Inc. over alleged misstatements about the company's financial condition during a two-year period leading up to and during the global financial crisis, and which it claims caused it to buy Citi shares at inflated prices. Norges Bank claims that it lost more than $735 million on its investments in Citigroup common stock and more than $100 million on its investments in Citi bonds and preferred shares. The stocks and bonds were purchased between January 2007 and January 2009, according to the lawsuit. The lawsuit, filed in Manhattan federal court Sept. 17, alleges that Citi made a series of misstatements about its financial health, particularly its exposure to subprime mortgages and other toxic assets.”

The word “exposure” makes it sound passive, like Citigroup was a victim. But Citi TOOK ON this exposure, screwing many, many people in the process...

Update of September 13, 2010: Regarding the too-small $75 million proposed fine of Citigroup, the SEC's now said "The proposed $75 million penalty represents less than 0.3% of Citigroup's revenue for the most recent quarter, and should not cause an undue negative financial impact on the company's business, or significant harm to current Citigroup shareholders," the SEC said. The agency estimates the impact equals less than one-third of one cent per share. This is a defense of the weak settlement?

Update of September 6, 2010: Citi executives, meeting with the Fed on Aug. 18, expressed concerns about the effect of the new rules on U.S. firms. "Citigroup representatives also expressed concerns about a narrow interpretation of the definition of hedging and the importance of retaining their ability to hedge across markets," the summary prepared by the Fed said....

Update of August 16, 2010: Unintended consequences? From CJ “ fallout from the Dodd-Frank Act, the financial-overhaul legislation passed this summer. Customers rejected by banks for being unprofitable or risky under the weight of new regulations could migrate to consumer lenders, who have more experience underwriting and pricing subprime risks.On a conference call last month, responding to a question about the viability of CitiFinancial, Citigroup Chief Executive Vikram Pandit said, 'My God, you don't want to shut this down.'”

Oh but some DO want to shut it down...

Update of August 9, 2010: In Colombia, “the local unit of Citigroup reported a profit of COP73 billion, 43% lower than in the same period a year ago.”

Update of August 2, 2010: Much too little, much too late -- “On Thursday, Citi agreed to pay $75 million to settle SEC civil charges that its officials vastly understated Citi's exposure, saying it had declined to just $13 billion in its second and third-quarter earnings releases of 2007, withholding the full extent of its risky assets. The SEC also charged two executives who played key roles in the preparation of Citi's quarterly earnings statements, former chief financial officer Gary Crittenden and former investor-relations chief Arthur Tildesley Jr., who agreed to pay $100,000 and $80,000 respectively to settle the charges.”

Update of July 26, 2010: Through the revolving door, in a move that should be illegal, from regulating Citigroup to getting paid to work for them: Citigroup last week bragged “it has hired Irene Fang, a long-time veteran of the U.S. Treasury's bank regulatory agency, as the New York bank's corporate fair lending director. Fang most recently served as a division head in the Economics Department of the Office of the Comptroller of the Currency. The Economics Department contributes to the fair lending reviews that the OCC conducts in banks of all sizes, Citigroup said in a statement. Fang, who has a doctoral degree in economics, will report to Lloyd Brown, Citi's director of community reinvestment, Citi said.”

Isn't it a conflict of interest, to be in charge of reviewing Citigroup, then getting rewarded with a job at the company?

Update of July 19, 2010: "I'm very pleased we have produced solid operating results for the second consecutive quarter," Chief Executive Vikram Pandit said during a conference call with investors. Growth will come from overseas, CFO John Gerspach told reporters during a conference call. The further away from the U.S., the better Citi's prospects are for making new loans, he said. Consumer banking revenue rose 9% in Latin America and gained 10% in Asia, which generated a combined 90% of Citi's second-quarter consumer banking income of $1.2 billion.

And on the conference call, there was no answer to an analyst's request to meet with Pandit or his bandits...

Update of July 5, 2010: From Dow Jones: “ Citigroup decided in January 1999 to split its operations into two segments. Citicorp combines the retail, corporate, and investment banking business; troubled assets and businesses that don't generate deposits, including the CitiMortgage subsidiary, ended up in Citi Holdings. Earlier this year Citi decided to move back into Citicorp the mortgages... In January, Manuel Medina-Mora was promoted to chief executive of Citi Consumer Banking for the Americas, replacing Terri Dial. In February, Citi hired Desmond Smith from J.P. Morgan Chase to run Citibank's mortgage business.”

We think that should read January 2009, not 1999... And there are other CRA issues with this switch, watch this site.

Update of June 28, 2010: Citigroup turns big profits by trading foreign currencies and the legislation's language has thrown that business into question.

Update of June 21, 2010: Under the shadow of the Volcker Rule, Citigroup is trying to raise $3.5 billion for investment funds.

Update of June 14, 2010: So while Citigroup is looking to sell its $50 billion portfolio of retailers' credit card loans, as with CitiFinancial it says it cannot find a buyer. Is Citigroup trying to become the unwilling but continuing predator? Among those not willing to buy: HSBC and GE Money. Those perhaps looking: Santander. Sears, Citi's "partner," is getting pissed.

Update of June 7, 2010 -- So "CitiFinancial hopes to expand lending later this year when demand for consumer loans may pick up in the other 45 states where the firm operates" -- say it ain't so!

Update of May 31, 2010: Citigroup in cemetery scam: The Financial Industry Regulatory Authority has hit Citigroup Inc. (C) with $1.5 million of sanctions for allegedly failing to supervise millions of dollars in trust funds belonging to cemeteries in Michigan and Tennessee. The agency accused the company of mishandling funds as broker Mark Singer and two of his customers were involved in a scheme to misappropriate more than $60 million in cemetery trust funds in 2004 through 2006. Citi, which neither admitted nor denied the allegations but consented to the entry of Finra's finding, will pay a $750,000 fine and $750,000 in commissions repayment


Update of May 24, 2010: Citi costs the public -- Citigroup received a $45 billion investment under Treasury's Troubled Asset Relief Program. The bank repaid $20 billion and converted, with Treasury's approval, the remaining $25 billion to common stock giving taxpayers 27% of the New York bank. Treasury hired Morgan Stanley and gave it "discretionary authority" to sell the Citi shares at market prices, according to a prospectus filed in April. Selling the shares at market prices is in contrast to a follow-on offering of shares in which Treasury could have sold substantial blocks at once. That process gives the seller price certainty but often depresses the share price because of a surge in supply. Selling at the market, as Treasury has chosen to do, buffers the shares from a sudden change in volume. However, the recent 21% plunge in Citi's value will probably diminish returns for Treasury and raises the possibility some of the shares could be sold at a loss.

Update of May 17, 2010: Too little, too late: After demanding last year that Citi fill its board with more financially savvy directors and improve its risk management, Fed officials in Washington pressed the New York Fed to follow up with tough oversight, people familiar with the matter said.

"The supervision program for Citigroup has been less-than-effective," the Fed board said in a draft of a review of the New York Fed's performance last year, according to documents released by the bipartisan Financial Crisis Inquiry Commission. The final review said Mr. Dudley's staff "did not take timely and appropriate action" to follow up on the Fed's demands in a memo of understanding with a big bank. A Citi representative declined to comment. Typical...

Update of May 10, 2010: Citigroup said a one-notch downgrade of its long-term debt and short-term commercial paper rating would likely mean the bank has to replace $10.8 billion in commercial paper, $2.5 billion in tender option bonds, and $1.1 billion in margin requirements. However, the bank said it has $82.3 billion in liquidity resources it could use as a contingency for such a downgrade, Citi said in its first-quarter earnings filing with the Securities and Exchange Commission. Congress is debating a financial reform bill that might end the concept of "too-big-to-fail," defining banks that would pose too big a systemic risk to the financial industry and the economy to be allowed to fail. If enacted, such legislation would result in rating downgrades, bond-rating agencies warned they might downgrade big banks.

Update of April 26, 2010: FOIA, and Citigroup's cheapskatery, in the news: Citigroup Inc.'s unsuccessful bid for the teetering banking operations of Washington Mutual Inc. proposed that the U.S. government absorb a majority of the thrift's loan losses and limited Citigroup's financial exposure to $10 billion, according to a document released by regulators. Terms of the offer by the New York bank previously were kept secret by the Federal Deposit Insurance Corp., which sold the failed banking units to J.P. Morgan Chase & Co. for $1.88 billion in September 2008. The document was disclosed following a Freedom of Information Act request...

Update of April 19, 2010: Large loans from Citigroup helped to feed "the buildup of risk" in Iceland's banking system, which collapsed spectacularly in 2008, a comprehensive report from a parliamentary commission concluded.

According to the report, Kjalar hf, an investment company controlled by Ólafur Ólafsson, borrowed from Citigroup's Citibank unit in 2007, using as collateral shares in Iceland's Kaupthing Bank held by a Kjalar subsidiary, Egla Invest. Mr. Ólafsson was a big Kaupthing shareholder.In January 2008, with Kaupthing's share price falling, Citibank made a margin call. So Kjalar turned to Kaupthing. Kaupthing granted a €120 million loan. In March, after Iceland's currency weakened, Kjalar borrowed more. The next month, Glitnir also made a loan to Kjalar.

Update of April 12, 2010: In the first study of the just-released 2009 mortgage lending data, Inner City Press / Fair Finance Watch has found that Citigroup confined African Americans to higher-cost loans above the Federal defined subprime rate spread 2.25 times more frequently than whites. Citigroup confined Latinos to higher-cost loans above the rate spread 1.72 times more frequently than whites, the data show. 2009 is the sixth year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread. Further studies will follow.

Update of April 5, 2010: This week the Angelides Commission will hear from Alan Greenspan, Robert Rubin and Chuck Prince. This goes back to the Citicorp - Travelers merger, about which Inner City Press was asked this week:

When Travelers met and swallowed Citicorp in 1998, the Federal Reserve didn't just approve an illegal merger -- it illegally pre-approved an illegal merger. Sandy Weill and John Reed and their lawyers got the green light from the Alan Greenspan Fed before even announcing the merger. The group I worked and work with, Inner City Press/Fair Finance Watch, demanded all records of the meetings, but got only two cryptic letters, talking about the marriage of "Red" and "Blue." The Fed approved, and predatory lending took off. And now in the aftermath, even the Chris Dodd bill would house consumer protection inside the same Federal Reserve, a huge mistake. Red and Blue indeed...

Update of March 29, 2010: From the WSJ, we annotate in italics: "CitiFinancial, a consumer lender, has a business model that is similar to CIT Group Inc., which suffered as wholesale funding dried up and sought bankruptcy-court protection last year, exiting in December. CitiFinancial used to be known as Commercial Credit Corp. and was the cornerstone of the empire Sanford Weill built into Travelers Group before merging with Citicorp in 1998 to form Citigroup. As a stand-alone firm, CitiFinancial could have trouble getting access to cheap credit, some analysts said."

It's also a widely known predatory lender. Could that have something to do with the difficulty in selling it?

"Another business up for sale: a credit-card portfolio with an estimated $40 billion in receivables and private-label cards pitched through retailers like Sears Holdings Corp."

And that business repeatedly calls people, even those on the Do Not Call list, just as CitiFinancial does...

Update of March 22, 2010: More and more complains are pouring in about Citigroup, Citifinancial and Citi card services making repeated and abusive telephone calls. One complainants says she took out a personal loan from CitiFinancial, and since then has been mis-charged late fees that they refuse to explain, only call about. Citi does Radio Shack's private label calls, and has a robo-caller calling its customers. This is the new Citi?

Update of March 15, 2010: Citigroup helped cause the collapse of Lehman Brothers Holding Inc. by demanding more collateral and changing guarantee agreements, the bankruptcy examiner said last week. “The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity pool,” said Anton Valukas, the U.S. Trustee-appointed examiner, in a 2,200-page report filed in Manhattan federal court. “Lehman’s available liquidity is central to the question of why Lehman failed.”

Update of March 8, 2010: Another abusive clause cited by Citi for immunity, impunity: Citigroup argued in a hearing in Manhattan Thursday that the lawsuit Terra Firma Capital Partners has filed against it, claiming the bank made false statements when it sold EMI Group Ltd. to Terra Firma in 2007, should be moved to London. Appearing before U.S. District Judge Jed S. Rakoff in Manhattan, Citigroup lawyer Jay Cohen argued that an agreement signed between Terra Firma and EMI in 2007 included a right to have any proceedings arriving out of that agreement carried out in London and that Citigroup was allowed by other provisions to enforce that right...Terra Firma countered that Citigroup wasn't legally entitled to enforce the clause...

Update of March 1, 2010: With Citigroup moving to put Ernesto Zedillo on its board of directors, questions are re-emerging about Zedillo's actions on the 1997 massacre at Acteal in Chiapas...

Update of February 22 -- Ten days after the release by the U.S. Senate of a reporting on evasion by the son of Equatorial Guinea's President for Life Teodoro Nguema Obiang Mangue of anti-money laundering controls by and at Citigroup and others, the Obiang regime fired back, calling the report racist and citing in its defense the election of Barack Obama. Inner City Press is putting the Obiangs' memo online, here. InnerCityPress.com article here.


Update of February 15, 2010: Citigroup's Banamex says it expects to take market share from rival banks in 2010 after posting 27% loan growth last year during the country's worst recession since the 1995 peso crisis. "We have been growing a lot faster than GDP and the banking industry... We want to continue to grow more than the sector and continue to take market share," said Luis Miguel Rodriguez, Banamex's director of financial analysis and planning. The bank's total loans rose 27% to 350.1 billion pesos ($27 billion) at the end of 2009, led by growth in mortgages -- how many are predatory?

Update of February 8, 2010: Missing from New.Citi.com are admission like, "Yes CitiFinancial trained its employees to hard sell unnecessary credit insurance, even on items like fishing rods which weren't collateral for loans. But what of it? We've produced a new video! We're here for you!"

Update of February 1, 2010: Citigroup jacked up its stake in the controlling shareholder of Banco de Chile, acquiring an additional 8.52% in LQ Inversiones Financieras for $511 million. Banco de Chile, the Andean nation's second largest bank, is controlled by the local Luksic family, which also controls U.K.-listed copper miner Antofagasta PLC (ANTO.LN) and U.S.-listed beverage company Compania Cervecerias Unidas SA (CCU), among other assets. In a 2007 deal Citigroup Inc. took a 10.44% stake in Banco de Chile, through LQ, and the Chilean bank acquired Citibank's local assets. Under the terms of the Banco de Chile-Citigroup deal, the Chilean bank took over all of Citibank's local clientele, while the U.S. bank retained control of Banco de Chile's operations on U.S. soil.

And where are Citigroup's home country regulators?

Update of January 25, 2010: As the financial crisis commission claims to be zeroing in on Citigroup, so far interviewed were Lloyd Blankfein, CEO of Goldman, Brian Moynihan, CEO of Bank of America, James Dimon, CEO of J.P. Morgan, and John Mack, chairman of Morgan Stanley. Who will appear for Citi? And where will it all end?

Update of January 18, 2010 - See Inner City Press' "As Obama's Bank Fees Under-Target Citigroup and AIG, Geithner Questioned" here

Update of January 11, 2010: Too little, too late, Citigroup's ex-spook director John M. Deutch last week intoned that "directors that served on Citi's board during this financial crisis should rotate off in an orderly fashion." Mr. Deutch was among the deadwood directors targeted last year by Citigroup shareholders who contended that the directors should be removed. Also needing replacement are former AT&T Corp. Chief Executive Michael Armstrong, Alcoa Inc. Chairman Alain Belda, Dow Chemical Co. CEO Andrew Liveris, Xerox Corp. Chairman Anne Mulcahy, Rockefeller Foundation President Judith Rodin and Robert L. Ryan, retired finance chief of Medtronic.

Update of January 4, 2010: In India, despite public statements that Citigroup and CitiFinancial would be getting out of their subprime lending, now Citi has decided to continue: "Shriram Transport Finance Company (STFC), which has acquired the assets of GE Transportation Financial Services, a part of GE Capital, is looking aggressively for more such acquisitions, R Sridhar, managing director, said. Sridhar added that talks of acquiring assets of Citi Financial have not fructified. 'We have been negotiating with Citi Financial for a while now, but the company is not up for sale anymore as they want to enter the market again.'"

So Citi's predatory lending will continue...

Update of December 21, 2009: An arbitration claim by the Abu Dhabi Investment Authority against Citigroup, seeking to rescind an agreement to invest a total of $7.5 billion in the U.S. lender or damages of over $4 billion has been filed, alleging that there were "fraudulent misrepresentations" in the investment agreement. Sort of like CitiFinancial's "fraudulent misrepresentations" to its lower income borrowers...

Update of December 14, 2009: Revealed by the WSJ: "More than $2 billion allegedly held on behalf of Iran in Citigroup Inc. accounts were secretly ordered frozen last year by a federal court in Manhattan, in what appears to be the biggest seizure of Iranian assets abroad since the 1979 Islamic revolution. The legal order, executed 18 months ago by the U.S. District Court for the Southern District of New York, is under seal and hasn't been made public." Call it Citi's secret sleaze...

Update of December 7, 2009: The Kuwait Investment Authority's exit from Citigroup comes as another Gulf sovereign wealth fund, the Abu Dhabi Investment Authority, may have to overpay on about $7.5 billion worth of the Citi's shares it's committed to buy at $31.83 a piece in a deal struck two years ago. The UAE-based investment fund, also known as ADIA, committed in November 2007 to pump billions into Citi in return for an 11% dividend up to March next year when it has to start buying the bank's common stock.

Update of November 23, 2009: Citigroup, which used to have five retail banking locations in London, has written to account holders alerting them to the closure of its Monument branch on November 27. It’s the one just east of the monument to the Great Fire of London, the tallest isolated stone tower in the world. Users are being directed to the St. Paul’s branch, which is about a mile west. That’s a 15-minute walkaway. Accounting for the closure, a spokeswoman said: “The St Paul’s branch has better facilities and is located on a bigger site.” They've done this in the USA too...

Update of November 9, 2009: Primerica, a consumer complaint challenged business even by Citigroup's standards, is slated to be spun off via an initial public offering. Like CitiFinancial, Primerica targets "lower end consumers," as the WSJ diplomatically puts it. Many of those recruited to pay to work for it also complain, including to the Federal Trade Commission, from which Inner City Press receipt a slew of complaints under the Freedom of Information Act. Now the spin off. But Citi's predatory heart continues to beat...

Update of November 2, 2009: One TARP-er hypes the stock of another, per WSJ: The recent selloff in BofA shares creates a good chance to buy into the bank, say Citigroup analysts. Bank of America shares are down some 17% from their most recent closing peak of $18.59 hit on Oct. 14. "Given the ongoing CEO search, fear of a capital raise only adds to the uncertainty hitting the stock, which creates a very attractive entry point."

Update of October 26, 2009: Citigroup canceled a planned $4.5 million renovation of its main office in Brazil that included an area for entertaining clients and a landscaped terrace called a "suspended garden." Can you say, Babylon?

"We need it to compete," a senior executive told the WSJ about about the project last week, describing it as an important way to impress banking clients and use Citigroup's real estate more efficiently. But on Tuesday afternoon, a person familiar with the situation said the renovation had been reviewed by senior executives, who decided to shelve the project. The reversal underscores the sensitivity inside Citigroup about its spending habits, since the bank has gotten $45 billion from the U.S. government, a 34%-owner of the company's common stock.

Update of October 19, 2009: From the WSJ, "While it might not be surprising that Citi is trailing strong companies, such as JP Morgan and Goldman Sachs, the bank also stacks up poorly against Bank of America, the other major financial institution that remains on government support." Yep.


Update of October 12, 2009: Citifinancial continues with its sleaze. From last week's Charlotte Observer:

"Donna and Ronnie Fruia learned firsthand how difficult it can be to get help modifying a mortgage. The couple from Troutman were in the midst of a series of health crises, and three members of the family - the couple's son, Donna's mother and Ronnie - were in the hospital. That's when Donna got a call that somebody from her mortgage company, CitiFinancial, had shown up in her husband's hospital room, where he was recovering from a stroke. 'At the time, I couldn't even really talk that good," Ronnie said. "But he wanted me to sign a bunch of papers.' The Iredell County couple had been trying to get a mortgage modification from CitiFinancial. The company, however, was pushing them to accept a modification that wouldn't have cut their interest rate, they said. Only after the episode in the hospital room and the involvement of state regulators did CitiFinancial cut the mortgage's interest rate from 11.5 percent to 5 percent, lowering their monthly payment from $985 to $602. The process took from the start of the year until July."

So what are the regulators going to do? Tim Geithner called Citigroup's chairman 17 times in the first half of this yet...

Update of October 5, 2009: Reports that Citigroup is planning to cut back its retail banking presence to six cities -- New York, Washington, Miami, Chicago, San Francisco and Los Angeles -- and ditch branches in Texas, Boston and Philadelphia has some community activists asking how Citi would comply with the Community Reinvestment Act if it makes these cut backs. But Citi with its Citibank has the worst customer service ratings, while its Citifinancial has long engaged in predatory lending. So others thing cutting Citi back is a step in the right direction. If they collect deposits beyond these six cities, they should have a CRA duty there. But subprime loans, even personal loans, is not the way to comply with CRA. Watch this site.

Update of September 28, 2009 -- As Citigroup moves to ditch its Portugal credit card business to Barclays -- Pandit deemed it "non core" -- it becomes clearer that Citi's focus is in emerging markets, where it can still get away from unfettered predatory lending.

Update of September 21, 2009: Citi and HSBC: HSBC, whose Household International unit told borrowers how to doctor their applications for subprime loans, has now sued New York businessman and prominent Democrat fund-raiser Hassan Nemazee, alleging he fraudulently obtained a $100 million loan from the bank and used the bulk of the money to repay a separate loan he falsely obtained from Citigroup. The funds were used to repay a loan from Citigroup's Citibank unit, according to the lawsuit. The HSBC loan remains outstanding, according to the complaint. Prosecutors have said he used fake documents to borrow money to repay the loan from Citibank on Aug. 24.

The government has said Nemazee obtained a line of credit to repay Citibank by using the same type of fake documents - fake account statements and forged signatures - that he used to fraudulently obtain the Citibank loan.

Update of September 14, 2009: Another country in which Citi is going to keep doing subprime and predatory lending is India. “We have a comprehensive revival plan for CitiFinancial, in terms of moving the asset base to more stable sectors,” Citibank’s chief financial officer (CFO), Abhijit Sen, told reporters. "The Citi group is unlikely to sell CitiFinancial"....CitiFinancial India offers personal loans, home loans, home finance and loans against property.

Update of September 7, 2009: Despite all the talk about Citigroup moving away from subprime and predatory lending, even in Indonesia its high-cost unit CitiFinancial continues to grow, having just "opened two new branches in Makassar and Palembang. Djamin Nainggolan, consumer finance business head at Citi Indonesia, said: "The expansion of CitiFinancial to Makassar and Palembang reinforces our commitment to growth and development in Indonesia. Within four years, we have grown from 16 branches to a 69-outlet network." Predatory lending in Indonesia...

Update of August 31, 2009: Failure to supervise? The Financial Industry Regulatory Authority barred Citigroup employee Tamara Lanz Moon from the securities industry for allegedly taking more than $850,000 from at least 22 especially vulnerable customers, including $55,000 belonging to an American diplomat working overseas...

Update of August 24, 2009: Parts of a confidential agreement reveal that U.S. regulators directly pushed Citigroup Inc. to replace then-CFO Edward “Ned” Kelly, which is in sharp contrast to CEO Vikram Pandit’s earlier statement, per SNL. According to the document, the New York-based bank had agreed to review whether Kelly could be “more effectively utilised” by giving him other responsibilities and if so, to replace him. Citing people close to the matter, SNL reported that Kelly resigned from his post on learning about the agreement, which allowed the bailed-out bank to make Kelly the vice chairman and promote then- Controller and Chief Accounting Officer John Gerspach to CFO.

August 3, 2009


































Predatory Lending Persists, Despite Rosy Views from DC, Citi's Dark Side in Knoxville

By Matthew R. Lee

SOUTH BRONX, August 1 -- In Washington and New York, there is talk of an uptick in the national housing market and a curtailment of controversial subprime lending by such wounded giants as Citigroup. On July 31, Inner City Press asked the International Monetary Fund about the regulation of subprime lending in the United States, yielding a rosy answer about consumer protection.


But a mortgage broker in Knoxville, Tennessee long known to Inner City Press tells a different story on both fronts. He has in the past been sued for whistleblowing about Citigroup, and so will remain nameless in this article. But he knows Citigroup's subprime business well, having worked for and then against its consumer finance subsidiary CitiFinancial.

Reflecting the collapse of the housing market, he compares 2006, when he closed over 100 home purchase loans, with the year to date 2009, in which he has closed only six such loans.


His income from fees has plummeted, and he faces a car repossession by Wells Fargo (which he calls Hells Fargo). Still he laments others' problems more than his own, describing to Inner City Press a sample CitiFinancial loan in Knoxville.

"They raked her at twelve and a half percent," he said, referring to a 63 year old African American woman who was also charged $7,000 in fees. "This is after they took TARP bailout funds, they won't show any flexibility and she's about to lose her house."


He describes another borrower who has a $1700 personal loan from Citifinancial at 25.5% interest, and a $6,000 loan at 16% from Washington Mutual Finance, which CitiFinancial bought. The loans were consolidated at the higher CitiFinancial rate of 25%. "They're still up to their predatory lending," the maverick broker says. Even with the go-go years over.
Update of July 27, 2009: "Robert Joss is leaving the board of directors at Wells Fargo to join the board of Citigroup" - WTF? Who is it, that offered him the Citigroup position? How isn't it a conflict of interest, given Citigroup's and Wells' fight for Wachovia? What about the other conflicts of interest on the Citigroup board?

Update of July 20, 2009: After the financial meltdown exposed the Federal Reserve's inattention to predatory lending and credit default swaps, one would expect the Fed to hold off further loosening the rules on CDS. But you'd be wrong. Last week the Fed granted an exemption to CDS dealer ICE Trust, owned by crisis loser Citigroup, among others, giving them an easier 20 percent capital treatment rather than the 100 percent applicable to uninsured banks like ICE Trust.

Bloomberg News, notably, spun the story the other way, claiming that "the Federal Reserve determined that ICE Trust is as risky as any insured bank, according to a letter posted July 14 on the regulator’s Web site. The Fed is requiring that bank members of ICE Trust, such as Goldman Sachs and New York-based Citigroup Inc., set aside the same amount of capital as parties trading as federally-backed lenders."

But this is a story yet again of the Fed making it easy for the dealer community-- the dealers sought 0% so at least the Fed is imposing 20%. Those who don't learn from the past are condemned to repeat it...

Update of July 13, 2009: On the West Coast, Citigroup is refusing to help Californians in their time of need, announcing it will not accept the State's IOUs. As noted by the Associated Press, "clearly, the federal government has leverage over these institutions," said [Inner City Press / Fair Finance Watch]. Hundreds of banks have received aid from the government as part of its $700 billion rescue plan last fall."

Update of July 6, 2009: Citigroup, with $45 billion in bailout funds, one third publicly owned, has jacked up credit card rates more sharply than other banks, the FT reports. It has also raised salaries by 50%....

Update of June 29, 2009 -- Japan's financial regulator ordered Citigroup Inc.'s Citibank Japan Ltd. to suspend all promotional sales activities in its retail-banking division for one month as punishment for lax compliance in preventing money laundering.....

Update of June 22, 2009 -- While human rights groups call for investigations of the killing of tens of thousands of civilians by the Sri Lankan government as well as Tamil Tigers, and for the government to release the hundreds of thousands of Tamils including UN staff whom it has in detention, this does not dissuade HSBC, or reportedly Citigroup and Deutsche Bank. Like some notorious hedge fund investors, They see only the chance to profit while there's blood in the streets.

The focus seems to be on Sri Lanka's ports, which are to be trebled in size. Getting many of the contracts, some have noted, are South Korean firms. But even the International Monetary Fund, which a month ago on May 21 said that the Rajapakse administration's application for a $1.9 billion loan would be approved "within weeks"(click here for the Inner City Press story) now says the proposal is not yet certain, is not agreed to. The government's use of funds for what many call ethnic cleansing is increasingly questionable.
Update of June 15, 2009: While supposedly recused at the Federal Reserve Bank of New York, Tim Geithner was weighing in on Bank of America, in support of the shotgun marriage with Merrill Lynch, it emerged in Congress last week. What was his role in Citigroup?

From the WSJ, emphasis added: "Mr. Geithner, then head of the Federal Reserve Bank of New York, had recused himself from individual bank matters in November after being tapped as Treasury Secretary. Treasury officials say Mr. Paulson kept Mr. Geithner apprised of what was happening with the merger. A separate note from Mr. Lewis recounts a conversation with Mr. Bernanke and suggests that Mr. Geithner approved of the agreement to infuse the bank with more money and guarantee its assets. A similar structure had been used to help Citigroup Inc. A Treasury spokesman said Mr. Geithner was informed about what was happening but didn't weigh in on specifics."

Yeah...

Update of June 8, 2009: So the regulators' idea of change at Citigroup would be to hand the reigns from Pandit to former U.S. Bancorp CEO Jerry Grundhofer, who bought a 25% stake in now-failed predatory lender New Century? Plus ca change, plus c'est la meme chose.

Update of May 25, 2009: High rate, subprime accounts make up one-third of Citigroup's credit card portfolio...

Update of May 18, 2009: Airports operator BAA Ltd last week said Citigroup Inc.'s consortium had been eliminated from the auction for Gatwick Airport, leaving just two bidders still in the running. BAA said the Citigroup proposal "was uncompetitive on price and there were no assurances on deliverability." Many are saying that of the current Citigroup...

Update of May 11, 2009: Now Citi sells its Japanese domestic securities business for 774.5 billion yen ($7.9 billion) in cash. "We will continue to look for additional opportunities to maximize the value of businesses and assets as we rationalize and restructure Citi," Citi Chief Executive Vikram Pandit said. Citi had bought Nikko Cordial for $7.7 billion as the largest foreign bidder in Japan in April 2007. However, it is now being forced to sell its non-core assets after being hit by credit-related losses in wake of the global financial meltdown. Citi is also selling its Nikko Asset Management business in a separate deal. The sell off continues...

Update of May 4, 2009: Amazingly, CitiFinancial continues to sponsor a Ford car -- NASCAR TARP.

Update of April 27, 2009: According to the WSJ, “a long procession of grumpy investors took to the microphone to vent about the crippling losses that have decimated Citigroup's share price. Some shareholders lashed out at the New York bank's directors for failing to adequately shield the company from the credit crisis and recession. Still, by the time the meeting adjourned roughly six hours later in the ballroom of a Manhattan hotel, Citigroup's slate of directors had been handily elected, with each director receiving at least 70% of the votes cast. Also, Chief Executive Vikram Pandit managed to dodge much criticism of his 16-month tenure. There was no sign of representatives of Citigroup's soon-to-be-largest shareholder, the U.S. government, which is poised to own as much as 36% of the company.” How about the taxpayers? Or the predatory lending victims Citi previously tried to belatedly buy off?

Update of April 20, 2009: In the run-up to its annual shareholders' meeting, this time in the Hilton and not Carnegie Hall, Citigroup has been criticized for misleadingly offering $5,000 loans and not disclosing in the advertising the interest rate -- 30%. But CitiFinancial has been doing that for a long time...

Update of April 13, 2009: Job well done? "Citigroup said longtime executive Steve Freiberg plans to retire after nearly three decades with the company. 'Steve has been an extraordinary leader and has made significant contributions to building the great global franchise that Citi is today,' Chief Executive Vikram Pandit said in a statement." What exactly was so well done about the job?

Update of April 6, 2009 -- In the first study of the just-released 2008 mortgage lending data, Inner City Press / Fair Finance Watch has found that Citigroup, perhaps due to its shrinking, some say dying, business confined African American to higher-cost loans above the rate spread 1.90 times more frequently than whites, and 1.23 time more frequently than whites for Latinos. 2008 is the fifth year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of 3 percent over the yield on Treasury securities of comparable duration on first lien loans, 5 percent on subordinate liens.

Update of March 30, 2009: Geithner Promotes Megabanks' including Citigroup's Monopoly, in DC as at Fed, 17 Cut to 7 on Derivatives

Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis


NEW YORK, March 28 -- Seven megabanks' renewed grab for monopoly power in the over the counter derivatives market shows how little Wall Street's real power has changed in the transition from the Bush to Obama administrations.


The banks, including Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank, are paying over $1 million to p.r. firm Prism Public Affairs to "educate" the voters weary of bonus and bailouts that those who caused the crisis should benefit from it.


Already, Congress members hungry for campaign contribution have submitted to closed door briefings by Ed Rosen of the law firm Cleary Gottlieb, who drafted the legislative language for monopoly.

The connector in this story is Timothy Geithner, under Bush the president of the Federal Reserve Bank of New York and now Obama's Treasury Secretary. Geithner in June 2008 convened closed door meetings with 17 banks, essentially allowing them to propose and draft their own rules for the derivatives market.


This led to advocacy by the Fair Finance Watch that Geithner's meetings were in fact rule making that excluded the public in violation of the Administrative Procedure Act, and by Inner City Press, as media, to get the meetings opened to journalists and the public.

Update of March 23, 2009: Pandit put out this spin last week "The work we have all done to try to stabilize the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees," Mr. Pandit wrote in a memo distributed to Citi's 300,000 employees.

March 16, 2009


In DC, Officials Defend Bailouts of Citigroup

Byline: Matthew Russell Lee of Inner City Press

WASHINGTON, March 13 -- The ongoing bailout of insurer AIG and its counterparties was apologized for but defended by a range of Obama administration officials this week. Treasury Secretary Timothy Geithner, until recently the president of the Federal Reserve Bank of New York and before that at the IMF, said he hated to have to bailout AIG, but "it's systemic."


His advisor Gene Sperling, a member of President Bill Clinton's economic team, said the Obama administration took office only to find AIG too big to fail, implying that this was entirely attributable to the two terms of George W. Bush. But AIG was allowed to grow without control under Bill Clinton, just as Citigroup was increasingly unsupervised under the tenure at the New York Fed of Timothy Geithner, as CitiFinancial got deeper into predatory lending ...

Update of March 2, 2009: With Citigroup partially nationalized, who would join the board of directors? According to the WSJ, more of the same: James Hance formerly of Bank of America, Jerry A. Grundhofer the ex-CEO of U.S. Bancorp; and Robert K. Steel, who the Journal describes as "CEO of Wachovia Corp. when it was acquired by Wells Fargo & Co. and now is a director at Wells Fargo." Yeah, and just before that he was with the Treasury Department. This is no change that can be believed it, much less with Citi's argument that re-treads "Robert Ryan and Lawrence Ricciardi, who joined in 2007 and 2008, respectively, count as 'new' and don't necessarily need to be replaced." Oh yes they do...

Update of February 23, 2009: Pandit last week said, "The future of Citi is in emerging markets, is in Latin America, and is in Mexico with Banamex." While the last is dubious, one thing seems true: the future of Citigroup, if it has one, is not in the United States, although it might be WITH the United States (government)...

Update of February 16, 2009: Citigroup, to defend its plastering of its discredited name on the Mets new stadium in Queens, rounded up the support of Dem Reps Eliot Engel, Joseph Crowley, Yvette Clarke, Gregory Meeks, Anthony Weiner and Steve Israel. Would they write in favor of Citigroup's jet? During the Congressional hearings last week, Nydia Velazquez called Pandit “a convincing person." Convincing to whom?

Update of February 9, 2009: American Eagle Outfitters sued Citigroup and accused it of fraudulently inducing it to buy $258 million worth of auction rate securities that it now can sell only at a significant loss, if at all. Citigroup represented the securities as safe and liquid and therefore compatible with the Pittsburgh-based clothing retailer's conservative investment policies, according to the suit. Instead, American Eagle claimed, Citigroup knew there was not enough demand for the securities to keep them liquid. A Citigroup spokeswoman declined to comment.

Update of February 2, 2009: Too little too late, accountability awaits: Sanford "Sandy" Weill says he will end a 10-year consulting contract with the bank that gave him millions of dollars in perks, including an office, car and driver and the use of company jets. Weill, who retired as chairman and started the consulting job three years ago, now wants to opt out. But what about returning ill-gotten gains?

Update of January 26, 2009: Endgame, Here is what will make up Citi Holdings:
-CitiFinancial, a consumer finance company with over 3,000 branches in the U.S., offering products like personal loans and auto loans, has provided little of what Pandit called "linkage" with Citi's banking business.
-CitiMortgage deals to a large extent with mortgages originated by brokers rather than Citi branches. (Citi had only in recent years started to built a relationship between Citibank, its retail bank, and CitiFinancial - but the experiment remained small in scale.)
-Primerica, the unit that sells annuities and retirement funds, and also makes consumer loans, will also be part of the new unit
-Private label Credit cards: The Citi unit that issues cards bearing a retailer's name, rather than Citi's, is in Citi Holdings. This portfolio might be relatively easy to sell, some observers said. JPMorgan Chase & Co. (JPM), for example, might be interested.
Combined, they will hold about $850 billion in assets, and generate about 20% of Citi's earnings. Citi Holdings will also hold the illiquid assets that have created so much pain for Citi due to write-downs.
Pandit said the units in Citi Holdings "are good businesses" and Citi believes "they have considerable value" - and that is why they might be better divested, or, like Smith Barney, combined with another company's business.
Good luck...

Update of January 19, 2009: Let Citigroup fall apart, let it fail without further bailout. For sale: "CitiFinancial, which does real estate lending, personal and auto loans, had 3,799 locations, compared to Citi's 4,057 Citibank branches, as of the third-quarter. Though CitiFinancial does not offer the same range of products as the Citibank branches, it does cross-sell Citi credit cards through most of its locations. " Terminate it - it is rotten.

Update of January 12, 2009: The chickens have come home to roost at Citigroup, with Robert Rubin leaving, and regulators encouraging something of a break-up of the illegally formed financial supermarket, brought low by involvement in predatory lending. Good riddance...

Update of January 5, 2009: Trying to make favoritism appear to be part of a program, the Treasury Department has given named and even post-hoc guidelines for its second bailout of Citigroup. The "Asset Guarantee Program," we're told, might be offered to other bans on a "case-by-case basis." In its required filing with Congress, Treasury pontificates that "the objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security." And we thought it was just to prop up Citigroup. The $20 billion purchase of preferred Citi stock now has the high-sound moniker, "Targeted Investment Program," and Treasury has belated enunciated five principles of the unprincipled program to determine eligibility, beyond just who you know: the extent to which the "destabilization of the institution could threaten the viability of creditors" and whether or not an institution is "sufficiently important to the nation's financial and economic system that a loss of confidence in the firm's financial position could potentially cause major disruptions to the credit markets." That's called, too big to fail. But wasn't Lehman Brothers?

Update of December 29, 2008: So not only did Citigroup lose out to Wells Fargo to buy Wachovia -- it was beaten to Chevy Chase by Capital One. How low can you go?

Update of December 22, 2008: A jingo-ist America might ask, so the U.S. bails out Citigroup for $45 billion and untold more in guarantees, then Citigroup turns around the lends $8 billion to Dubai. So the U.S. is direct lending to Dubai? And what of Citigroup's name on the Mets new baseball field, and on "The Pond" skating extravaganza in New York's Bryant Park? Is this the supposed new rigor of examination of Citigroup?

Update of December 15, 2008: Another week of Citi-sleaze, and only two more settlements: auction rate securities, and Egg over in England.

Update of December 8, 2008: How has Citigroup used its fresh billions in government bail-out funds? On November 30, it was exposed as sponsoring a Congressional junket to the Caribbean. On December 1, it announced it is spending over seven billion Euros to buy the highway business of Spanish construction firm Sacyr Vallehermoso. Meanwhile as reported last week, Robert Rubin who pulled in over $100 million from Citigroup began a counter-offensive, saying none of the collapse was his fault. He had no operational responsibilities, he said. Call him the Stephon Marbury of high finance, motoring down a Spanish highway without a care in the world.


Update of December 1, 2008: Robert Rubin has tried to defend his $115 million in payola from Citigroup since 1999 by minimizing his role, while now saying, "I have told Vikram that I will remain part of this and try to be helpful." So the people who caused the problem just stay on and keep getting paid. Contrary to his claim to be uninvolved, Rubin helped hook up Citigroup's purchase of notorious predatory lender Ameriquest.


Flashback to March 2007, from Deval Patrick, following his $360,000 a year part-time service on the board of directors of the predatory lender Ameriquest / ACC: "As a former board member, I was asked by an officer of ACC Capital to serve as a reference for the company and agreed to do so. I called Robert Rubin, a former colleague from the Clinton administration and an executive at Citigroup, to offer any insight they might want on the character of the current management... I appreciate that I should not have made the call."


A "senior person who has no ax to grind," Rubin calls himself. It's time to face the axe, some say...

Update of November 24, 2008: The choice of Tim Geithner as Treasury Secretary put a protege of Citigroup's Robert Rubin in charge of the economy, just as Citigroup teeters near failure due to its predatory lending. Rubin did nothing to stop Citi's gouging practices, just as Geithner did little as head of the Federal Reserve Bank of New York to regulate and reign in the lenders under his jurisdiction.

Update of November 17, 2008: Global fragment of the predatory lending meltdown -- In Japan, Citigroup's CFJ subsidiary is selling loans it holds to "illegal companies."

Update of November 10, 2008: Citigroup Inc. lost $1.44 billion during the third quarter from packaging credit card debt and selling it as bonds... Even in recruitment, Citigroup stumbles:

"Citigroup has recruited Lehman Brothers Holdings’ former European head of equities technology, Rick Seidenstein, as global head of equities institutional sales and trading technology. Based in London, Seidenstein reports to the U.S. bank’s global co-heads of equities and prime finance technology Tim Clark and Ravi Radhakrishnan. Seidenstein spent six years at Lehman in a variety of roles, including the head global program trading, the head of electronic execution services for Europe, the Middle East and Africa and, most recently, the head of Emea equities and prime services technology. Citigroup said the appointment 'will further help us position our strategy to fully realize the potential of the investments we have made in recent years.' Citigroup has been keen in recent months to establish its credentials as the leading provider of so-called smart order routing systems, trading platforms that enable customers to access the proliferation of alternative trading systems, such as Chi-X, Turquoise, Nasdaq OMX Europe and Bats Trading Europe, as well as the primary exchanges."

It's a little late, for Citigroup to "establish its credentials"...

Update of November 3, 2008: Great job, Pandit: in the last year, Citigroup shares have lost 65% of their value, and $68 billion in mortgage-related losses later, the company has so many troubled assets that its days as a leader in U.S. finance appear to be over. “Citi no longer matters,” says Bill Smith, head of Smith Asset Management, a shareholder in and longtime critic of the bank. “It's a black hole.” Even after massive write-downs, the bank still has $138 billion of “problem assets." Crain's says that with $25 billion in federal bailout money safely in its coffers, the company will also get another chance to snap up an even weaker rival or two on the cheap.

But see Inner City Press' interview with Joseph Stiglitz, in this week's CRA Report, www.innercitypress.org/crreport.html

Update of October 20, 2008: It's telling, in terms of how sloppy the corporate giveaways have been, that neither the Fed nor Treasury thought through how buying warrants in Citigroup would put Citi in the position of reducing book value or recording a loss. Expect the rule changing for the biggest banks to continue...

Update of October 13, 2008: The WSJ transcribes for Citigroup that "Citi will mainly seek to expand overseas, particular in Asia and Eastern Europe, which has long been a major focus of Citi's growth strategy. Retail banking and consumer lending returns there by far outweigh the returns in the U.S., Citi has long argued. Citi has 'exactly the same strategy as before,' the source said." And that strategy includes predatory lending -- now in Asia and Eastern Europe...

Update of October 6, 2008: So is now-spurned Citi now lusting after SunTrust? And if it gets neither, will it fail?

With Wells Fargo's announcement that is it outbidding Citigroup for Wachovia, and would consummate its proposal, without FDIC assistance, by the end of the year the question arises: how could the regulators bypass public notice and comment on a transaction that has no FDIC involvement?

Citigroup's low-ball $2.16 billion supposed deal, announced Monday, had rubberstamp approval with no public notice or comment, including under the Community Reinvestment Act on CitiFinancial's widespread involvement in controversial subprime lending...



























Citigroup - Wachovia Approved by Fed and Bush, Public and CRA Excluded, Laws Repealed?

Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis

NEW YORK, September 29 -- With Monday morning's announcement that Citigroup, whose subprime write-off helped hearken the current financial crisis, will buy Wachovia at fire sale prices with no public comment, banking law has been turned on its head or repealed. Bank mergers and conversions are supposed to be subject to public notice and comment, unless in emergencies such as failure and FDIC take-over. But last Sunday the Federal Reserve gave immediate approval to applications by Morgan Stanley and Goldman Sachs to convert to bank holding companies.


A week later, Citigroup is shielded from public comment without its target, Wachovia, being taken over by the FDIC. Henceforth regulators can exclude the public for any reason, or no reason at all. And the same predatory lenders who brought about the crisis now stand to benefit from it.

On September 22, Inner City Press asked Federal Reserve chairman Ben Bernanke on what legal basis he has rubber-stamped Goldman and Morgan applications. Bernanke scoffed that legal authority existed, to talk to the Fed's top lawyer, who was in the room. He in turn pointed to a 2 a.m. press release which mentioned emergency and that the transactions would be "consummated immediately." Thus, no court could review the Fed's decision to exclude the public. Any case filed for review would be moot. Click here for that story.


When the Office of the Comptroller of the Currency, a unit of the Treasury Department, later in the week rubber-stamped JPMorgan Chase's acquisition of most of Washington Mutual, at least it could cite to the FDIC's involvement. But on Citigroup - Wachovia, the FDIC has bragged that Wachovia did not fail and was never in receivership. How then can the public be excluded? But the press release states:

"Citigroup Inc. will acquire the banking operations of Wachovia Corporation; Charlotte, North Carolina, in a transaction facilitated by the Federal Deposit Insurance Corporation and concurred with by the Board of Governors of the Federal Reserve and the Secretary of the Treasury in consultation with the President."

So the President approves bank mergers without any public notice or comment. Since the Community Reinvestment Act is only enforced during the public comment period on merger applications, the CRA is effectively being repealed.


Update of September 22, 2008: How did Citigroup slip the bit? Now they're listed as a possible bidder for WaMu...

Update of September 15, 2008: Citigroup said last week that it expects a $450 million quarter-to-date pretax impact on revenue from trading losses and write-downs of Fannie Mae and Freddie Mac securities...

Update of September 8, 2008: Merrill under John Thain has reached down into Citigroup's mortgage operation for James De Mare to run its mortgage trading operations. As reported, De Mare has been with Citigroup for 11 years. He most recently was the firm's global head of mortgage trading, overseeing the trading of all securitized products in the firm's fixed-income currencies and commodities group. Great track record...

Update of September 1, 2008: Citigroup, predatory lending and whistleblowers -- saga continues. Citi last week agreed to pay a $3.5 million penalty for sweeping more than $14 million from customers' credit card accounts into the bank's own funds. Citigroup "knowingly stole from its customers, mostly poor people and the recently deceased, when it designed and implemented the sweeps," the California Attorney General said in a press release. "When a whistleblower uncovered the scam and brought it to his superiors, they buried the information and continued the illegal practice." Sounds like CitiFinancial.... The whistleblower was subsequently fired and filed a sealed wrongful dismissal law suit. Citi did not cooperate with the Attorney General's investigation...

How to explain Citigroup changing Bob Rubin's title to Senior Counselor? Here's our guess -- as the company has gone downhill, the finger has focused on Rubin. He doesn't like it -- just as he denied having any role in Citigroup's predatory lending, saying it wasn't under his "aegis" -- and so he changes his title. But under whose aegis is it?

Update of August 25, 2008: In Iowa, the home mortgage division of Citigroup is closing its operations in Des Moines, eliminating 190 positions, it emerged on August 21. CitiMortgage plans to close the site by the end of November. Of these, 146 workers will only be offered counseling, outplacement services and severance "based on position, length of service and other qualifying considerations," spokesman Mark Rodgers said. CitiMortgage laid off 185 Des Moines employees in March and another 100 in January. The company said it was reorganizing the division and working to reduce expenses by $200 million. Citigroup bought Principal Financial Group's home mortgage operations in July 2004, which then had 800 employees. Citi in Iowa employs about 650 workers throughout the state in its credit card operations and about 120 at CitiFinancial loan operations.

Yes, that's the predatory lending...

Update of August 18, 2008: "If the SEC decides that Citigroup should pay $600 million in connection with Citigroup's representations regarding auction-rate securities, Citigroup may be allowed to deduct this $600 million payment from its taxable income," Sen Charles Grassley has written to the SEC. "To prevent Citigroup from receiving this potential tax windfall at the expense of American taxpayers, the SEC should consider 'grossing-up' the payment by Citigroup to an amount of $923 million." The grossed-up amount would take into account that Citigroup would save $323 million in taxes if it deducted the full payment, based on a 35% tax rate.

This should have been done on Citigroup's two predatory lending settlements...

Update of August 11, 2008: Per WSJ, "the SEC didn’t want to impose an upfront fine against Citi, say people familiar with the matter, while the states pushed for -- and eventually got -- a $100 million fine. Also, as part of the deal, the SEC wants Citi to use its 'best efforts' to help help institutional investors sell roughly $12 billion of auction-rate securities it sold to retirement plans and institutional investors by the end of 2009, or else face possible sanctions from the commission. (In other words, this is the SEC’s version of a deferred-prosecution agreement.)" Another sleazy deal by Citigroup...

Update of August 4, 2008: Back to the future -- now it looks like Citigroup will be sued for fraud in the marketing and sales of auction-rate securities and for destroying evidence...

Talk about a conflict of interest, and regulatory capture -- last week, the regulators and four big banks issued coordinated press releases. "Officials from banking giants Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. issued a joint statement saying, 'We look forward to being leading issuers as the U.S. covered bond market develops.'" And those they issued the statement with and for are supposed to objectively oversee them...

Update of July 28, 2008: As Pandit (who some now call Pandit the Bandit) through his CFO denies any plans to break up Citigroup, this from the WSJ - "the former manager of a Citigroup Inc. hedge fund that collapsed this year has filed a complaint accusing company executives of causing the fund's demise, according to people familiar with the matter. John Pickett, who ran CSO Partners, a fund specializing in corporate debt, from its 1999 launch until he resigned in December, filed a sealed complaint last month in London's Employment Tribunal. That court handles claims against employers. The dispute, which seeks unspecified damages from Citi for allegedly wrongfully forcing out Mr. Pickett, centers on the hedge-fund manager's bid last summer for a big package of loans. Mr. Pickett, who was based in London, tried to back out, saying that the loan terms had changed, making them less attractive. In the complaint, Mr. Pickett claims top Citigroup executives caved in to the demands of investment banks in the loan deal, ignoring the financial interests of CSO's investors, according to people familiar with the matter. CSO eventually went ahead with the purchase, even though the loans were trading below their face value. Mr. Pickett claims the move saddled CSO with billions of dollars in troubled loans, undermining the hedge fund."

Ah, Citigroup...

Update of July 21, 2008: From the earnings: " At Citigroup, about 8.5% of its subprime mortgage borrowers, which make up about 16% of the bank's total mortgage portfolio, have fallen at least 90 days behind on their loan payments, and therefore are considered at high risk of defaulting."

Slinking out of Slovakia, " In Slovakia Citibank of the US made several redundancies after its consumer finance division CitiFinancial was liquidated. At the beginning of 2008 the bank said that it plans to cut 55 jobs in Slovakia out of almost 230 jobs. In the near future Citibank Slovakia will operate as a branch of Ireland-based Citibank Europe."

Update of July 14, 2008: Citigroup now says it will sell its German retail banking operation and some of its affiliates to France's Credit Mutuel, in a $7.7 billion deal. In a statement released Friday, Citigroup said the deal is expected to close in the fourth quarter provided regulatory approvals are granted. We'll see.

More intra-corporate revolving doors: Chuck Prince, whose subprime snafus at Citigroup led to his unceremonious departure, has resurfaced on the board of Xerox, whose CEO Anne Mulcahy is on Citigroup's board. Shouldn't she be charged with knowing what Chuck Prince did?

Update of July 7, 2008: Pandit's pitch about a great turn-around just around the corner is falling on deaf ears. Meanwhile, Threat Level quotes the FBI that Citi's servers were hacked, leading to mass withdrawals from ATMs, the reissuance of cards and, to be sure, some truly sleepless nights from the Citi that never sleeps (except when it comes to consumer privacy)... A New Jersey appeals court last week shot down Citi's request to appeal a lower court's ruling allowing Parmalat SpA to submit evidence regarding looting at the Italian dairy company as part of its $2.2 billion lawsuit against the U.S. bank. Jose L. Fuentes, a judge of the Appellate Division of the Superior Court in New Jersey, denied the bank's motion for an emergency appeal: "Having considered the submissions of the parties, motion for leave to appeal is denied." The lawsuit claims Citigroup aided and abetted a breach of fiduciary duties by corrupt Parmalat insiders who stole from the company - by ignoring the red flags raised by the activity of those insiders - and helped conceal the dairy company's off-balance-sheet debt....

Update of June 30, 2008: As desperate Citigroup looks to sell its German operations, probably to Deutsche Bank, its unions have laid down conditions that "management also emphasizes the need of employees in the talks with the bidders," that working conditions shouldn't deteriorate and the current locations be kept. Citibank's German retail operations, Citibank Privatkunden AG & Co. KGaA, employs around 6,500 people in Germany, at Duesseldorf headquarters and a call center in Duisburg. Can you say fire sale? As noted, Citi's stock is at a 10 year low; it has cut its dividend and been forced to raise, so far, $42 billion...

Update of June 23, 2008: Citigroup has said it's buying a brokerage firm Intra S.A. Corretora de Cambio e Valores in Brazil which has about $745 million in client assets --but would not disclose how much it is paying for the firm. Ah, transparency.... On the spin front, Leah Johnson jumped ship earlier this month after about eight years of spinning, replaced by Kate James, who was Standard Chartered Bank's head of public affairs and strategy for the Americas. James will report to Lisa Caputo, Citigroup's chief marketing officer, whom the company has now put in charge of both marketing and communications operations.

Update of June 16, 2008: This week, Inner City Press / Fair Finance Watch filed comments against the Federal Reserve's secret process with banks, in essence a rule-making excluding the public even those the topic, credit derivatives, has come up because of the subprime lending crisis. The financial institutions invited -- and now challenged -- included Citigroup. The Administrative Procedures Act (5 U.S.C. Section 553) and related laws require that when the government engages in rule-making, it must provide notice to the public, and allow and weigh public comments. Press accounts make clear that the financial instruments and regulatory issues discussed behind closed doors at the FRBNY on June 9 are related to issues of public interest, which in fact are disproportionately impacting low- and moderate- income people and communities of color -- subprime and predatory mortgages. Watch this site.

Update of June 9, 2008: Profiles in spin, in Ad Age, "Lisa Caputo... served as press secretary to Hillary Clinton during Bill Clinton's first term as president. 'Hillary Clinton taught me about grit,' Ms. Caputo says. 'She taught me about work ethic and grace under fire.' Last year, Ms. Caputo tapped those virtues, among others, in leading the strategy to unify Citigroup 's numerous brands into one master brand: Citi. Citigroup previously used Citi as a prefix in many of the company's businesses-such as Citibank, CitiFinancial, CitiMortgage and Citi Smith Barney-but Citi now refers to the company overall. Leveraging the logo's red arc as a symbol of Citi 's capacity to turn financial dreams into realities, 'we've positioned Citi as a partner in helping you achieve financial success in whatever way you define it,' says Ms. Caputo."

Yeah, getting ripped off by CitiFinancial is how many people define success... Let's remember that Citigroup is the only company to twice settled charges of predatory lending with federal authorities...

Update of June 2, 2008: More on rats leaving a sinking ship. After much fanfare in putting him in charge of Citi's mortgages, Bill Beckmann, the president of CitiMortgage, is now leaving Citi at the end of this month "to spend more time with his family." In the memo, Citi's Steve Freiberg says he'll work with Mr. Beckmann, meanwhile, "on a new leadership structure." New leadership is certainly needed, all the way to the top...

Citigroup has been wildly understating its borrowing costs for LIBOR calculations, in order to hide what those in the know think of the company and its prospects...

Update of May 26, 2008: In the UK, after Citigroup infuriated customers by sending out warnings to customers that it would end their agreements in 35 days because they had a "higher than acceptable risk profile," Citi hit another new low, firing employees by conference call. Staff were told to listen in while the business's UK divisional head John Wiggins told them they were fired. Citi under Vikram Pandit: very classy...

Update of May 19, 2008: Broadcasting Citigroup's firm commitment to global predatory lending, the CEO of Citi India Sanjay Nayar said Citi has no plans of exiting its consumer finance business in India. "We have a large portfolio in CitiFinancial which offers finance to low and middle-income consumers. We are not exiting the business but there will be some repositioning, re-segmentation of some consumer base," said Nayar, adding Citigroup had recently infused capital of $250 million into its Indian operations for 2008.

Update of May 12, 2008: This week, from the mailbag --

Re: Your Website

Date: 5/1/2008 4:27:46 P.M. Eastern Daylight Time

From: [Name withheld in this format]

To: webstaff@innercitypress.org

I, too found your website from the Google search, but only after my situation and grown extremely bad. I had a car financed with Arcadia Financial, which was bought out by Citi. I thought things were ok, I am a single mom and have had my problems financially, but always came through. Last year, I had a $530 a month decrease in monthly income. Since my car payments were $518, I asked for help after struggling for several months. I was told, they did not refinance. I would receive letters in the mail stating they would work with you if you had a loss of income. I again phoned and was told I could not do that. I bought this car at the end of 2003 and it was financed for 5 years. At this time, my balance is 12,297. Can you believe this? Furthermore...when I phoned and asked for the payoff on the vehicle, I was told it was $13,320. I told them I was paying the vehicle off and should not have to pay for the remaining time, which God only knows how long that is. Forever it seems. They told me they would receive all the interest and also that I had to pay interest for each day I was late on the payment, even though I had already paid late charges. I informed this lady that this was insane and they were screwing people. She hung up on me. I have been constantly berated, talked to like I was nothing and they act as though I am scum of the earth. I have explained the loss of income and that I was having trouble making the payments as they were. All they could say is, why are you late now? I have spoken with person after person at Citi about this situation and I'm at the end of my rope. If I had another vehicle, they could have this one, because I could buy a NEW car for what they are charging me. Thank you for your insightful website.

Update of May 5, 2008: in a sign of leaving a sinking ship, former Citi-banker Jeff Jaffe was resurfaced as a fellow at Chicago's Center for Financial Services Innovation, which previously nabbed Ellen Seidman from the OTS. Fine fellow that he is, we are hoping for some whistle-blowing... Speaking of Citigroup, from the Washington Post of May 2 we have the story of the owner of the Shark Club of Bethesda, John A. Tsiaoushis, in league with a gaggle of predatory lenders including CitiFinancial. For a house on Pennycress Lane, in January 2005, while Tsiaoushis owed more than $588,000 on the mortgage, he sold the house without repaying it. Court records show he created documents purportedly from the mortgage company, opened a post office box in Beltsville and had the settlement company send checks totaling $586,000 to the "mortgage company's" post office box, which Tsiaoushis then deposited. Using friends and associates, Tsiaoushis helped refinance the house for subsequent buyers. In each case, checks settling the transactions were sent to post office boxes opened by Tsiaoushis, court records show, after he presented phony documents indicating that all liens had been resolved. Court records show that CitiFinancial of Falls Church paid more than $670,000 in a refinancing scam; Accredited Home Lenders of San Diego paid $891,000 to "buy" the house; and Wells Fargo in Alexandria lent $585,000 in a refinancing scheme. First Franklin Financial of San Jose, which made the original, legitimate mortgage on the house, is owed $588,000, court records show."

When sleazy lender First Franklin is the "legitimate" lender in a story, and CitiFinancial and Wells Fargo come in later without any due diligence, you get a picture of the corporate role in the current crisis....

Update of April 28, 2008: From Fortune: "Citi 's board (whose members include Richard Parsons, chairman of Time Warner, parent of Fortune's publisher) has often been accused of being, at best, somnolent. And at this critical juncture in Citi 's history, with the executive suite halved, the board of which Weill was still chairman chose not to name another chief operating officer. As a moment of dereliction, that was a classic." Yep... And this from the ghost-writer of Warren Buffet's annual reports....

From the Fed's Scott Alvarez' April 24 testimony -- "Citigroup recently received a capital infusion from the Kuwait Investment Authority (KIA), the Abu Dhabi Investment Authority (ADIA), and the Government of Singapore Investment Corporation (GIC), one of Singapore's two sovereign investment funds. None of these funds acquired more than 5 percent of Citigroup's total equity... These are all passive investments that have not triggered formal review under U.S. banking law." And is that wise?

Update of April 21, 2008: Citigroup has recently sold - and in some markets closed - retail bank branches "but also said it would expand CitiFinancial, its consumer lending group," the American Banker of April 18 reported, without noting that CitiFinancial is subprime...

Update of April 14, 2008: Institutional Shareholder Services -- hardly a consumer activist group -- urges Citigroup shareholders to vote off the Citi board Alain Belda, CEO of of Alcoa, as well as former Chevron CEO Kenneth Derr, Xerox CEO Anne Mulcahy and Time Warner Inc. Chairman Richard D. Parsons. ISS said it believes Citigroup's compensation committee, which is chaired by Parsons and includes Belda and Derr, "has lacked strong stewardship of compensation practices.'' Yeah, you might say that...

Update of April 7, 2008: In the first study of the just-released 2007 mortgage lending data, Inner City Press / Fair Finance Watch finds that Citigroup in 2007 confined African Americans to higher-cost loans above this rate spread 2.33 times more frequently than whites. Fully 109,511 of Citigroup's 448,542 mortgages in 2007, or 24.41%, were high cost loans over the rate spread.

In its headquarters Metropolitan Statistical Area of New York City, Citigroup was even more disparate, confining African Americans to higher-cost loans above the rate spread 2.61 times more frequently than whites. Citigroup's disparity to Latinos was 1.90.

Citigroup was most disparate in home purchase loans, confining African Americans to higher-cost home purchase loans above the rate spread 3.41 times more frequently than whites. Citigroup's disparity to Latinos was 1.76. Citigroup has acquired Argent, an affiliate of Ameriquest which, like Citigroup, has settled governmental charges of predatory lending.

Update of March 31, 2008: From last week's NYT, consider "Randy and Dawn McLain of Phoenix. The couple decided to sell their home after falling behind on their first mortgage from Chase and a home equity line of credit from CitiFinancial last year, after Randy McLain retired because of a back injury. The couple owed $370,000 in total. After three months, the couple found a buyer willing to pay about $300,000 for their home -- a figure representing an 18 percent decline in the value of their home since January 2007, when they took out their home equity credit line. CitiFinancial, which was owed $95,500, rejected the offer because it would have paid off the first mortgage in full but would have left it with a mere $1,000, after fees and closing costs, on the credit line. The real estate agents who worked on the sale say that deal is still better than the one the lender would get if the home was foreclosed on and sold at an auction in a few months. Mark Rodgers, a spokesman for CitiFinancial, declined to comment on the McLains' situation, citing privacy considerations.

Yeah, right. This is the company that lost millions of consumers' Social Security numbers...

Update of March 24, 2008: The Ohio Civil Rights Commission has ruled there is evidence that Argent Mortgage, which Citigroup has bought and now owns, discriminated against African Americans by targeting them with predatory home loans. The sample case is that of Elizabeth Redrick, a 77-year-old Cleveland resident who was promised by a mortgage broker that her Argent refinance loan would result in lower payments and much-needed cash to pay bills. Redrick's monthly payments on the Argent loan were higher than originally promised and that the new mortgage did not pay off a personal-finance loan as she had hoped. Redrick received only $651 in cash from her refinanced mortgage. Loan documents show that the broker submitted two applications on Redrick's behalf. One application noted that she was white and had a monthly income of $2,630. The other application correctly said that she is black and earns $1,871 a month. The broker who submitted the mortgage to Argent made more than $5,000 from the deal.

And Citigroup bought Argent...

Update of March 17, 2008: From testimony on Capitol Hill on March 13 --

"I came today to testify about my husband's credit card. It was CitiFinancial. He had been a customer for at least 10 years, no late payments, no over the limit. Twice last year, we were over the -- not over the limit, but we made the payment late, and only by a matter of one -- it was like an hour past 5 o'clock, so it was considered the next day. And the other one, we were on vacation. By the time we got back, it was maybe four days late. My interest went from 12.99 percent to 31.40 percent. So when I got the bill in the mail, I was happy to see that I had to pay an extra $400 to $500 every month on my payment. And the interest that was being paid on the card was -- we used to pay maybe $205. It was over $600 in interest.

We tried to work with the card company. They said they'd refer it in six months if we had a good standing. I just felt that's very unfair. Nowadays, who can afford to pay an extra $400 or $500? I understand we were late, don't dispute that. I just wish they'd be more fair in the rates that they're choosing, whether -- even though we were a customer for so many years, there's other people out there that just have situations nowadays. I mean, it's hard out there. Just listen to people, taking consideration before you double and triple their payment. It's just crazy to me...I went on the Web site, just jotted this story down. And, you know, my husband always says things just don't get done in government. That's why he's not here; he has a bad attitude.

But, I mean, something's happening now. They contacted me. Things are being done. And from the hearing today, I really don't believe that -- their argument is, "Oh, it's only a small percentage of people that this happens to." So I urge everyone out there with this kind of story to just send it in..."

Yep.

Update of March 10, 2008: The ACJ notes that in September, Citigroup bought the assets of the mortgage servicing company owned by Ameriquest's parent, ACC Capital Holdings. It also bought the assets of Argent Mortgage. That deal gave Citigroup the servicing rights for the Andronicas' mortgage and $45 billion in other loans... A Citigroup spokeswoman said Friday that the lender was awaiting information from the Andronicas to "determine their eligibility for a modification." Kelly and David Andronica think Citigroup should make things right, especially since the problems with Ameriquest loans were well known when Citigroup decided to buy the Ameriquest servicing company.

Update of March 3, 2008: Now a stock analyst chimes in that, "I do not believe that Mr. Pandit has a strong commitment to this business in the US. He is more oriented to overseas expansion." The same article quotes "Edward B. Kramer, executive vice president for regulatory programs at PCi Corp. in Waltham and a former banking regulator in New York state... whose firm does consulting work for Citi, that 'Sometimes the branch itself doesn't have to be in a low- or moderate-income tract to serve people who live in adjacent and surrounding low- and moderate-income areas.'" But then why don't the regulators act on branch closings in middle income tracts which impact customers in "adjacent and surrounding low- and moderate-income areas"?

Now Citigroup must file reports on its mortgage delinquencies and foreclosures with the Office of the Comptroller of the Currency. Information from October 2007 through February is due by March 31. Better late than never.

Update of February 25, 2008: So Citigroup's Global Transaction Services unit was handed a 10-year contract from the U.S. Department of Defense to provide 1.2 million travel cards to the Army, Navy, Marine Corps, Air Force and about 20 other independent agencies. The new travel cards will activate on Nov. 30-- but how was Citigroup selected? Did the DoD take into account not only Citi's predatory lending, but its new ownership structure? What safeguards are in place? Let's see...

Update of February 18, 2008: At 600 Turner St., Auburn, Maine: CitiFinancial signed a lease for 1,700 square feet at new strip mall. Let the predatory lending begin!

Update of February 11, 2008: While reportedly looking to sell off its subprime in the UK, CitiFinancial is still looking to put down more tentacles in the U.S. and India. In the U.S., the business of Ameriquest's Argent is being continues, and more storefronts are to open. Meanwhile CitiFinancial has its arbitration clause stuck down in a case in North Carolina, where the court found that CitiFi "had initiated 3,700 actions in civil court -- 2,000 collections and 1,700 foreclosures. In that same span, there had been neither a civil action nor an arbitration launched by a borrower," because of obstacles in the arbitration clause, a contract of adhesion. The case is Tillman v. Commercial Credit Loans, Inc. (North Carolina Lawyers Weekly No. 08-06-0106) -- note that Commercial Credit was controlled by Travelers before it bought Citicorp or Associates First Capital Corp...

Update of February 4, 2008: Citigroup last week opened the 2500th storefront of its subprime unit CitiFinancial, which has twice settled governmental charges of predatory lending. It is Citi's growth unit, offering higher priced credit in strip malls nationwide. Few reforms have been implemented on real estate-backed loans, fewer still on Citi's personal loan portfolio. Meanwhile CitiFinancial's CEO Mary McDowell told the American Banker last week, in an article referencing obliquely ICP and this critique, "'We spend a lot of time with community groups to understand what their issues with us were... There is a reason you don't hear about us' from those groups, she said." But time is not all the Citi's spent...

Update of January 28, 2008: In India, Citibank has 39 branches across 27 cities. Meanwhile the subprime Citifinancial has 450 branches pitching unsecured lending and mortgages. CEO Nayar claims the unit has pioneered unsecured lending in India, luring in 2.5 million customers.

Update of January 21, 2008: Chuck Prince, whose predatory frenzy resulted in firing with a $31 million golden parachute, has received an invitation to testify from the House Oversight and Government Reform Committee: "According to press reports, you collected tens of millions of dollars in payments and other compensation upon your departure from Citigroup... You should plan to address how it aligns with the interests of Citigroup's shareholders and whether this level of compensation is justified in light of your company's recent performance and its role in the national mortgage crisis."

Update of January 14, 2008: There's a hole in Citigroup's January 8 memo announcing a consolidated "end-to-end U.S. residential mortgage business" including origination, servicing, and securitization operations, with Bill Beckmann reporting to Carl Levinson and Jamie Forese -- CitiFinancial, Citibank, and Smith Barney would continue to originate mortgages separately. CitiFinancial is a subprime unit, one with most risk, for some reason not included. Meanwhile, the consolidated unit will, according to Citi's Jeff Perlowitz, "be a nonconforming shop." Great...

Update of January 7, 2008: A November 5 lawsuit, which is seeking class-action status, against Citigroup asserts that Citi issued false statements in its November 4 announcement that it would write off $8 billion to $11 billion in the fourth quarter for assets linked to subprime mortgages, losses that spurred the resignation of Chuck Prince. A participant in Citi's retirement plan, of which 32 percent plan is comprised of Citi shares, alleges that the stock is “an imprudent investment” for the program and that risky mismanagement caused the plan to lose well over $1.3 billion in retirement savings. Another shareholder lawsuit followed on November 7, stating Citi officials “recklessly spent billions of dollars of subprime loans leading to losses.” Yep. This is called the chickens coming home to roost...

Update of December 31, 2007: Be aware -- it is CitiFinancial's position that it can access credit reports even of a person who has not applied to it for credit. In Enoch v. Dahle/Meyer Imports, L.L.C., et al., No. 2:05-CV-409 TC (D. Utah 11/16/07, a consumer tried to hold her car dealer, two lenders, and a credit reporting agency liable after she was denied credit. Rosaline Enoch went to Dahle Mazda to buy a vehicle. Enoch chose a car and signed a note for a down payment. Enoch also signed a contract of sale, which stated that the dealership agreed to seek financing for the car loan. Allegedly, the dealership led Enoch to believe that it already had arranged financing. CitiFinancial Auto Corp. denied Enoch credit, and the dealership was unable to arrange other financing. Dahle demanded that Enoch pay for the car or agree to rescind the deal, in which case Dahle would return the money Enoch had paid. Enoch surrendered the car and subsequently sued... The court concluded that when Enoch signed the contract with Dahle, she authorized the dealership to seek credit on her behalf. "Consequently - even though Ms. Enoch did not request credit directly from CitiFinancial - there is no question that Ms. Enoch participated in the request for credit," the court wrote. Be afraid - be very afraid...

Update of December 24, 2007: Citi's real advocacy -- The American Financial Services Association, one of the hardest-nosed subprime trade groups, said Thursday that it has named Elvis Goddard of Citifinancial as the chairman of the advisory board of its mortgage lending division. Goddard oversees more than 550 high-cost CitiFinancial branches across eight states in the South. He began his subprime career there at Aristar Inc., later bought by Washington Mutual Finance Group, then by Citi...

Update of December 17, 2007: With Citigroup giving its CEO and chairman jobs to investment banker, now pundits speculate that the branch bank may be sold, saying Citi's "share in New York is way down from five years ago, when it had nearly 21% market share and 375 branches, because it moved a large amount of deposits from New York City to Nevada." Is that why Citi has felt comfortable doing less and less under the Community Reinvestment Act?

Update of December 10, 2007: Testifying last week in England, Citigroup's CEO for markets and banking for Europe, Middle East and Africa William Mills said Citi manages its seven SIVs at "arms' length" and on commercial terms. But when queried on the bank's responsibility to the SIVs, Mill said: "From a reputational point of view, if we don't step in and support these vehicles, will that somehow hurt our reputation in the market? What the market is trying to establish is, if in fact the liquidity crisis continues, will Citigroup provide the liquidity to fund these vehicles so that they won't have to go into an asset disposal mode, especially in this environment, where people think that would add more fuel to the fire?" Citi apparently cares about its reputation to big-ticket investors -- but less so, when it twice settled predatory lending charges, with the FTC and Federal Reserve...

Update of December 3, 2007: Assets in structured investment vehicles sponsored by Citigroup Inc. fell 20% to $66 billion as of Nov. 30 from $83 billion at the end of September, spokesman Jon Diat said. "We continue to focus on liquidity and reducing leverage," Diat said in an e-mailed statement. Citigroup runs seven SIVs...

Update of November 26, 2007: Goldman Sachs recommended last week that investors sell their stock in Citigroup, saying that Citi faces more write-downs of mortgage-related exposures and may have to cut its dividend to shore up its eroded capital ratios. Citigroup shares had fallen 39% so far this year, after the bank allowed its exposure to mortgage-linked securities to balloon, producing big trading losses and ultimately forcing the resignation of CEO Chuck Prince. According to Goldman's analysts, Citigroup's earnings could be hurt into 2009 by charges related to those exposures and a reluctance to take risks, especially while the bank continues to look for a permanent CEO. "The lack of leadership at this point in Citi's storied history could not have come at a worse time," Goldman wrote.
You call what came before "leadership"?

Update of November 18, 2007: Let's recap: In the third quarter, Citigroup recorded mortgage-related write-downs of $1.8 billion, and now says that it expects to take write-downs of $8 billion to $11 billion in the fourth quarter. Earlier this month, Citigroup disclosed for the first time that it had $43 billion in CDO exposure. This accounted for the bulk of $55 billion in exposure by Citi to subprime-backed securities. Citigroup appears to have written down its CDO holdings by about 20%, compared to write-downs of 30% by Merrill Lynch and Morgan Stanley, Sanford C. Bernstein analysis has it. WSJ: "Investors have fretted about Citigroup's exposure to structured investment vehicles that have recently run into trouble. Analysts say it is unlikely the bank could be forced to take full responsibility for losses within those vehicles." Yeah -- Citi rarely takes responsibility, especially when it comes it predatory lending...

Update of November 12, 2007: It happened. "Given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as chief executive officer is to step down," Chuck Prince said-in-a-statement. Honorable or now, he walks away with an estimated $99 million in vested stock holdings and a pension, according to an analysis by New York-based compensation consultant James Reda. Prince had already pocketed $53.1 million in salary and bonuses over the last four years, Reda said. And of the new chairman? "Since joining Citigroup, Mr. Rubin's performance has vacillated between disappointing to terrible," Richard Bove, an analyst at Punk Ziegel & Co., wrote in a note to investors. Punks...

Update of November 5, 2007: Chuck Prince, who defended Sandy Weill's purchase of Associates First Capital Corporation and lastly engineered Citigroup's takeover of Ameriquest's Argent, is slated to resign, subprime fallout...

From the WSJ last week: "On Aug. 8, Mr. Rubin called Mr. Bernanke. The Citigroup executive said he suspected a lot of people were telling Mr. Bernanke he should have cut rates. Yet Mr. Rubin said he thought the Fed had done the right thing, say people familiar with the call." Questions: is it appropriate for the head of the largest bank's office of the chairman to just dial up the main regulator and shoot the breeze? When that largest bank has massive bets on predatory subprime? What else was said?

Update of October 29, 2007: Citigroup has reported $6.5 billion in credit-related losses, writedowns and extra costs, on its $2.4 trillion in assets... Meanwhile, it's reported that Hungary's Office of Economic Competition (GVH) has fined Citigroup HUF 12 million, saying it misled its customers in advertisements regarding the interest-free usage of credit cards. Citigroup failed to note in its ads that the interest- free usage was only valid when the cards were used for purchases but not for cash withdrawals. The ads also failed to inform customers that the entire debt had to be paid by the given deadline for interest-free usage...

Update of October 22, 2007: What is the purpose of the Master Liquidity Enhancement Conduit being set up by Citigroup, Bank of America, JPM Chase and a few other banks? Not to help consumers, that's for sure. Rather, it's a way to cook their own books, and avoid reporting losses. That non-banks like PIMCO are not participating, despite the U.S. Treasury Department's Paulson's closed-door claims to the contrary to Italian central banker Mario Draghi, is telling. This is all about banks helping themselves. And taking advantage of each other: Inner City Press has learned that JPM Chase's Jaime Dimon has called the conduit an opportunity to make money from his old nemesis Citigroup. "Make it worthwhile," Dimon told Paulson. "Gouge them," Dimon in essence ordered his staff. Just as these banks said of consumers...

Update of October 15, 2007: Citigroup, using the Treasury Department to arrange a bailout, "has nearly $100 billion in seven affiliated structured investment vehicles, or SIVs. Globally, SIVs had $400 billion in assets as of Aug. 28, according to Moody's." That is to say, Citigroup has fully 25% of this market...

Update of October 8, 2007: October's Mortgage Servicing News reports that "Citigroup has acquired the $45 billion subprime servicing portfolio of Ameriquest Mortgage, a transaction that will help it challenge Countrywide Financial Corp. for the No. 1 spot among B&C servicers... Citigroup also purchased Argent Mortgage, a nonprime wholesale lender that is a sister company to Ameriquest... By purchasing the Ameriquest receivables, Citigroup will grow its subprime servicing portfolio to about $110 billion. At the end of June, CFC serviced $125.6 billion in subprime, ranking first in that niche... 'Exercising our option to acquire the assets from ACH's wholesale origination and servicing business allows Citi to secure valuable and scalable platforms in a market undergoing significant change,' said Jeffrey Perlowitz, head of global securitized markets for Citi's fixed income, currencies and commodities division, where the assets will reside."

But why would Argent's origination capacity "reside" in Citigroup's investment bank? We'll have more on this. For now, south of the border we note that in the 12 months to June 2007, Citigroup in Mexico opened 207 retail bank and consumer finance / Citifinancial branches, spreading predatory lending without standards...

Update of October 1, 2007: The Detroit News of Sept. 28 lists Citigroup as one of top three lenders for cosmetic surgery -- Citi Health Card: www.citibank.com/us/cards/cardserv/healthcrd/ -- How do you think they foreclose? Someone should ask Chuck Prince, Robert Rubin et al. -- is this the democratization of credit? Or is it predatory lending?

Or how about this, from USAT -- Citigroup is issuing 3.5 million credit cards to department store customers who didn't request them... This month, Citi is sending general-purpose MasterCards to Macy's customers with credit card accounts that have been inactive for two to four years. Citi bought those credit card accounts last year....

And this just as the industry is said to be reconsidering its predatory lending practices, the largest, Citigroup, sends out unsolicited credit cards...

Update of September 24, 2007: A Citigroup employee has leaked thousands of consumers' Social Security numbers and mortgage information over Lime Wire... Meanwhile, Geovic Mining Corp. announced that its 60%-owned subsidiary, Geovic Cameroon, PLC, has named Citigroup as its exclusive financial advisor for the development and construction of its Nkamouna cobalt-nickel project in Cameroon. Ah, resource exploitation...

Update of September 17, 2007: From the mailbag--

Subj: CitiMortgage Realignment May Reduce Oversight for Predatory Lending

From: [Name withheld - anonymity granted]

To: Matthew Lee [at] innercitypress.org

Date: 9/5/2007 10:36:15 AM Eastern Standard Time

Dear Mr. Lee,

Please protect my anonymity, as I will be subjected to retaliation if it becomes known that I have communicated with you. Thank you in advance.

Last year, Citi convinced Federal and state regulators to allow it to merge its non-prime lending unit, CitiFinancial Mortgage, into CitiMortgage, Inc., its ostensibly prime lending unit. The reasons given for the merger were the usual: gaining economies of scale and presenting a single face to the marketplace. Along with the approvals for that merger, Citi received relief from many of the restrictions designed to prevent predatory lending, which were conditions of its acquisition of Associates First Capital in 2000 and subsequent settlements with regulators. Due to the tight controls it operated under, CitiFinancial Mortgage was only participating in an estimated 40% of the sub-prime mortgage market - for example, "stated income loans" were only a minuscule percentage of its volume, while other lenders were seeing 60% and more of their volume in "stated income loans". "Stated income loans", especially to people living on fixed income, have a higher propensity to be predatory, since the borrower's ability to repay is not determined.

CitiFinancial Mortgage also examined each loan it originated, or purchased in the secondary market, for real benefits to the borrower, going well beyond the "tangible benefits tests" touted to regulators and consumer protection activists by not only Citi but by many other lenders, as well. These "tangible benefits tests in fact give credit for largely illusory benefits. Carefully scrutinizing applications for real benefits is a practice which Citi's prime lending unit does not follow. Regardless of the reasons for the merger, by burying its sub-prime unit inside its prime unit, Citi has opened up the business to originate and purchase loans that formerly would not have met CitiFinancial Mortgage's standards for benefit to the borrower, or restrictions on predatory lending, and has made it more difficult for regulators and consumer protection activists to see what is happening with sub-prime lending at Citi.

Yesterday, hot on the heels of the announcement that Citi would acquire what is left of former number one sub-prime lender Ameriquest, Citi executives Al Tappe, Fred Bader, and Daniel Wu announced the that mortgage underwriters will no longer report to the Credit Risk Management department, but instead report to the Operations department. This "realignment" was billed as a way to become more efficient and more customer friendly. Such a move is puzzling during a time when mortgage default rates are rising across the entire industry, and, industry-wide, foreclosures are increasing at alarming rates. However, sources within Citi revealed a possible explanation: despite the 2006 merger of CitiFinancial Mortgage into CitiMortgage, Credit Risk Management has continued to resist the pressure from Citi executive management to relax controls on customer qualifications and predatory lending. By moving underwriters to Operations, Credit Risk Management will no longer be performing: daily supervision of underwriters, conducting underwriter performance evaluations, determining underwriter merit increases, and will no longer be in a position to influence their day-to-day decisions. So resistance will be reduced or eliminated to the pressure to approve loans without adequate assurance that the loan benefits the customer and the customer has the ability to repay.

It is important to note that the CitiFinancial branch network of consumer finance offices, which also makes mortgage loans, operates completely independent of the centralized CitiMortgage business, and isn't affected by either the Ameriquest acquisition or this realignment of underwriting within CitiMortgage.

Developing... Meanwhile, Citigroup's Mexican banking arm Banamex and a group of Mexican investors said Wednesday they plan to launch a $150.7 million counter offer for airline Consorcio Aeromexico SA (AMEXICO.MX), which is currently the target of a takeover bid by two local businessmen. Banamex said the group has requested authorization from the National Banking and Securities Commission and the Federal Competition Commission.

What about the U.S. Federal Reserve, putatively Citigroup's comprehensive supervisor? Citigroup can own airlines outside of the U.S.?

Update of September 9, 2007: Another Citigroup connection to the depths of subprime -- its "mortgage warehouse lending unit has stopped accepting new customers, according to a person familiar with the matter. The unit, First Collateral Services Inc., offers mortgage companies credit lines of up to $250 million, which allow the firms to fund their purchases and refinancings of mortgages. Amid this year's mortgage meltdown, some warehouse lenders have pulled credit lines from existing customers, essentially pushing them out of business. As of March 31, First Collateral was the nation's No. 5 warehouse lender, with $4 billion in outstanding commitments." First Collateral, based in Concord, Calif., is continuing to finance its existing customers" -- and why haven't the identities these Citi-enabled lenders been disclosed?

Update September 3, 2007: With Subprime Hot Air in DC, Cold-Blooded Citigroup Buys Ameriquest, Byline: Matthew R. Lee of Inner City Press

As President George W. Bush and Federal Reserve chairman Ben Bernanke Friday wrung their hands in Washington about the subprime mortgage meltdown, New York-based Citigroup announced it was buying a chunk of admitted predatory lender Ameriquest. Citigroup is a meta-predator, taking advantage of the foreclosure boom to scoop up one of the most abusive lenders at a temporarily reduced price. The head of Citigroup's "global securitized markets" unit, Jeffrey Perlowitz, said the takeover "allows Citigroup to secure valuable and scalable platforms in a market undergoing significant change." Some thought predatory lending was a market being discredited and shrinking. To Citigroup, it's just change that can be scaled up.

The founder of Ameriquest, Roland Arnall, who has made billions from predatory lending, was nominated by President Bush as Ambassador to the Netherlands. While a few U.S. Senators delayed his confirmation until Ameriquest finalized a settlement with state attorneys general, now Arnall will profit again, selling the remainder of the company to Citigroup. The losers in the deal are the borrowers from whom Citigroup will even more ruthlessly squeeze payments on loans that were misleading and abusive from the start, and future borrowers whom Citigroup will target with the ex-Ameriquest "scalable platform."

Citigroup's own existing platform has made it the only lender to have twice settled predatory lending charges with Federal agencies, for $240 million with the Federal Trade Commission, and another $70 million in 2004 with the Federal Reserve. Since then Citigroup's high-cost lending has gotten even more racial disparate.

2006 was the third year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. Citigroup in 2006, in its headquarters Metropolitan Statistical Area of New York City, confined African Americans to higher-cost loans above this rate spread 4.41 times more frequently than whites, according to Fair Finance Watch. Citi's disparity to Latinos was 2.38. Meanwhile Citigroup is now buying a unit of Ameriquest, 91.65% of whose loans in 2006 were subprime.

Citigroup loves subprime, and has no scruples in this field. Its corporate DNA goes back to a Baltimore-based predatory lender called Commercial Credit, which Sandy Weill and Charles "Chuck" Prince took over in the 1980s. After their company, by then called Travelers, acquired Citicorp in 1998, the next big deal was to scale up subprime lending, by taking over Associates First Capital Corporation, which was being sued for fraud all over the country.

Now Citigroup buys Ameriquest, another well-known predatory. Citigroup's subprime regrets, if they exist, include losing out on Household International, which settled predatory lending charges for $486 million, to HSBC in 2002. Now Citigroup is back in the game, and big deal. Borrowers, be afraid, be very afraid. Even the downturn, Citigroup just re-loads for the next hunting season...

At Citigroup's annual shareholders' meeting on April 17, 2007, Chuck Prince stood alone on the stage of Carnegie Hall, as Sandy Weill used to do, and took questions. Inner City Press asked about Citigroup's 2006 lending record -- confining African Americans in New York to higher cost loans 4.4 times more frequently than whites -- and about Citigroup's then just announced proposal for "propping up and taking an option in Argent," an affiliate of Ameriquest.

"Good question," Prince began. Argent "is a company that has restructured itself. This is a company that has settled with regulators." He said it is a situation of "good bank, bad bank" and claimed that Citigroup is only thinking of buying the good part.

But it was Ameriquest that announced reforms, none of which have been implemented at Argent. Prince cut in. "We're not going to buy anything unless it's cleaned up." So in the turbulent five months since, have Ameriquest and Argent really been cleaned up? Or have prices hit bottom, leading Citigroup to pounce? Prince said, "we've had reputation issues in the distant past, we're not going down that road." And now, while other wring their hands to come off as concerned, Citigroup is rushing headlong with Ameriquest further down the road of predatory lending.

Update of August 27, 2007: Citigroup snuck into South Korea in 2004 via KorAm. Now HSBC faces hurdles, which Citi should have faced...

Update of August 20, 2007: From the august (15) Argus Leader in South Dakota:

The court of public opinion already appears polarized on what critics call predatory lending practices - companies charging exorbitant interest rates and penalty fees. "'It's not illegal, but it's very unethical,' said Richard Cook, a former federal government analyst and author who lives in College Park, Md. 'It's legalized loan-sharking. It was one of the specialties of the Mafia. But that's one organized crime doesn't have to do now because it's legalized.' Sioux Falls Mayor Dave Munson, who worked 18 years for Citibank, calls that criticism unfair." So, from Citibank to mayor in the city Citi ran to, to export high rate, which are called "unethical" by an ex-Fed consultant...

From Deal Journal: " No one outside Citigroup knows just how much the meltdown in global credit markets has cost the banking giant, but that hasn’t stopped analysts from guessing. Sanford Bernstein estimates Citi could take a $2 billion to $3 billion hit to its third-quarter earnings from the meltdown in the subprime mortgage market and the steep decline in leveraged-buyout-related loans and bonds. It could post losses of $1.2 billion to $1.5 billion on buyout loans loans and $500 million to $1 billion on subprime mortgages in the period, according to this writeup of the analysis from Bloomberg. No one knows the extent that Citigroup may have hedged its exposure to the risky debt, so the final tally of the damage won’t become clear until Citi reports its results."

And even then...

Update of August 13, 2007: Citigroup last week announced its acquisition of Waco, Texas-based Big Red -- a soda company. Citi then brought in a new manager from Red Bull. Meanwhile, Citigroup is said to be hunting for SunTrust...

Update of August 6, 2007: Citigroup says it is not considering bailing out of a deal to finance the acquisition of energy provider TXU Corp., despite reports to the contrary. What was that, about Citigroup's environmental standards?

Update of July 30, 2007: Citigroup on July 24 was fined $50 million by the New York Stock Exchange's regulatory arm for using deceptive market-timing practices on behalf of hedge funds. The market-timing was reportedly widespread, involving more than 150 financial consultants in 60 branches in about 250,000 marketing-timing exchanges on behalf of more than 1,100 customers...

Update of July 23, 2007: With all the rah-rah about Citigroup's earnings, its subprime lending was hardly mentioned... Meanwhile, it bought a take in Chile, to expand that very lending...

Update of July 16, 2007: Citigroup, sued last week in the U.S. for racial discrimination in mortgage lending, claims it has industry-leading practices. At a higher level, from Citi's point of view, its CEO says the company wants to list on the Tokyo stock exchange "as soon as possible"...

Update of July 9, 2007: From North Carolina, Citi's live checks: "a 78-year-old resident of Carolina Spring Apartments received a notice in the mail... appeared to be a real check from CitiFinancial Auto Corporation in Irving, Texas, a company that lends money for car loans over the Internet. Rob Julavits, spokesman for CitiFinancial Auto, saw a copy of the check that the Carolina Spring resident received, and said it was a fake. 'It is not a legitimate CitiFinancial Auto check,' he said. 'We are looking into the matter.'" Whether the check was authentic or not does not answer whether CitiFinancial continuing to send live checks to senior citizens is legitimate...

Also this week, an ex-Fed regulator who monetize his expertise and access at Citigroup -- "If it's now 2007 and the control failure occurred in 2005, 2004 ... is there going to be any value to law enforcement, any value to the government in finding things that happened two or three years ago and reporting it now?" The speaker of these words was identified by the American Banker newspaper as "Richard Small... a former top anti-laundering official at Citigroup Inc. and the Federal Reserve Board, where he was a deputy associate director in the division of banking supervision."

Update of July 2, 2007: Shares in Banco de Chile SA jumped on Friday after the company said its parent, Quinenco SA (QUINENCO.SN), had resumed negotiations with Citigroup. Late Thursday, Banco de Chile said that Quinenco, an investment holding company, had "reinitiated conversations with Citigroup to carry out a strategic association of its financial operations in Chile." Predatory lending descends on Santiago...

Update of June 18, 2007: Citigroup will have to go on trial for market rigging related to Parmalat SpA's collapse in 2003...

Update of June 11, 2007: Citigroup complains that in India it can only set up branches in Akola and Nanded in Maharashtra and Kurnool in Andhra Pradesh, and not in the metros or the big cities where it wants to expand its presence much faster. India had decided to block proposals for fresh licenses from American banks since the US has been sitting on applications submitted by State Bank of India, Bank of Baroda and ICICI Bank for many years. Live by the sword, die by the sword... US Trade Representative Susan Schwab promised that she would help the treasury department, the Federal Reserve and the Indian banks sit across the table and discuss the issue. Fed politics... Reportedly, the commerce ministry as well as RBI were against granting any concessions to US banks but it was the finance ministry which suggested that a different strategy could be tried and then leave it to the US to act. So the Fed operates for Citigroup, again...

From the mailbag, a correspondent we're glad to hear from again --

Subj:Citifinancial
From: [Long Time District Manager]
To:mlee [at] innercitypress.org
Date:6/7/2007 4:04:09 PM Eastern Standard Time
Hi Matthew! It's been a very long time!
I am the "Long Time District Manager" who had written to you w/some information on Citifinancial's credit insurance sales practices, sales finance account solicitation practices, Customer Appreciation Days activities, incentive payout information, etc.... I worked for Citifinancial as a Regional Trainer for about three years, as well District Manager for about four years. My total tenure w/them was 14 1/2 years - add in the 5 years that I spent at The Associates, and it was close to 20 years. I ceased communication with you because I would find myself getting sick at the thought of contributing this information only to remind myself of how utterly deplorable this organization truly is, and yet to know that Citi would never realize any repercussions beyond the millions of dollars in fines and penalties that they so easily afford to make the issues go away.

Well today I had to deal w/Citi regarding my Pension. I left the organization in May 2003 after spending 14 years there. Remember, prior to working for Citi, I spent 5 yrs w/The Associates Financial Services. (Yes, what an idiot in professional compromise!) Prior to leaving in 5/03, I exercised what options that I could, and confirmed my pension status. I was informed at that time - verbally and in writing - that my tenure at The Associates was grandfathered into my tenure at Citi. I was given statistics regarding my pension income based on my monthly payments at 55 yrs of age (5/2015), and at 65 years of age. Imagine how relieved I was to find that my 190% commitment to this God Awful organization at least left me with a pension plan worth $932 per month if I retired at 55, or $1660 per month if I retired at 65. It truly made me stomach my existence there with a little less of a vomitacious gag.

Well, last year at this time I ordered the same bit of information in order to share it w/a financial person much more savvy at this business than I. I never got around to sharing that information w/him and in the meanwhile I had the info. So today requested said info again. Guess What? Now Citigroup tells me that I was not fully vested at The Associates nor at Citi, and my pension value is now $204 per month at 55, and $463 at 65! I am beside myself! How can this possibly happen?
Here is the company that tells their employees how important their personal wealth is to them. Remember, Matthew, not only was I a DM for 4 years, I was a Regional Trainer for 3 years. I heard and beleived their stated employee and corporate goals for as long as I was there. (Good ol' K.C. Mead w/all his arrogant evangelical swagger!) You can only imagine how livid I am.

Matthew, I was a very hard working, dedicated, successful employee for that organization for years. I had a very good reputation with them up until my last 3 or 4 years there. I just got sick of how they treated their people and made their outlandish demands through their DMs, and finally started pushing back. At the same time that I was falling out of favor w/them, I was diagnosed w/lupus. After I took a 1 1/2 disability leave from there due to the effects of lupus, I really fell out of favor with them. ( I am sure that I shared this with you once before, and I don't want to sound pathetic by repeating myself, but.....After my return to the job, I had a very chastising visit made to my area by Managing Director, Donna Delude (yes, this is the same manager whose style resulted in a suicide of one of her Distirct Managers in the mid-1990s) and Region Manger, Jan Showalter. During that visit, Delude didn't spare the opportunity to suggest that my LOA may have been bogus by commenting on how "...buffed [my] arms...." were. You know, just hangin' out at the local gym, Donna. Admittedly, I probably could have pushed back with a bit more finesse. But I just didn't. I was immediately taken off of anyone's short list for promos, etc. That was fine, I had resigned myself to how things were there and how I was to blame for continuing to allow and accept their treatment. It was just weeks thereafter that I quit. However, my battles with them obviously will continue - at least for awhile! Off to the AG!

Update of June 4, 2007: Who, you ask, is the second biggest contributors to Dodd for President 2008, as the candidate continues saying that no new laws to counter predatory lending are needed? It's Citigroup..

CHRISTOPHER J. DODD (D)
Top Contributors

SAC Capital Advisors $207,300
Citigroup Inc $139,950 -- Citifinancial, settled predatory lending charges....

Just another Citigroup deal, which last week announced it has made a minority investment in the BATS ECN, a fast-growing market center offering trading in U.S. equity securities. "We are pleased to invest in BATS Trading, which complements our in-house electronic execution capabilities as well as our ongoing strategic and financial investments in this space," said James Pak, Head of Market Structure Investments at Citi.

Update of May 28, 2007: A leaked Citigroup memo by Steve Freiberg says that Ray Quinlan has decided to retire as president of retail distribution in the North American division of Citigroup's consumer-banking unit. Peter Knitzer will temporarily take charge of New York-based financial services company's operations in North America. The subprime Citifinancial unit will report directly to Freiberg. Citigroup also named Ed Eger head of international credit cards. He will report to Ajay Banga, Freiberg's fellow co-chairman in the global consumer group. Predators all...

Update of May 21, 2007: From a National Mortgage News report last week, 2006 subprime mortgage volume and status of " CitiFinancial (e) $23,500 Parent stopped reporting B&C vol in 06." How transparent... And how 'bout this? Citigroup has now purchased a 10% stake in RRR, formerly ZAO Centrosol, a railway car leasing company in Russia...

Update of May 14, 2007: Last Tuesday Citigroup made a greenwash announcement in the FT's pink pages. On Wednesday, under the headline "Citi's Green Push Underwhelms Environmentalists," the WSJ walked through the pledge, then quoted one of group's Citigroup in its annual reports and elsewhere characterizes as its partner... From Gazeta in Brazil: "About the possibility of new purchases, Gustavo Marin, the 49-year-old Uruguayan who for seven years has been president of Citi in Brazil, brushed them aside with an 'I don't know' yesterday during an exclusive interview with this publication. 'But our aim is not to be the biggest bank in Brazil, just the best,' he declared. Marin also avoided commenting on the biggest bank merger deal underway, the purchase of the Dutch bank ABN Amro - Citigroup is legally blocked from speaking on the case, since it is an advisor to one of the candidates, the British Barclays."

Update of May 7, 2007: CitiFinancial made the fifth-most subprime loans through the correspondent channel in 2006... Citi's new target, Argent / Ameriquest is up to its old tricks, this time in Washington State. Just as Ameriquest and Argent sued in Texas to block the release to Inner City Press of predatory lending-related document requested under Freedom of Information laws, now Ameriquest and Argent are doing the same out West. And this is the company that Citigroup has propped up and wants to buy...

Update of April 30, 2007: It was reported last week that CitiFinancial's subprime mortgage lending grew 15% from 2005 ($20.5 billion) to 2006 ($23.5 billion). And if they buy Argent...

Citigroup analysts said GE should spin off NBC Universal, GE Money and the real estate division. "GE's size and complexity is working against investor interest in the stock and has contributed to further valuation erosion," the Citi analysts wrote. Talk about the pot calling the kettle black...

Update of April 23, 2007 --At Citigroup, Prince Eyes Predatory Argent, Standing Where Sandy Weill Once Stood

At Citigroup's annual shareholders' meeting on April 17, Chuck Prince stood alone on the stage of Carnegie Hall, as Sandy Weill used to do. Prince propped up his presentation with PowerPoint slides and two videos. The first was of Citigroup's volunteer day in 100 countries, from Guam to Pakistan. The second was of the new "Citi" brand, which Prince described as "representing everything our company stands for."

Inner City Press asked how these state principles are consistent with Citigroup's 2006 lending record -- confining African Americans in New York to higher cost loans 4.4 times more frequently than whites -- and with "propping up and taking an option in Argent," an affiliate of admitted predatory lender Ameriquest.

"Good question," Prince began. Argent "is a company that has restructured itself. This is a company that has settled with regulators." He said it is a situation of "good bank, bad bank" and claimed that Citigroup is only thinking of buying the good part.

But it was Ameriquest that announced reforms, none of which have been implemented at Argent. Prince cut in. "We're not going to buy anything unless it's cleaned up." Prince and Citigroup appear to be in denial. Prince said, "we've had reputation issues in the distant past, we're not going down that road." We'll see.

The question arose during discussion of those re-nominated to Citigroup's board of directors, including former Treasury Secretary Robert Rubin. During another Citigroup subprime purchase in the past, Inner City Press asked Mr. Rubin to comment on the fair lending record of the target, Washington Mutual's finance company. "That's not really under my aegis," Mr. Rubin answered.

Among the shareholder-speakers on Tuesday, much invective was directed at Robert Rubin, for being primarily concerned with his own compensation. In 2006 Rubin's compensation was over $15 million; Prince's was $24 million. Rubin would qualify for more if terminated, which his employment agreement defines as including any "diminution of Mr. Rubin's position." Nice work if you can get it.

Citigroup will be participating Wednesday in Washington in a mortgage "summit" convened by Sen. Chris Dodd -- a summit that was closed to the press, although a press release about it was sent out. Citi has been a good friend (read, donor) to Sen. Dodd, and at the summit, Citi's counter-parties would largely consist of groups that it has funded. Afterwards, Dodd announced that he sees legislation as unnecessary. On Tuesday in Carnegie Hall, Prince showed a slide of laudatory quotes from Sen. Dodd and Rep.'s Bachus and Frank. It's nice to have friends. It might allow you to buy another predator.

Other board members also tasted fire. Kenneth T. Derr, listed in the proxy statement as the long retired chairman of Chevron Oil, was fingered as more recently involved in the bankrupt Calpine Corp. It was pointed out how much better AT&T did after Michael Armstrong left it. Andrew Liveris of Dow Chemical has faced shareholders' action and protests on environmental grounds. The U.S. CIA's John M. Deutsch would, the proxy says, "retire from Schlumbeger Limited's Board of Directors on April 11, 2007." Chuck Prince was asked why, instead of moonlighting on Johnson & Johnson's board, he doesn't "stay home" and focus on Citigroup. Prince turned that into a joke, as he did two references to Mad Money's predication that Citi's shares would rise five dollars if Prince quit. "I guess I should watch more TV," Prince deadpanned.

Prince propounded his business model, to open branches, to build consumer lending. He showed a photograph of a branch surrounded by well-water lawns. "That," he said, "is in Bangalore, India." He added that Citi's 1200 new branches in 2006 constitutes the fastest branching "in recorded history." And before history was recorded, how many branches were being opened?

Citigroup has and opens more subprime finance offices than prime-lending bank branches. Citi stands for subprime, a model it takes global. "We're the only ones who can do it," Citigroup-ers said on film about their 100 countries reach. That's the problem....

Update of April 16, 2007: Last year, the Office of the Comptroller of the Currency sued in New York to assert that only it had jurisdiction over the national banks owned by Citigroup. New York's attorney general ended up acting on lending disparities only at Countrywide Financial, which had yet to shift its lending under the umbrella of Federal law. Now from the just-released 2006 HMDA data, for purposes of comparison, Countrywide in 2006 in New York State confined African Americans to higher-cost loans above this rate spread 1.7 times more frequently than whites. Citigroup was more disparate than Countrywide, while denying 35.5% applications of African Americans, and 33% of applications from Latinos, versus only 21.5% of application from whites.

Meanwhile, Citigroup last week trying to save Chuck Prince's job announced 17,000 job cuts, including 1,600 in New York....

Update of April 9, 2007: In a study of the just-obtained 2006 mortgage lending data, ICP & Fair Finance Watch have identified disparities by race and ethnicity in the higher-cost lending of some of the nation's largest banks. 2006 is the third year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. Among other findings, Citigroup in 2006, in its headquarters Metropolitan Statistical Area of New York City, confined African Americans to higher-cost loans above this rate spread 4.41 times more frequently than whites, according to Fair Finance Watch. Citi's disparity to Latinos was 2.38. Meanwhile Citigroup has propped up and taken an option to buy Argent Mortgage, 91.65% of whose loans in 2006 were subprime. Citigroup was most disparate in the lowest-income borough its headquarters city. Citigroup in 2006 confined borrowers in Bronx County to higher cost loans 19.6 times more frequently than borrowers in Manhattan. The disparity between Manhattan and Brooklyn at Citigroup in 2006 was 14.77. Citigroup was disparate in Metropolitan Statistical Areas all over the country in 2006. In Los Angeles in 2006, Citigroup confined African Americans to higher cost rate spread loans 1.70 times more frequently than whites; its disparity for Latinos was worse, at 1.90. Citigroup's African American to white disparity in the Chicago MSA in 2006 was 2.44. Nationwide and Citigroup in 2006, 59.24% of African American borrowers were confined to higher cost loans over the rate spread, versus only 31.62% of whites. In response, Citigroup gave a quote-by-rote to Reuters. Banks Prone to Sell Minorities Pricy Loans," Reuters / Washington Post

Update of April 2, 2007: It's been reported that Citigroup will lay off 15,000, and more 14,000 jobs from higher-cost areas like New York City, Hong Kong and London to places like India, Cincinnati and Buffalo. Of this last, Citi told The Buffalo News that some of the plans to move jobs to lower-cost markets were under way already and are separate from the cost-cutting plan being developed by new COO Robert Druskin...

Update of March 26, 2007: To the Dodd hearing last week, the Federal Reserve sent regulator Roger T. Cole, who finally acknowledged that "we could have done more sooner," while making much of the less than a handful of actions the Fed has taken, including its $70 million fine of Citigroup in 2004. But again, why was Citigroup not invited by Senator Dodd?

Update of March 19, 2007: Key line from the L.A. Times' story on the mass layoffs at ACC / Argent / Ameriquest: " By drastically cutting costs, the company could be making itself a more viable candidate for a sale." Our take? This way Citigroup gets the layoffs done before it acquires the company...

From March 14 WSJ: "Citigroup Inc. Chairman and Chief Executive Charles Prince got total pay for 2006 valued at $26 million during a year when profit at the giant bank fell more than 12%." Then Mad Money named Prince the Number One on the Wall of Shame, worth upon exit $9 per share...

Update of March 12, 2007: From Deval Patrick, following his $360,000 a year part-time service on the board of directors of the predatory lender Ameriquest / ACC: "As a former board member, I was asked by an officer of ACC Capital to serve as a reference for the company and agreed to do so. I called Robert Rubin, a former colleague from the Clinton administration and an executive at Citigroup, to offer any insight they might want on the character of the current management... I appreciate that I should not have made the call."

And they said that Citigroup's subprime lending is not under Robert Rubin's "aegis"...

CitiFinancial is a named defendant in a class action lawsuit for violating the Fair Credit Reporting Act by buy people's credit histories to target them with high-cost loans...

And now Citi wants a bank in Taiwan, and Nikko Cordial in Japan? From the mailbag:

Subj: Citigroup trying to take over Nikko in Japan
Date: 3/6/2007 8:06:43 AM Eastern Standard Time
From: [Name withheld in this format]
To: Inner City Press
Check it out and add it to your website. These Citi people are true bastards and we can only hope that the Japanese aren’t foolish, or desperate enough, to fall for it. Maybe you should send a copy of your information on Citigroup, (or at least a link to your website), to the Japanese Embassy in New York City and also to the Nikko Cordial Corp. …and let the Japanese people know exactly what kind of scum they are dealing with here.

I’m ashamed as an American to admit that Citigroup’s headquarters is based in the USA. (Maybe that’s one of the reasons that the rest of the planet hates us so much!)
I’ve had my own dealings with Citi, Citigroup, Citibank, Citifinancial, Citi-U, and whatever other names they want to call themselves. I was finally able to pay them off, break free of the Citi BS, and get my life back. They are still trying to ruin my credit, but this too with pass and be corrected with time. I have been a loyal customer of Sears and Kmart for over 40 years. I’ve spent tens of thousands of dollars at Sears and a great deal at Kmart also, but now I will never buy even so much as a bolt or pack of gum from either one of them again. Because they have joined forces with Citigroup, and let them take over their credit card business, they have lost me for a customer, forever. I’d rather drive farther, go and pay more for something, at another retailer, than hand anymore of my money to a group of idiots that support and agree with Citibank policies.

Many thanks to ICP for trying to expose these people for what they really are. I only wish you could get all the big people in Washington, DC to stop having lunch & cocktails with them, or playing golf with them on Saturday’s. A twenty million dollar fine, is just a slap-on-the-wrist joke to Citigroup. Let’s take over their assets and pay off the national debt, shut them down, and throw their executives, (retired or not), in prison for about forty years or so. It’s about time that our government starts doing something about the real evil in the world. It’s not Iran, Iraq, or the Korean’s, …it’s Citigroup!

Update of March 5, 2007: Citigroup is the bottom feeder of the subprime lending world. Its 2000 acquisition of Associates First Capital, a lender which had just been profiled on nationwide television as a predator, is now echoed in 2007 with the propping up of Ameriquest, fresh from settling charges of abusive lending with state attorneys general. In between, Citigroup had to settle predatory lending cases with the Federal Trade Commission and the Federal Reserve Board. Those who blamed Citi's lack of standards on Sandy Weill must now acknowledge that Chuck Prince shares Sandy's predatory predilections.

"ACC Capital also said it has secured fresh working capital from Citigroup's Markets and Banking Division and from ACC's majority shareholder, who is Roland E. Arnall, the U.S. ambassador to the Netherlands." But wasn't Arnall supposed to be out of business with Ameriquest while serving as (bought) Ambassador?

Update of February 26, 2007: Ex-journalist now defends CitiFinancial's fraudulent 21% loans. From the Milwaukee Journal-Sentinel of Feb. 24:

For 37-year-old Christopher Wiberg, being a friend means helping out, no questions asked. So when a friendly woman persuaded him last fall to take out a high-interest loan at CitiFinancial on her behalf -- and promised she would pay him back -- Wiberg believed her. But she wasn't really his friend. And she never paid him back. She disappeared. Wiberg is diagnosed with mild mental retardation. He has no bank accounts, no credit card and an annual income of $15,800. Yet he got stuck with a bill of $8,117. After a call from a Journal Sentinel reporter Thursday, Citibank corporate spokesman Rob Julavits said Friday that Wiberg's loans had been forgiven... In Wiberg's case, he said he was working at a Pick 'n Save on Milwaukee's northwest side last fall when he met this woman. They exchanged phone numbers. The Journal Sentinel is not naming her because no criminal charges have been filed and she could not be reached. The woman persuaded Wiberg to go with her on Oct. 9 to CitiFinancial at 7600 W. Capitol Drive. They sat together and filled out a loan application. Hers was denied. His was approved. His credit history: a paid membership at Bally's Total Fitness and regular payments of his We Energies bill. The woman promised Wiberg she would make the payments if he took out the loan. "She just seemed so dang nice," Wiberg said. Wiberg said he told the loan officer that he was developmentally disabled before he signed and initialed on the dotted lines. Wiberg got a check for $3,500, cashed it, and gave the money to the woman. Later that month, he withdrew another $1,500. After two months of phone calls from CitiFinancial demanding payment, Wiberg finally told his sister, who told his mother. Julavits wouldn't comment on the specifics of Wiberg's case, citing privacy issues. "The loan was appropriate and it met all of our underwriting guidelines, but given the circumstances we decided to forgive the loan," Julavits said. Loan documents show that Wiberg was paying 21% interest.

From the department of chickens-come-home-to-roost, on Feb. 23 Citigroup acknowledged that the Securities and Exchange Commission is probing its treatment of tax issues related to its $26.7 billion acquisition of Associates First Capital in 2000. The investigation focuses on the treatment of certain ''tax reserves and releases'' from 2000 to 2004, the bank said Friday in its annual financial filing. The S.E.C. has subpoenaed witness testimony and certain information related to accounting and internal controls for the years 1997 to 2004, Citigroup said. The company said it is cooperating with the investigation. A Citigroup spokeswoman declined to comment. The bank completed its acquisition of Associates First, the biggest American consumer finance company at the time, in November 2000. Click here for our coverage of that deal.

Update of February 19, 2007: So Chuck Prince last week went hat in hand into the desert, to the camp of Prince Alwaleed bin Talal. Those who travel to the camp invariably ask favors. As to what Chuck's was, the coming time will tell.

Update of February 12, 2007: From the mailbag:

Subject: Attn: Matthew Lee, Executive Director (or appropriate staff)

From: [Name withheld in this format]

To: Inner City Press

Hello and thank you for the information you have posted on your CitiWatch web site. I have been getting these fabulous offers of $4,000 - $5,000 'fresh start' loans from these goons which baffled me because my credit score is pretty abysmal right now ($300 credit limit now on my Visa! Woo-hoo!) and I thought that anybody who wants to loan that much money to a struggling single mother and full-time student must be crazy. Out of curiosity however I googled them and that's how I found your site. Thank goodness I did not succumb to temptation before reading about their nasty behavior.

AND

Subject: Citi

From: [Name withheld in this format]

To: Inner City Press

Sent: Sat, 10 Feb 2007 1:45 PM

Thank you for all you do to expose Citi for what they are: Predators! I filed bankruptcy less than two years ago. I was foolish with credit, and my situation only got worse when interest rates went to loan shark numbers. I plodded along for years sending minimum payments or whatever I could, but could never get ahead. With such high interest, it wasn't long before I was getting over the limit fees, even when I wasn't buying anything!

I actually paid the original amount on all the CC cards I had plus a great deal of interest, but it was never enough. I was being held hostage by these companies. There may not be debtors prisons in the USA, but these companies have a prison without walls!

Citibank sold my debt which at that point was all interest and fees to a collection agency which scared me so bad I agreed to monthly payments. After many months sending them a total of $1700.00 I found out they were charging me interest on top of what Citi had already charged me. They had kept me in the dark and all those months I was believing I was reducing the Citibank amount. My debt was actually increasing! I was in such despair, it was shortly after that I filed bankruptcy. My only regret is not filing sooner. I was eligible since my business was failing.

It is not surprising that I get many offers for credit since filing bankruptcy. Capital One was sending me offers almost from the day I filed. I read an article by one of their vice presidents which said the newly bankrupt were itching to get their mitts on plastic and would pay high interest to get it. I think Capital One is the one who is itching to get their mitts on anyone's money, no matter what. Washington Mutual has also flooded my mailbox with offers along with Orchard, First Premier, Aspire, and many others.

Today I received an offer of credit from CitiFinancial. I haven't read your book yet, but I plan to. Thank you for reading my note.

No, thank you. Keep those cards and letters (well, emails) coming.

Update of February 5, 2007: If last week's media speculation, that Citigroup's in line to buy the damaged predatory Ameriquest, is true, it will again reveal rifts in the community and consumer advocacy movements. Citigroup has bought many friends, from the time of its Associates First Capital Corp. purchase during which now-CEO Chuck Prince flew around the country telling groups they could send their complaints to his "personal fax number" (which some just call a garbage can). Even now, Citi-shills are singing, "But wouldn't it be better, if Citi ran the show?" Well, no. Ameriquest is near death, due to predatory lending. Just as HSBC's (14) billions re-inflated Household to harm more and more consumers, so too would Citigroup's opportunism reinvigorate the Ameriquest network of sleaze. That said, in fairness to some of Citigroup's defenders, it may be that the company saw it made sense to help the few consumers that these advocates referred. But what percentage of Citi's victims have been helped? Very few.

From sleazy to cheesy -- last week Kraft announced that Ajay Banga was been put on its board of directors. But didn't Citigroup speak out against board overlaps and overextension? From subprime loans to mac-n-cheese: some synergy. And on the Egg front, last week Banga said-in-a-statement that "Egg is an excellent strategic fit with our business and we are excited to have the opportunity through this acquisition to broaden our international Consumer banking business, and make our products and services available to more people around the world. We also will be able to learn from Egg's successful direct banking platform to enhance our global offerings."

Update of January 29, 2007: So Citigroup cut Todd Thompson loose. He flew the Money Honey around, paid shareholders' fund so get himself on cable TV and otherwise abused his power. But so too do many of those remaining.

Meanwhile Willumstad and Magner have re-emerged, to run a fund, Brysam Global Partners, focused on "consumer opportunities in emerging markets." Predatory lending, anyone? And how will the mortgage lending capacity for ABN-Amro be used by Citigroup?

Update of January 22, 2007: From the NY Times' E.Dash: "Most of the operating businesses are expected to adopt the 'Citi' prefix, but each will use a different color arc to maintain a distinct look. Citi's corporate and investment bank will feature a black arc; its wealth management division will use a red arc, and its consumer businesses, a blue arc. Banamex, its Mexican retail bank, and Smith Barney are expected to retain the old names... The company hired Landor Associates, a brand-consulting firm owned by the WPP Group, and put Ajay Banga, a co-head of its consumer businesses, who helped build PepsiCo's Pizza Hut and KFC franchises in India, in charge of the review."

We'd say CitiFinancial needs its own color. And on Ajay Banga, it's not just chicken anymore...

Update of January 14, 2007: Charging 20% interest on consumer loans is not enough for Citigroup. That is the message from last week's announcement that CitiFinancial will close 80% of its business in Japan, now that the country is moving to limit the maximum interest rate from 29% down to 20%. This will involve Citi's "closing of approximately 270 branches and 100 automated loan machines" in Japan. It is also reported from Ireland that CitiFinancial, identified in an hour-long television expose as the highest-cost lender in that country, and still imposing single premium credit insurance on mortgage loans there, may cut operations in that country as well. Some Citi-defenders blame all this on winds of populism. First, the spread of consumer protection was and is entirely foreseeable. Second, CitiFinancial by not even taking the minimal steps of not being the highest cost lender, and not so blatantly engaging in predatory lending, plays into this dynamic. These markets are better off without CitiFinancial, they clearly have determined. Five point ethics plan, indeed...

Update of January 8, 2007: Chilean intrigue. Chile's antitrust office is reviewing a planned strategic association between Citigroup and Banco de Chile, the office, or FNE, said Jan. 4. As late as last week, Chile's banking superintendent said he hadn't received fresh information on the deal, which the companies have said involves their assets in Chile. The local Luksic family's investment holding that controls Banco de Chile, has confirmed the negotiations. Banco de Chile is Chile's No. 2 bank, with a 17.8% share of the lending market. Citibank's local unit has a 2% market share, but owns 40% of pension fund administrator Habitat...

Update of January 1, 2007: In Ireland, even the lending industry is calling for a face-savings clean-up, noting that in 2005 only two licensed moneylenders were inspected by regulators. The scrutiny follows a recent 'Prime Time Investigates' program on RTE which showed how moneylenders charge up to 188 percent in interest. And if, like CitiFinancial, they are headquarters elsewhere, they escape regulation - for now...

In the U.S., Citi's revolving door keeps spinning. Mary Louise Preis, the Maryland financial regulator whom CitiFinancial hired directly from that job (in which she regulated CitiFinancial) now brags she's been named a director of Business Volunteers Unlimited Maryland. Nice business if you can get it...

Update of December 25, 2006: From a generally pro-Citigroup analysis last week, this: "What has been ailing Citigroup, Bove says, is the legacy of former CEO Sandy Weill and 'a board that I would not want to flatter by describing as third-rate.'"

Update of December 18, 2006: In further export of predatory lending, Citigroup announced on Dec. 13 a proposal to acquire Grupo Cuscatlan, with operations in El Salvador, Guatemala, Costa Rica, Honduras and Panama, for $1.51 billion. Citigroup bragged that "this transaction will further expand Citigroup's corporate and retail operations in the region and complement its pending acquisition of Grupo Financiero Uno, the largest credit card issuer in Central America." So now there'll be CitiFinancial predatory lending all along the Pan-American highway...

Update of December 11, 2006: on December 8, shares in Citigroup rose 2.3 percent on speculation that Chuck Prince might be replaced as well as talk that Citigroup might be broken up...

Update of December 4, 2006: A scandal is growing in Ireland, leading to the introduction of legislation to close off a loophole in Irish law that allows subprime financial service companies to operate without being regulated by the Irish the Consumer Protection Code. Unregulated firms can avoid supervision for solvency purposes and are not subject to 'conduct of business' checks by the regulator. Among the companies named as not regulated is Citigroup's CitiFinancial, which makes "personal loans at rates as high as 26 percent, according to a recent survey from the Financial Regulator."

Here's a New York story that has it all, at least from our point of view. Last week police found that "a Citigroup executive turned his fancy 38th-floor penthouse apartment overlooking the United Nations into a crystal meth lab... [Named] was Michael Knibb, a vice president for information technology for Citigroup. He was tracked ordering 100 grams of meth's component chemical, court papers allege. When the feds checked his penthouse on E. 39th St., they discovered beakers, solvents and heating elements in his living room and bedroom." And no sale scripts for predatory loans?

Update of November 27, 2006: In the hoopla about Federal Reserve chairman Bernanke agreeing to ride shotgun with Hank Paulson on his trip to pressure Beijing, something missed was the Federal Reserve's duty to scrutinize the China moves of U.S.-based holding companies like Citigroup. Citi buying into Guangdong will have no comment period. The Fed will issue no order describing what it considered. Citi may give notice along after the fact. Will Ben Bernanke ask? We'll see.

Update of November 20, 2006: So far in the 4th quarter of 2006, Citigroup has announced deals in Turkey, Central America and now China. As DJNS notes, Citigroup "has been pouring money into building its international consumer business, with $530 million slated for this year, compared with $150 million for the U.S. franchise." That is what we mean, about Citi's conscious export of its predatory lending. An example is in India, where CitiFinancial is raising money to expand through non-convertible debentures and short-term debt, raising a total of Rs 5,876 crore. According to a report by rating agency Cresil, "CitiFinancial is engaged in retail financing, primarily to finance the sub-prime segment of retail borrowers in personal and consumer durable loans and home mortgage segments"....

Friday's American Banker reports based on a Citigroup PR release that "Steve Freiberg and Ajay Banga, the co-chairmen and co-CEOs of Citi's global consumer group, are expected to participate" in a volunteer day. "Though Mr. Prince's whereabouts this week are widely known, the spokesman would not say where the other executives would be Saturday, because of security concerns." How self-important...

Update of November 13, 2006: This week consider two recent Citigroup press releases, one touting its growth in mortgages by mixing in subprime, the other pressuring Congress to allow it to do more business in Russia. On Nov. 6 Citigroup bragged that "in the third quarter of 2006, Citi originated $49 billion in mortgage loans, in the face of a continued industry decline. Year-to-date, Citi's mortgage originations exceed $100 billion. Last year, Citigroup combined its mortgage businesses to better serve its clients across the full spectrum of products. 'We believe that our mortgage products serve as a key building block to deepen relationships with our customers,' said Steve Freiberg, CEO of Citigroup's Global Consumer Group, North America."

Yeah -- once a person is drawn in though a CitiFinancial loan, Citi can keep the profits flowing through a thousand cuts and flips....

On Nov 10 Citigroup "welcome[d] today's announcement that the United States and Russia have agreed in principle to a bilateral market access agreement. Citigroup has had a presence in Russia since 1993, when it became one of the first banks with foreign capital to enter the local market. In 2002 Citigroup expanded its business from Corporate and Investment Banking to also include Consumer Banking [read, CitiFinancial.] 'We applaud the efforts and perseverance of President Bush, President Putin, and the U.S. and Russian negotiators,' said Nicholas E. Calio,
Senior Vice President, Global Government Affairs of Citigroup. 'Congress must grant Russia Permanent Normal Trade Relations (PNTR) status before the two countries can put their WTO agreement into effect. Granting PNTR to Russia will allow Citigroup and other U.S. companies to enjoy the full benefits of Russia's new market openings. We look forward to working toward passage of PNTR,' Calio said."

Given the ease of money laundering, we're *sure* Citigroup looks forward to it...

Update of November 6, 2006: Citigroup, which was blocked for more than a year from making any big U.S. acquisitions, now seeks to buy the largest credit card issuer in Central America, Grupo Financiero Uno, which has 1.1 card customers and over 100 branches throughout Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. The proposal will require at least some regulatory review in each of these countries. In the United States, while Citigroup will file a "notice," it appears there will be no public notice or comment period. In announcing the deal, Citigroup bragged of its " more than 1,600 retail bank branches and 500 consumer finance branches in Mexico and Latin America."

The consumer finance offices are CitiFinancial, which in 2004 settled predatory lending charges with the U.S. Federal Reserve Board.

It was also reported last week that Citigroup has won the right to buy a stake in China's Guangdong Development Bank after a competition with French bank Societe Generale and China's second largest insurer Ping An Group. Citigroup and GDB are expected to sign an agreement to finalize the acquisition, which has been approved by the China Banking Regulatory Commission. On December 28, Citigroup submitted an offer of 24.1 billion yuan (US$3.01 US), while Societe Generale bid 23.5 billion yuan and and Ping An 22.6 billion yuan for an 85-percent stake in GDB. But they had to revise their bids after banking rules issued in May imposed the foreign ownership restrictions. Citigroup, "together with its wholly-owned subsidiary Associates First Capital," would secure a share of no more than 25 percent in GDB.

Who knew that Citigroup continued with the brand and corporate identity of Associates First Capital, sued for predatory lending by the Federal Trade Commission...

Update of October 30, 2006: From last week's Philly News: "Weill said Citigroup had improved its lending practices after criticism by regulators and consumer advocates. And, after all, he asks, didn't Bangladesh's Grameen Bank win a Nobel Peace Prize for lending money to poor people -- albeit at lower rates of interest?" So now CitiFinancial drapes itself in the flag in micro-finance...

Citigroup has "opened 574 bank and consumer-finance branches so far this year, mostly in faster-growing places like India" -- and mostly subprime finance offices, not bank branches...

Update of October 23, 2006: In Japan, consumer finance companies are allowed to charge annual rates of up to 29.2 per cent. Now, the government plans to reduce that rate to 20 per cent. CitiFinancial has lobbied against the lowering of the country's interest rate cap, saying it would lead to a credit crunch and force weak borrowers to use loan sharks. Not unlike Citi's lobbying against anti-predatory lending laws in the U.S....

Meanwhile Chuck Prince last week said that "buying a big bank in western Europe is not on my agenda." He added that a big acquisition in the U.S. would "re-weight us very significantly to the US - which is not what I want to do." And so, Turkey -- on Tuesday, Citigroup agreed a $3.1 billion deal to buy 20 per cent of Akbank, Turkey's largest privately owned bank. Prince said it was "a great deal and a perfect example of what we want to do more of." We'll see.

Update of October 16, 2006: From the New York Banking Department's Weekly Bulletin:

"September 27, 2006 (LL-LFS)
CITIFINANCIAL, INC.
300 St. Paul Place, Baltimore, MD 21202

Notification requesting authorization to solicit credit card application on behalf of a bank from licensed location, received."

So now, beyond the move to use the predatory lending outlets of CitiFinancial to collect deposits (without, it seems, being covered by the Community Reinvestment Act, a matter on which Citigroup has provided closed-door briefings to the Office of the Comptroller of the Currency without sufficient public disclosure), CitFinancial would be "soliciting credit card application" too -- at a low interest rate, we're sure... From Business Week of Oct. 16: from Citigroup, "talented people who are frustrated by the pace of growth are heading for the exits. A number of high-level executives, from advertising to investment banking, have left for such companies as Macy's, Barclays, and JPMorgan, taking underlings with them."

Update of October 9, 2006: Shameless Citi-spin of the week, from Brownsville, Texas: "CitiFinancial announced it will host an identity theft prevention seminar from 6 to 7 p.m. Oct. 19. The seminar is open to the general public and will be at CitiFinancial's 2921 Boca Chica Blvd. location. The seminar is part of the bank's financial education program. 'We'll give them (attendees) examples of how ID theft occurs and what to do if your ID has been stolen, like contacting the fraud departments of the three major credit bureaus,' said Joseph Babineaux, CitiFinancial's branch manager."

Given that CitiFinancial has released millions of customers private information, the seminar is more than a little ironic. Citigroup is now the fifth largest subprime mortgage servicer in the United States, ahead even of Wells Fargo, New Century and Ocwen (NMN 10/9). In other Citi subprime news, it was announced last week that "CitiFinancial Auto will be Chrysler's exclusive non-prime lender." Meaning, high-cost... And overseas in India, Citigroup is more focused on high-cost consumer finance (non-banking finance companies, NBFC) than on banking. Citigroup's NBFC has a branch network of over 400 compared to a bank network of 39.

Update of October 2, 2006: Florida is suing a "Tampa-area company called Global Information Group Inc., claiming it made thousands of calls impersonating customers of companies including Verizon Communications Inc., tricking them into providing private call records. Earlier this year the company's principals agreed to pay $250,000 to settle the case, and to cease any pretexting activities." Global Information's customers include two Citigroup units...

Update of September 25, 2006: From the (snail mail, hard copy) mail bag last week, a complaint from a Citigroup staffer who, among other things, sends out the Board of Directors Book, to directors who apparently couldn't care less:

"To Inner City Press, Investigative Reporter re Disability Harassment at Citigroup

If I had known this would be an unending ordeal here at Citibank, I would have contacted your office before now. This has been an ongoing disability since 9/11/01 and to which I have already filed 2 complaints with the EEOC... No one is responsible for not following policies and procedures as set forth in the Code of Conduct or Employee Handbook, which is garbage because no one can rely on those policies. Employees have to abide by Citibank law, but senior management protects themselves by whatever means necessary."

Included is a written complaint to Citigroup's "Ethics Hotline," a complaint against one John E. Gunther, and a vituperative response to the EEOC from the Global Consumer Group, which mentions without comment that the charging party sends out the Board of Directors Book. What do the Directors think? Or about this --

Citigroup was tied for first place in the highest number of fines for violations from the U.S. Office of Foreign Assets Control -- six, from 2003 through August 2006.

Update of September 18, 2006: This week we return to the intra-Citi mailbag:

Subj: Employment Practice Abuse: The Travelers, Citigroup Connection
Date: 9/12/2006 10:33:43 PM Eastern Standard Time
From: [Name withheld]

To: CitiWatch [at] innercitypress.org
I came across your excellent publication while searching the web. Want to include a story relating to my own experience as an Asset Manager in Commercial Real Estate. After nearly two years appraising commercial properties, I was terminated while recuperating and on paid medical leave resulting from an injury I sustained while inspecting one of their income properties. I missed six weeks of work, and asked to be accommodated through the flex-work initiative propounded by the corporate offices. The HR department told me that my request had been denied due to some late reviews and that I would have to return to the office to complete a conference call. When I came in I was called into a manager's office with my immediate supervisor, and his manager and told that my request was denied, there would be no further discussion and if I wanted to continue working there I had better sign the forms being presented to me. Although I was, and am still under a doctor's care, the forms basically stated that I felt ready to return to work and that a new work-plan was being devised to "accommodate" me. No copies were provided. I was also informed that my previous work load would increase by 100%, that nobody has completed any work of mine during my six week absence and the appraisals had been traded for others in different territories that I was unfamiliar with. Additionally, many of the projects were unusual types such as self-storage, mixed use, and industrial properties that require far more research than a typical apartment building.
Although I made a grand attempt at this Herculean task, and worked late into the evening, and over the memorial day weekend, I was still short of the goal (and working on painkillers, and a heavy dose of Ibuprofen)..Despite hiring a part-time data entry person using my personal funds, the project simply could not be finished in the allotted time. Five weeks after I returned, I was terminated and escorted from the building by 4 vice presidents and the head of building security. I told then that this seemed unnecessary, and was certainly humiliating since it would appear that I was some terrorist being escorted out of the Citigroup tower.
I would not have thought much more of the situation except for the fact the other employees told me of similar occurrences with "mature" workers over the age of fifty. Just one month before me a 20 year veteran returned from hip-replacement surgery and was terminated exactly 4 weeks later.
Interestingly, while I was on leave I applied for a home equity loan, since my disability payments were "administratively" delayed by Met Life, their short term disability carrier. According to Citibank, they were unable to verify my employment and my loan application was denied...but not until the refinance of my current mortgage had already been approved! It seems they were willing to take on a $250,000 loan at 8%, but had no interest in the variable rate, lesser borrowing relating to the equity line. This leads me to think that the management had already determined that my employment would not continue after my medical leave ended. In addition, they did not provide the required Worker's Comp forms, did not respond to verification requests from the disability insurance provider (Met Life) and Travelers (a former fully owned subsidiary) denied my workers comp claim based on the fact that the forms were not filed until after the expiration of the short term disability claim. They also had a myriad of other defenses based on the fact that the medical reports were not received (although the HNO has proof that they were sent on two different occasions)
In summary, for many years Citigroup was providing what looked like a generous employee benefits program, when in fact the employees disability coverage (1/2 paid by the employee) was being provided by their owned subsidiary, and the long term care (Travelers) an optional coverage was entirely paid by the employees. With over 300,000 employees...that's not chump change! Why are the financial back office worker's not organized as under a labor union? Thank you for your in depth reporting.

For or with more information, contact us.

Update of September 11, 2006: To be celebrated for sleaze. Robert Rubin, who has been directly asked about Citigroup's predatory lending and said it is not in or under his "aegis," now sets up a public policy institute which the NYT (Sept. 8) says will be "addressing issues like the costs to the economy of excessive litigation and regulation." Yes, without excessive regulation CitiFinancial could get even more vicious than even the Federal Reserve found it to be. The Times reports that "Mr. Rubin has kept himself at a distant remove at Citigroup" -- that is, still perceived as progressive even as the company that pays him is engaged in one scandal after another, including scandals like CitiFinancial which directly harm the poor. ''This is not a political undertaking,'' Mr. Rubin claims. If you say so... For or with more information, contact us.

Update of September 4, 2006: From The Asian Banker Journal of August 31: "Chuck Prince reportedly pooh-poohed the significance of the U.S. Federal Reserve Bank's unofficial ban on large acquisitions. But 18 months of M&A inactivity has clearly cost the bank in several ways, aside from reputational losses resulting from regulatory mishaps. Some time the world's largest financial services institution by market capitalization, it was for some time also the world's largest by assets, but no longer."

Citigroup is staking its future on CitiFinancial, its subprime unit which has twice settled charges of predatory lending. In the Philippines, CitiFinancial has branches in Binondo, Kalookan, Cubao, Las Pinas, Marikina, Pasay Road, Taft, Imus, Calamba, Cebu and San Fernando in Pampanga. There are plans to expand the subprime CitiFinancial, in the next six months into Ortigas in Pasig City, West Avenue in Quezon City, and in Sucat, Paranaque. CitiFinancial says it will open its first branch in Mindanao, Davao, in 2006...

Update of August 28, 2006: In Poland, according to the Gazeta Wyborcza, the "aim of Citibank Handlowy is to extend the number of its CitiFinancial branches to 225." Less specific was Citi's August 21 press release, that "Citigroup announced today that it has obtained the necessary regulatory approvals related to its acquisition of the U.S. Capital Markets business of TD Waterhouse and that the transaction is complete. Terms of this transaction were not publicly disclosed." Ah, transparency...

From the FT, about Citi's Doctor Evil trade: "In a leaked e-mail, Tom Maheras, Citigroup's head of global capital markets, admitted that 'we did not meet our standards in this instance and . . . we failed to fully consider (the transaction's) impact on our clients, other market participants and our regulators.' Chuck Prince called the trade 'knuckleheaded.' Yet in due course the traders, briefly suspended, returned to work. There was no news of anyone being fired." What was that again, about the five point ethics plan?

Even the Wall Street Journal reported that Chuck Prince more than doubled his $1M salary in 2005 with $1.1M in dividend payments. Some payments involved restricted stock, for which Mr. Prince receives quarterly dividends when they are awarded. That means he will receive $1.4M this year on invested restricted and deferred stock he held through February of this year, and another $9.7M in restricted stock awards of this 2005 performance. The Journal's abstract says this " stirs concern, investors concerned with awards in comparison with competitors' performances." Yep...

See this week's Inner City Press CRA Report for context on Citigroup's recent announcement that it will merge its subprime CitiFinancial into its mostly-prime CitiMortgage, thereby evading the Federal Reserve's "optional" steering analysis....

Update of August 21, 2006: Flogging that predatory lending. "Advertising Age estimated earlier that Citigroup had cut as much as $120 million from broadcast and print advertising. A company spokesman said Citigroup had re-evaluated its ad needs and decided Tuesday to step up spending for the second half of the year along with the rollout of new products. Citigroup added about 1,000 Citibank and CitiFinancial branches worldwide in 2006." And now, to try to lure victims into them...

Update of August 14, 2006: As in Poland as in the U.S., Citigroup's predatory lending. From the Polish News Bulletin of August 11, Citigroup's " Bank Handlowy (BH) wants to develop its daughter company CitiFinancial, responsible for retail clients. This means higher margins and higher profits. During the first half of the year, BH earned ZL343m, which is 8 percent more than a year earlier. However, more than a quarter of this result is an effect of a one-off transaction. BH Chairman Slawomir Sikora predicts that the results during the last six months of the year will not be quite as good. However, returning to the retail banking sector should be visible in the results. The market did not react with enthusiasm. BH quotes fell by more than 2 percent to ZL67.3. BH has high hopes in the development of the retail market. Credit cards are supposed to have a substantial effect. So far, this year the bank has issued 613,000 credit cards, 12 percent more than a year earlier. Sikora says that in three years, BH wants 15-18 percent of operational revenue to come from CitiFinancial."

Update of August 7, 2006: Citigroup exports predatory lending, and brags about it. Last week in Hong Kong it issued a press release: "CitiFinancial has opened two branches at Aberdeen and Sheung Shui which offer convenient, speedy and tailor-made products and services to customers in two key hubs in Southern and Northern Hong Kong. This development underscores CitiFinancial's commitment to expand its reach in the territory. The opening of these two new branches together with two others previously opened at Wanchai and Sham Shui Po are important milestones in CitiFinancial's strategic expansion plan to have a total of 20 branches in Hong Kong by the end of 2006." Watch out...

Update of July 31, 2006: Well, well. Last week the Wall Street Journal covered Citibank trying to collect deposits through CitiFinancial, but mentioned neither the Community Reinvestment Act (which requires reinvestment in communities in which deposits are taken) much less CitiFinancial's two predatory lending settlements. Or check out the below sample email chain, cc-ed to Inner City Press:

Subject: Tired of being ignored by CitiFinancial

From: [Name withheld in this format]

To: LangJ@CitiFinancial.com; CitiWatch [at] innercitypress.org

Sent: Sat, 29 Jul 2006 10:33 AM

Ms. Lang, I am writing in response to your letter dated 6/29/06. It states you are in receipt of my e-mail and will respond no later than 7/10/06. I assumed since this was put in writing and it was from the Office of the General Counsel, I had finally reached the correct party at CitiFinancial to respond to my request. Unfortunately, this is not the case since it is now almost three weeks after I was supposed to receive a reply and I have heard nothing. Attached are all of my correspondence regarding this matter. Please note this communication began in MAY. It is now almost three months later and my

frustration level is at its maximum. Please refer to the last communication to Mr. Schrom. Dated 6/29, I requested the automatic deduction be stopped effective immediately. Since the July payment was deducted anyway, I decided to give you the benefit of the doubt and assumed my request was made too close to the deduction date. There will be no "benefit of the doubt" if the August payment is deducted.

-----Original Message-----

From:

Sent: Tuesday, June 20, 2006 7:39 PM

To: SchromR@CitiFinancial.com

Subject: FW: CitiFinancial Contact Us Form

Mr. Schrom,Please let me list several facts for you to ponder: My first email was on 5/5, where I requested the response be via e-mail or regular mail but also included my cell phone number. The response was that my e-mail was FORWARDED to Sharon Ocasio on 5/8 and included her phone number. After receiving NO response, I resent the e-mail on 5/27 and reiterated that I wanted all correspondence in writing. On 5/30 I was advised the e-mail was forwarded to you. Lo and behold, the notification I received about the change in payment was dated 6/1. On 6/12, I resent the e-mail and copied you advising the effective date was incorrect and the new payment amount was not as I calculated it. You asked Toni to "get" the information I requested so we could resolve this issue. Her response was a phone number for ME to call to fix CitiFinancial's error! To add insult to injury, I received a letter from Sharon Ocasio dated 6/14 asking me to call her as the number she has is disconnected and she has no way to communicate via e-mail. How can an e-mail be forwarded to someone who has no way to communicate via e-mail?

From: Lawrence, Toni [mailto:LawrenceT@CitiFinancial.com]

Sent: Tuesday, June 13, 2006 12:59 PM

Subject: FW: CitiFinancial Contact Us Form

Thank you. You need to contact the MOST Department @ 1-800-662-3787.

-----Original Message-----

From: Schrom, Ron

Sent: Tuesday, June 13, 2006 10:30 AM

To: Lawrence, Toni

Subject: FW: CitiFinancial Contact Us Form

toni, if what the customer states is true we need to adjust her rate for 2 months effective 5/1/06. also, she is requesting an explanation as to new payment calculation. can you help get the information she is requesting so we can resolve this issue? thanks for your help. ron schrom.

-----Original Message-----

From: Sent: Monday, June 12, 2006 7:30 PM

To: Lawrence, Toni

Subject: RE: CitiFinancial Contact Us Form

Ms. Lawrence, I wanted to let you know that I received a "Notice of Change in Payment Amount and Interest Rate" form that was dated 6/1/06. However, there is an error in the effective date. My contract states after 24 consecutive payments, the rate would lower. Our first payment was 5/1/04, which means the 24th payment would have been 4/1/06. The lower interest rate should have been effective with the 5/1/06 payment, yet the form indicates it will not be effective until the 7/1/06 payment. It clearly states the current rate is in effect for 26 months and it should be 24 months. Also, I cannot seem to verify the new payment amount and would like an explanation as to how it was calculated.

Just give us your deposits, Citibank is saying...

Update of July 24, 2006: Endless sleaze: last week, the U.S. Department of Housing and Urban Development fined CitiMortgage $650,000 for violating RESPA in over-charging for captive title insurance. Citigroup as per usually claimed it had done nothing wrong... From Citigroup's earnings statement last week: " International consumer revenues and net income grew 12% and 10%, respectively." During the quarterin Japan "85 new automated loan machines (ALMs) were added... Outside of Japan,.. 111 new branches were opened." Yes, the export of CitiFinancial's predatory lending...

Update of July 17, 2006: As Citigroup prepares to release and spin its earnings on July 17, it's worth noting that Citi is still growing in the high cost lending for which it has settled charges of predatory lending. Citigroup is now the fifth largest servicer of subprime mortgages, with $60 billion dollars worth, an increase of 4.49 percent from a year before...

Update of July 10, 2006: The New York Banking Department on June 14 quietly "authorized" CitiFinancial to "solicit deposits on behalf of a bank" -- Citibank. So, a confessed predatory lender now solicits deposits? The pink Financial Times last week dutifully reported on Citigroup's cost-savings, including "a recent order for photocopiers for all the CitiFinancial consumer finance offices in the U.S.. This was procured centrally, yielding a much better price, and the machines were financed by Citigroup's CitiCapital leasing arm, rather than using the vendor's leasing service." Readers of ICP's CitiWatch Report will note that CitiFi long eschewed the use of shredders, and more recently loses customer information on laptops. Neither was mentioned in the FT...

Update of July 3, 2006: Given the disparities in Citigroup's 2005 HMDA data, the Federal Reserve's wordless lifting of its 2004 cease-and-desist predatory lending order against CitiFinancial is shameful. So too was Citigroup's meeting with the Office of Management and Budget in June, to lobby about Basel II...

Update of June 26, 2006: They continue to spread: CitiFinancial Services recently leased 1600 square feet at 3150 Hotel Drive in Turlock, California... And in India, Citigroup disclosed in a filing with the Securities and Exchange Commission last week that it acquired a 6 percent stake in Videsh Sanchar Nigam Ltd., a Mumbai-based telecom service provider...

Update of June 19, 2006: In North Carolina, the Tillman case about CitiFinancial's mandatory arbitration clauses has been decided on intermediate appeal. It will now be appealed to the state's highest court. The underlying facts: out of 68,000 loans, CitiFinancial filed more than 2,000 collection actions and 1,700 foreclosures against North Carolina borrowers. No arbitration proceedings were filed by borrowers during the same time period -- because the mandatory arbitration process was so one-sided. Just the way Citigroup likes it, including with its employees, even at its investment banking and brokerage divisions...

Update of June 12, 2006: As Citigroup grows and exports its practices, this is the type inquiry Inner City Press / Fair Finance Watch receives:

Subject: Complaint against Citibank

From: [India]

To: CitiWatch [at] innercitypress.org

Sent: Fri, 9 Jun 2006 23:19:07 -0700 (PDT)

I have a complaint against Citibank of Bangalore, India. The staff of both the local and Chennai office have dismissed my complaint giving lame excuses. I would like lay bare the fact to Citibank Chief Charles Prince himself. I don't want to deal with the Chennai office. They don't understand the damage they have caused me.

Ah, Chuck....

Update of June 5, 2006: A recent Washington conference included, purportedly as a story with a happy ending, the tale of Paula Harrison of Raleigh, N.C., who was dealing with a high-cost 11.5% CitiFinancial loan and fighting foreclosure. While subsequently through mediation the rate was reduced, why was it so high in the first place? The June Mortgage Servicing News story has meanings beyond those it was presented for...Meanwhile, Citi's CEO has said that the company will add 40 branches to the 27 it has already opened in Russia.

Update of May 29, 2006: (Non) compliance watch -- Citigroup's brokerage unit has agreed to pay $98 million to settle claims on behalf of thousands of current and former brokers that they are owed overtime pay. Way to treat even brokerage employees... Much was made last week of Citibank's plan to open four branches in Boston. Thrown in as an aside were CitiFinancial's 22 high-cost lending offices in Massachusetts. It's subprime that drives Citigroup, at home and increasingly abroad...

Update of May 22, 2006: A deafening no-comment -- following the Wall Street Journal's May 11 article on the continuing investigation into the billions looted from Nigeria by ex-dictator Sani Abacha, which named as a conduit for Abacha's Transnational Bank's nostro accounts Citigroup and only one other institution (Deutsche Bank), nothing said by Citigroup...

Update of May 15, 2006: In Brazil, CitiFinancial is on record as planning to increase its number of subprime lending offices from 74 to 144. Meanwhile, Citi's proxy statement discloses that Robert Rubin, who could barely be bothered to stand up and wave at the annual general meeting, spent shareholders' $330,392 on personal travel in 2005. That's beyond what's spent spreading predatory lending around the globe -- about that, there's nothing personal, just business. Speaking of which, a headline in the International Herald Tribune of May 11, "Citigroup pulls back on Guangdong bank bid - Ownership law can't be circumvented" makes an interesting contrast to the United States in 1998. Then, Citigroup not only circumvented but broke the U.S. ownership law, the Glass Steagall Act prohibiting the mixing of banking and securities / insurance underwriting. Can it be that China has more "rule of law" than the U.S.? Or just that Citigroup doesn't have enough juice in China to allow it to circumvent the law?

Update of May 8, 2006: Citi's stealth subprime sleaze -- Citigroup will no longer break out the subprime production volume of its CitiFinancial mortgage business, a spokesman for the financial services giant confirmed to NMN, May 1. In reporting to the public, all of Citigroup's residential production will be disclosed as an item under real estate lending. The change became effective in the first quarter. "It's all been consolidated into one reporting line," said the spokesman, adding that "CitiFinancial has opened 200 new branches in the U.S. this year. Overall, CitiFinancial operates 1,000 retail branches in the U.S. and 1,200 overseas." So -- CitiFinancial now has more offices outside the U.S. than within (Mexico is hardly "overseas"). And was the spokesman who NMN quoted the ex-journalist Rob Julavitz?

Update of May 1, 2006: In a public forum in Brussels last week, marking the formation by NCRC and others of the ICRC, Citigroup's intrepid Jeff Jaffe spoke of Citigroup's endeavor to re-enter the mortgage market in Europe, due to changes in the Basel capital accords, and singled out Ireland as the type of economy, with limited regulation of financial services, which others in Europe might want to emulate. Elsewhere in the forum, advocates from Germany spoke of litigation about Citigroup for high-cost loans and payment protection insurance. Elsewhere in Brussels, a Citibank branch refused to exchange currency into Euros except for Citigroup customers; a Citi credit card was not enough to qualify, highly ironic in light of CEO Charles Prince's statements at Citi's annual shareholders' meeting, that the company has unified its customer bases instead of viewing each product or business line separately. Perhaps the message hasn't crossed the cold Atlantic?

Update of April 24, 2006: On Tuesday at Carnegie Hall Sandy Weill, presided over his last annual shareholders meeting at Citigroup, handing the reigns to his understudy Chuck Prince. As reported by AP, questions were raised about predatory lending, money laundering and tax evasion. But the ritual rolled on, replete with videos of tributes to Sandy, from a craven Dan Rather to a gushing Robert Rubin, who called Sandy the "most knowledgeable" business leader he'd ever "engaged with." $45 million a year will buy these kind of plugs. During the meeting, one of the speakers asked to see Robert Rubin, who barely deigned to stand up, wave his hand once and then sat back down. Chuck Prince intoned that Citigroup will open over a thousand branches or consumer finance outlets in the coming year -- "three a day," he bragged. When asked by Inner City Press if Citigroup's stated "reforms" in the U.S. apply to its global consumer finance business, Prince said yes, it's a global platform, they do apply. We'll see...

Inner City Press / Fair Finance Watch has conducted a comparative study of 2005 Home Mortgage Disclosure Act data, this time focused on New York City, and has found that Citigroup in 2005 confined its borrowers in The Bronx to higher-cost loans above this rate spread over 35 times more frequently than in Manhattan, worse than Citigroup's record in 2004. The Bronx is the lowest income and most predominantly African American and Latino county in New York State. In Brooklyn, Citigroup was almost as disparate as in The Bronx. In 2005, Citigroup confined its borrowers in Brooklyn to higher-cost loans above the rate spread 23 times more frequently than in Manhattan. For the entire New York City Metropolitan Statistical Area in 2005 Citigroup confined African Americans to higher-cost loans above this rate spread over seven times more frequently than whites, also worse than Citigroup's record in 2004. Chuch Prince called all this "too complex" to be addressed at the shareholders' meeting. Okay then...

Update of April 18, 2006: Inner City Press and Fair Finance Watch have reviewed the 2005 Home Mortgage Disclosure Act data of Citigroup and certain other lenders, including the new information concerning which loans are subject to a rate spread (3% higher than comparable Treasuries on a first lien, and 5% on a subordinated lien), and have found the following:

--Despite claiming to have improved its corporate practices, the racial disparities in Citigroup's high cost mortgage lending grew worse in 2005 than in 2004.

--In its headquarters Metropolitan Statistical Area of New York, Citigroup in 2005 confined African Americans to higher-cost loans over the rate spread over seven times more frequently than whites. This is worse than Citigroup's record in 2004.

Citigroup also disproportionately denied the applications of people of color in 2005. Nationwide, for conventional, first-lien home purchase loans, Citigroup denied the applications of African Americans 2.69 times more frequently than those of whites, and denied the applications of Latinos 2.02 times more frequently than whites.

In the state's lowest-income and most predominantly minority county, The Bronx, Citigroup confined 7.39% of its borrowers to higher cost loans over the rate spread -- 35.19 times more frequently than in more affluent and less minority Manhattan, where only 0.21% of Citigroup's borrowers were confined to rate spread loans. While of the five boroughs, The Bronx had the highest percentage of loans from Citigroup over the rate spread, Citigroup's percentage of higher cost loans in each of the four outer boroughs was higher than in more suburban, and less diverse, Westchester.

While comprehensive income comparisons will not be possible until the aggregate data is released in September, ICP and its academic support team have designed an innovative way to consider income correlations, by calculating upper and lower income tranches based on each lenders own customers. Nationwide at Citigroup for conventional first-lien loans, 37.73% of upper income African Americans were confined to higher cost loans over the rate spread, versus only 11.46% of upper income whites. Income does not explain the disparities at Citigroup.

Citigroup, was disparate in MSAs all over the country in 2005. In Los Angeles, Citigroup confined African Americans to higher cost rate spread loans 2.13 times more frequently than whites; its disparity for Latinos was 2.02. Citigroup's African American to white disparity was 2.27 in the Washington DC MSA, 2.72 in Chicago and 3.43 in Philadelphia, where Citigroup confined Latinos to higher cost rate spread loans 3.50 times more frequently than whites.

Elsewhere on the predatory lending front, Citigroup helped Dollar Financial to go public, and since continued to lend to and assist this pawn and payday lender. Despite claiming to have improved its corporate practices, the racial disparities in Citigroup's high cost mortgage lending grow worse in 2005 than in 2004.

Beyond the lending disparities reported here on April 10 (and in the American Banker newspaper of April 11), Citigroup continues to be chided for compliance, throughout its business lines, and not only in Australia. On April 12 in Ohio, it was disclosed that an arbitration panel of the National Association of Securities Dealers told Citigroup Inc.'s (C) Global Markets unit and its representative David Ridge to pay $900,000 to a couple, Suzanne and Joseph Carruthers, who lost retirement money in an investment program run by Citigroup's investment unit. It just goes on and on...

Update of April 10, 2006: The 2005 Home Mortgage Disclosure Act data, which Inner City Press / Fair Finance Watch received in late March from Citigroup, reveal that Citigroup in 2005, in its headquarters Metropolitan Statistical Area of New York City, confined African Americans to higher-cost loans above this rate spread over seven times more frequently than whites, worse than in 2004. The Federal Reserve has defined higher-cost loans as those loans with annual percentage rates above the rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens.

Redlining and continued disproportional denials to people of color are also evidenced by Citigroup's 2005 data. Nationwide for conventional, first-lien home purchase loans, Citigroup denied the applications of African Americans 2.69 times more frequently than those of whites, and denied the applications of Latinos 2.02 times more frequently than whites, both disparities worse even than in 2004.

Citigroup was disparate in Metropolitan Statistical Areas all over the country in 2005. In Los Angeles, Citigroup confined African Americans to higher cost rate spread loans 2.13 times more frequently than whites; its disparity for Latinos was 2.02. Citigroup's African American to white disparity was 2.27 in the Washington DC MSA, and 2.72 in Chicago. In Philadelphia, Citigroup confined African Americans to higher cost rate spread loans 3.43 times more frequently than whites; its disparity for Latinos was 2.50.

While comprehensive income comparisons will not be possible until the aggregate data is released in September, ICP / Fair Finance Watch has designed an innovative way to consider income correlations, by calculating upper and lower income tranches based on each lenders own customers. Nationwide at Citigroup for conventional first-lien loans, 37.73% of upper income African Americans were confined to higher cost loans over the rate spread, versus only 11.46% of upper income whites. Income does not explain the disparities at Citigroup.

Update of April 3, 2006: As Citigroup reportedly eyes Finansbank in Turkey, and "wins" praise for supposed corporate clean-up, it has been hit with conflict of interest charges in Australia, that its traders used inside information about the plans of Toll Holdings, its client, to make a bid for Patrick Corp. Regulators are seeking orders requiring Citigroup to stop trading in shares in companies involved in a bid on which it is advising. Citigroup responds that such conflicts are an everyday occurrence. At Citigroup, sure, sleaze remains less the exception and more, the rule...

Update of March 27, 2006: Citi-sleaze in the United Kingdom too -- last week, Citi hired Ivan Rogers, British Prime Minister Tony Blair's principal private secretary, to head its U.K. "public sector group." Then Gordon Brown named Citigroup as one of 12 companies to give advice on how to deal with globalization. Corruption and revolving-door, apparently... From employment notices in San Juan, via the National Mortgage News of March 20: "R&G Financial Corp. said that Jose A. Diaz has agreed to join its R&G Premier Bank of Puerto Rico subsidiary as its president. Mr. Diaz most recently served as the president and chief executive officer of CitiFinancial Services of PR Inc." Close readers will remember that this CitiFinancial unit in 2004 violated Citigroup's loud commitment to have stopped make super high cost HOEPA loans. And in 2005? We'll see.

Update of March 20, 2006: Last week, after repeatedly contacting Georgia's mission to the United Nations, Inner City Press / Fair Finance Watch finally obtained a copy of the National Bank of Georgia's letter to FATF, asking for action on what it calls the "illegitimate banking system in Abkhazia [which] provides broad possibilities for legalizing the income generated as a result of the above-noted crimes... smuggling (including arms), illegal circulation of drugs, kidnapping, etc.". The attachment to the letter lists, among the institutions which provide services to the unlicensed bank in Abkhazia, "Citibank (Moscow, Russian Federation)." Meanwhile, Citigroup has gotten itself appointed to advise on the privatization of Greece's fourth-largest lender, Emporiki Bank.

Update of March 13, 2006: In France the rumors are swirling, that Citigroup wants to take over Societe Generale, or maybe Barclay's Bank. The latter would require bank merger approval from the Federal Reserve, given Barclay's Juniper transaction. And the Fed has said (and not retracted) that Citigroup should stop merging, and reform its managerial mess-ups (which has yet to happen). So we'll see...

Meanwhile last week in Geneva the press quoted Damian Kozlowski of Citigroup Private Bank that Citi is targeting "onshore clients" -- he said that globally, 45% of Citigroup's assets are offshore. "The 45% portion is in decline and we are moving towards an onshore world," he said, without mentioning Citigroup's prior work for Omar Bongo, Salinas and others...

Update of March 6, 2006: Citi's annual report tersely discloses that the Securities and Exchange Commission has expanded an accounting probe into the bank's activities in Argentina, and subpoenaed materials for four additional years… From the mail bag:

Subject: CitiFinancial
From: [Name withheld]
To: CitiWatch [at] innercitypress.org
Sent: Sun, 26 Feb 2006 09:27:32 +0000 (GMT)
Have just found your site on CitiFinancial. It just the ammunition I need in my fight against this despicable company. They have destroyed our lives since June 2003 when we stepped into their office in Northampton here in England. Reading your page it seems that the methods they use there in America are also practiced here, delaying tactics, hiding documents so you don't see the contents (in our case a fraudulent credit agreement we didn't know existed for over a year), lying, slamming the phone down if you catch them out in a lie and financially ruining us with their selling methods. Keep up the good work. Hopefully one day I will have my retribution from this predator.

From India, Tata Consultancy Services Ltd last week clarified that it expects to announce a deal with Citigroup's "consumer unit" in four weeks. Further east, CitiFinancial last week strong-armed a deal with the Philippine Long Distance Telephone Company to be the lender to over five thousand Internet cafés… And the chairman and CEO were radically overpaid, including their taxes, for a year in which the company was essentially barred from acquisitions by the Federal Reserve…

Update of February 27, 2006: Fortune’s March 6 puff piece on Chuck Prince quotes him that "the only way [Citigroup] could do a transformational acquisition would be to buy Canada." But why buy when you can just suck them dry? CitiFinancial has taken global its predatory model. In Europe in 2004 it was only in four countries. It is now in a dozen: the UK, Spain, Ireland, Italy, Poland, Slovakia, Romania, Russia, Finland, Denmark, Norway and Sweden. In the first two, mortgages are offered. Everywhere else, it’s high-cost personal loans, which is CitiFinancial’s unreformed focus in the United States as well… The Fortune piece makes only a one-line mention that Citigroup was built “from the bit parts of a low-rent consumer-finance outfit called Commercial Credit” – that is, CitiFinancial. The article doesn’t mention the Federal Reserve’s freeze-order, or its 2004 fine of CitiFinancial for predatory lending…

Update of February 20, 2006: Lubricant: on Feb. 10 it was announced that Citigroup CEO Prince with also be a director of Johnson & Johnson (making of hand creams among other products). Particularly given the conflicts created (and fines results) from Sandy Weill’s place on AT&T’s board, of what possible benefit to Citigroup can Prince’s J&J foray be? (Ann Dibble Jordan is already on both companies’ boards). Business Week of Feb. 27 has Prince getting advice from Johnson & Johnson's CEO Weldon. What’s the view on predatory lending, from J&J’s NJ campus?

Taking its predatory lending in-house, and down to Georgia: Citigroup’s Primerica Financial Services Home Mortgages has converted more than 100 of its full-service offices in five Northeastern states to loan solicitation offices. Six of the new loan offices will be located in New York, including locations in Cheektowaga, Amherst, West Seneca, Clarence and Warsaw. The remaining offices are located in New Jersey, Connecticut, New Hampshire and Pennsylvania. Duluth, Ga.-based Primerica made the strategic change to reduce its operating costs and centralize the quality control of its application processing functions.. The reduced costs in state licensing fees will save Citi an estimated $26,750….

Meanwhile, on consumer / predatory accounts processing, from Mumbai on Feb. 15 Citi’s consumer division said it may opt to outsource information-technology work, probably to an Indian software company. Mitchell Habib, CIO of Citi’s consumer division in North America, said the new order would require at least 2,200 software engineers to work on it in the first year of the order being awarded. Habib was speaking at a joint briefing with Tata Consultancy Services Ltd.. He said he expected the order to be awarded to an Indian firm but declined to say if the order was likely to be awarded to TCS.

The Wall Street Journal’s Feb. 17 story about corporate self-promotion in emergencies quoted Sandy Weill bragging that Citigroup was one of the few to help in Pakistan because “"There aren't a heck of a lot of companies that have business in Pakistan.” The WSJ didn’t add that Citigroup’s business there has included money laundering for its ex-rulers and now having a Citigrouper, Shaukat Aziz, installed as prime minister, making law breaking even less of a problem there…

Updated February 13, 2006: Walk like an Egyptian: a February 8 press release from Brussels mentions that Bob Willumstad, who misrepresented CitiFinancial’s high cost loans, will now be on the board of directors of Commercial International Bank (Egypt) S.A.E….

Talk about tone-deaf: last week Columbia University named Citigroup’s Student Loan Corporation as its “preferred lender.” Let see: the Federal Reserve fines Citigroup for predatory lending, and tells it to stop expanding in light of money laundering and mismanagement – and then Columbia “prefers” it?

Update of February 6, 2006: In the run-up to Super Bowl XL in Detroit, Inner City Press / Fair Finance Watch has analyzed mortgage lending patterns in the Detroit Metropolitan Statistical Area in the most recent year for which data is available, 2004. At Citigroup’s mortgage company, CitiMortgage Inc., American Americans were over 8.6 times more likely to be confined to higher cost loans than whites…

Insider trading charges settled: the Securities and Exchange Commission last week charged former Citigroup Inc. senior vice chairman, Victor Menezes, with insider trading and agreed to settle the allegations for $2.68 million. Menezes was head of Citigroup's emerging-markets group in 2002, when the company suffered significant losses in its Argentina operations. According to the SEC complaint, Mr. Menezes sold almost $30 million of Citigroup stock ahead of an earnings shortfall related to those losses. Upon the settlement, Citigroup put out a press release lauding Menezes’ “integrity.” Typical of Citigroup…

Despite its environmental claims and friends, a press release last week (from the buyer) revealed the type of investments Citigroup holds: a stake in “90 oil fields in three basins in offshore Northwest Java and Southeast Sumatra,” just sold to London-based Salamander Energy…

Meanwhile, Citigroup had the full court press on the China Banking Regulatory Commission's Guangdong branch, in support of its bid to own 85% of Guangdong Development Bank…

Update of January 30, 2006: In Davos, the Public Eye rogue prize has been awarded to Citigroup, this time for tax evasions and money laundering. The quasi-indictment was founded on a detailed report by the Tax Justice Network's Lucy Komisar, available online in PDF format here. The report, and then IPS, recite along with reigning-dates that “In October 2004, Chilean authorities brought a suit for tax evasion against former dictator Augusto Pinochet (1973-1990). One of the banks that laundered Pinochet's money was Citibank…A report by the U.S. Senate Permanent Subcommittee on Investigations said that Citibank laundered at least $ 5 million for Pinochet, "and perhaps millions more." The list of questionable characters who engaged in similar shady deals with Citibank includes Raol Salinas, brother of former Mexican president Carlos Salinas (1988-1994); Asif Ali Zardari, husband of deposed Pakistani prime minister Benazir Bhutto (1988-1990); and the dictator of Gabon, Omar Bongo, who has held power since 1967. [ICP note: For those keeping track, Omar Bongo only last week swore himself in for another seven year term…]Citigroup clients also include the three grown children of Nigeria's late dictator, Gen. Sani Abacha (1993-1998); former Venezuelan president Jaime Lusinchi (1984-1989); two daughters of former Indonesian dictator Suharto (1967-1998); and former dictator of Paraguay, Gen. Alfredo Stroessner (1954-1989).”

A veritable roadmap to dictatorships. Citi could just as easily been given the award for global predatory lending. In Brazil, for example, Citigroup has been involved in the largest restructurings of the country's high-cost cards industry. On February 1, 2005 Citigroup agreed to divide equally with Itau the assets of Credicard, which added 3.8 million cards to Citibank's cards portfolio in Brazil, increasing it to 4.7 million and making Brazil Citigroup's second-largest cards market outside the United States after South Korea. Gustavo Marin, “country officer” for Brazil, bragged or threatened that Citigroup is also adding a number of high cost CitiFinancial branches to its network in Brazil. And so it goes…

Update of January 23, 2006: In announcing Citigroup’s earnings last week, CEO Chuck Prince acknowledged some problems at CitiFinancial. "It's obvious that our U.S. consumer franchises continue to face a challenging" environment, he said during a conference call with analysts. Dow Jones reported that “the network of CitiFinancial consumer-finance branches - the expansion of which is a cornerstone of the company's turnaround plan - struggled in the fourth quarter.” Where are things headed, when the largest bank says its subprime lending subsidiary, which has settled predatory lending charges, is the “cornerstone” of its turnaround plans?

Bob Willumstad, who falsely claimed at the April 2005 Citigroup shareholders meeting that Citigroup had not made super-high-cost HOEPA loans, has resurfaced – on the board of directors of the scandal-plagued American International Group. AIG’s press release states that “Mr. Willumstad, 60… joined CitiFinancial (then Commercial Credit, a predecessor company) in 1987.” Yep – he was in subprime consumer finance for a long time – and now still is. AIG also does subprime lending through its ex-American General units…. Another follow-up: Marge Magner, who used to train CitiFinancial branch managers, begins on the board of directors of Gannett on Feb. 1. Will the Gannett newspapers disclose this connection and/or conflict when they report on Citigroup or predatory lending? We’ll see.

Update of January 17, 2006: Inquiring minds want to know: why is Citigroup outsourcing the management of its profits from global predatory lending? Last week it was announced that management of the assets of CitiFinancial International and of Primerica has been awarded to Connecticut-based Conning Asset Management, owned by Swiss Re. An analyst from Piper Jaffray opined that "Citi is steadily getting rid of all ties to the insurance business. They have done away with most of their insurance business already. This is just cleaning up some of the loose ends." First, CitiFinancial International is not (mostly) insurance. Second and more generally, what does this say of the “ground-breaking” 1998 acquisition of Citicorp by Travelers?

Update of January 9, 2006: The lede from the Wall Street Journal of January 3: “Citigroup Inc.'s anticipated purchase of a majority stake in Guangdong Development Bank could signal the end of regulatory limits on foreign ownership of Chinese financial institutions.” Citi is “partnering” on the bid with the Carlyle Group. The changing of laws is reminiscent of the violation then dismantling through lobbying of the Glass Steagall Act. Even since, Citigroup is the bank with the highest lobbying budget, according to the Public Eye’s LobbyWatch database, spending $42,410,000 from 1998 through 2004 (and fully $7,200,000 in 2004)...

Update of January 3, 2006: While various news services reported Bear Stearns SEC filings in the week before New Years disclosing that its subprime subsidiary EMC has received an FTC subpoena described as HMDA-related, few followed up to describe the disparities in the 2004 HMDA data, and the companies with the worst disparities and whether they’ve received subpoenas. Citigroup was asked; CitiFinancial’s spokesman Rob Julavitz issued a “no comment.” We’ll see.

Update of December 26, 2005: Last week Rhode Island regulators fined Citigroup $1 million for selling unsuitable investments to elderly customers, engaged in unauthorized trading, and misappropriated funds. That is, predatory in investment advice as well, at home as well as abroad. From DJNW Seoul on December 19: “The South Korean unit of Citibank said Tuesday it will return a total of KRW1.3 billion to customers who contracted floating rate mortgages but had been charged a higher fixed interest rate.” Citi’s predatory lending in Korea, too… From Japan Weekly Monitor of December 19: “Citigroup Inc. will reduce its equity stake in Nikko Cordial Corp. to 4.9 percent from the current 11.3 percent.. Citigroup will reduce its stake so as to reallocate the capital to other operations, Citigroup Chief Executive Officer Charles Prince said in a joint statement released by the two companies. The deal will enable Nikko Cordial to expand its presence in private equity investment and other businesses, President and CEO Junichi Arimura said. With Citigroup's stake falling below 5 percent, Nikko Cordial will be freed from U.S. Federal Reserve Board regulations.”

And that, being freed from Federal Reserve oversight, is perhaps the goal?

Meanwhile, Citigroup is reportedly bidding to acquire 80% of China’s Guangdong Development Bank. Liu Mingkang, chairman of the China Banking Regulatory Commission, told reporters no decisions have yet been made.

Update of December 19, 2005: During Citigroup’s acquisition of the subprime lender Washington Mutual Finance Group, Inner City Press asked Citi’s Robert Rubin if he was aware that the unit was subject to a $70 million predatory lending verdict. He responded that subprime lending “is not really [in his] aegis.” Now, in an interview in Business Week of December 19, he states: “We did two [in-depth] reviews [of our businesses] at the end of last year...one in fixed income, the other in the consumer business. I was part of both of those. It was [CEO] Chuck [Prince] and me and a few others. Right now we're looking at a possible acquisition abroad. I have no idea whether we'll do it, but a group of us went over it. It involves complicated questions, so they asked me to think it through.” So: he was part of a review of “the consumer business,” and can no longer disclaim responsibility for CitiFinancial’s still-predatory practices. As to the alluded-to “acquisition abroad,” we’ll see…Meanwhile, as recounted by Dow Jones of Dec. 16, Prince “plans to add 150 to 200 new bank branches overseas next year, as well as 400 to 500 new consumer-finance branches. Prince said Russia and Turkey are among the countries that will get new bank branches, while Citi plans more consumer-finance offices in Mexico, Brazil and South Korea.” The export of predatory lending continues.

Update of December 12, 2005: Last week the transcript of a deposition of Citigroup’s CEO was released. ''If you are asking me if these public perceptions had never come up, would we still have made the change, I don't know the answer to that,'' he said. While he was responding about the “synergies” of Citigroup-ers like Grubman, demanding investment banking business in exchange for recommending the companies’ stock, he might as well have been referring to Citi’s predatory lending: every change has been in response to, and attempt to sidestep, a scandal. And yet the scandals persist… The quoted deposition was taken in August in a lawsuit by Florida investors who say they lost more than $6 million on Grubman’s recommendation of WorldCom stock before the long-distance company filed for bankruptcy-court protection in July 2002.

Update of December 5, 2005: Military personnel on active duty are being overcharged on high interest loans by banks including Citigroup, a new investigation of compliance with the Servicemembers’ Civil Relief Act (SCRA) by Inner City Press / Fair Finance Watch has uncovered. Through documents obtained under the Freedom of Information Act, ICP had documented widespread violations of the SCRA, defrauding and overcharging of those in active military service, and regulatory inertia in dealing with the abuses.

Citigroup described in consumers’ complaints as demanding original copies of initial deployment orders, of refusing to deal by telephone with servicemembers’ immediate relatives, and of reporting adversely to credit agencies.

The Servicemembers’ Civil Relief Act, at 50 USCS Appendix Section 527(1)(a) provides that “An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent per year during the period of military service.”

The purpose of the SCRA, formerly known as the Soldiers’ and Sailors’ Civil Relief Act, is to provide interest rate relief and other protections “to servicemembers of the United States to enable such persons to devote their entire energy to the defense needs of the Nation.” Section 502. Citigroup, however, routinely seek to deny the SCRA protections to servicemembers. For example, beyond deployment orders, Citigroup has demanded original enlistment papers, as reflected in this complaint to Citigroup’s AT&T Universal credit card unit in Jacksonville, Florida, now placed online at www.innercitypress.org/citiscra4.jpg

“We received your letter telling us that you could not process [REDACTED]’s request to reduce the Annual Percentage Rate (APR) under the Soldiers and Sailors Civil Relief Act of 1940. We understand that you need another document to show when exactly she enlisted in the Army. We, her husband and children, regretfully inform you that we do not have access to any of her documents that pertain to her military career. As she is already in Kuwait, there is no way that she can send these documents to you until her return home. She is not expected to return for six months to a year.”

Using prior military service as an excuse to maintain high interest rates despite the SCRA appears to the strategy as other Citibank units as well, as reflected by the complaint to Citibank’s regulator, the Office of the Comptroller of the Currency (OCC), now online at www.innercitypress.org/citiscra4.jpg

“I am writing in regards to a dispute with The Associates credit card company of Citicorp Credit Services, Inc. (USA). The dispute pertains to my eligibility to receive the interest credit from the Sailors’ and Soldiers’ Relief Act (SSCRA) (50 U.S. App. Sec. 526).

“I first contacted The Associates in May of 2002. At that time I was denied enrollment. I was told that because I originally entered the military in 1989, I was ineligible. However, my tour of duty was over in 1993. I opened my account with The Associates in 2000. At that time, I was a civilian and had no intentions of signing back up with the military. Yet, in March of 2002, I entered into the US Army on full-time, active military duty. As the law states, the SSCRA regulates the amount of interest I am to be charged for any credit accounts I opened before entry into military service.

“I have disputed this matter with The Associates to no avail. I have sent them copies of my original orders showing my current enlistment date, as well as a copy of the law. Still I was denied. I was then forced to go to my JAG office on base to seek legal counsel. From there I was directed to the Attorney General’s office in Irving, TX, the headquarters for the aforementioned party. The Attorney General’s office then put me in touch with the legal representatives of the [REDACTED] County, where I received contact information for the OCC Customer Assistance Group.

“The Associates have repeatedly denied my claims based on prior service. Yet, I have found nowhere in the law where it states this as a deciding factor. So I write to you now, to examine the law and enforce the necessary actions. I have enclosed all pertinent documents in regard to this matter. I have been enrolled in a debt consolidation company, and have made payments to The Associates monthly for the last year.”

The attachment, on Department of the Army stationary, reflects Citigroup’s Associates charging 12.99% interest. In April 2005, a mother wrote to the OCC, in a letter now online now online at www.innercitypress.org/citiscra12.jpg

“Enclosed is a copy of my son’s military orders calling him to active duty, a copy of the affidavit designating me as his authorized representative, and a copy of my letter to Citibank, Sioux Falls, SD, dated 8 December, 2004. Citibank has given me all kinds of excuses for not acting on this matter. First they wanted an affidavit specifically addressed to them. They desisted on their request once I explained to them that the military do not have the time and manpower to prepare affidavits in the manner Citibank wanted. Then they told me that my son’s active duty orders were not with the correspondence I had mailed them. Then they said I needed to prepare a document which they were going to mail to me; I have never received such document. Last time I called I was told that they were still investigating!”

Another mother complained:

…”His unit was deployed to the Middle East. In February 2003 his fiancé and I applied to Citibank to have his finance charges reduced under the Soldier’s and Sailor’s Relief Act of 1940. (Account # [REDACTED]). We have supplied Citibank with several letters of proof of my son’s service (copy of one enclosed) with no satisfaction. We recently received a letter requesting a “Proof of Service Letter” from Citibank. While the people at Citibank that I have spoken with are polite and helpful, nothing has been accomplished. Telephone calls to the customer service number are no help as the group that handles Soldier’s and Sailor’s Act requests are in Jacksonville, FL and can’t be reached by telephone, only by mail. I think the enclosed letter (which Citibank already has) from the Headquarters of II MEF should be sufficient proof of my son’s service and that Citibank’s foot dragging is nothing more than an attempt on their part to make the process so long and drawn out so that we will give up as they do not want to lose the 24.24% interest that is being paid on the account.”

Even when compliance is belatedly obtained from Citigroup, accounts are still turned over to collection agencies, and credit ratings impacted, as reflected in this complaint to the FDIC, placed online at www.innercitypress.org/citiscra5.jpg

“My husband enlisted in the United States Marine Corps during the recent war in Iraq. Upon the advice of his recruiter, I requested relief from our creditors in accordance with the Soldiers’ and Sailors’ Civil Relief Act of 1940. Citibank finally responded and complied with the Act. However, they ALSO have turned this account over to TWO COLLECTION AGENCIES (copy of letter enclosed).

“I am filing a complaint against Citibank because they are ruining our credit rating by ignoring my requests regarding relief and selling this account to collection agencies.”

The attached notice – even the name of the collection agency has been redacted by the Office of the Comptroller of the Currency – reflects a balance of $1,937.13. It begins: “This is to advise you that Citibank (South Dakota) Na (P) has transferred your delinquent account to our office for pre-legal collection.”

Yet another sample complaint:

“I am serving in the United States Navy on active duty. Currently, I am stationed at the National Naval Medical Center in Bethesda, Maryland. The reason why I am writing to you is because I had a credit card with Citibank, I was getting the reduced interest rate on credit card under the provision of the Soldiers and Sailors Civil Relief Act of 1940. Today that bank is telling me that I am denied that provision and I sent all documentation showing that I am a member of the United States Armed Forces. I have kept my account clean, paid my bills on time and they have not told me why I cannot get the reduced interest rate. I am writing to let you know what the Citibank is doing.”

ICP will be pursuing these issues further. For or with more information, contact us.

Update of November 28, 2005: Inner City Press / Fair Finance Watch is analyzing Gulf Coast mortgage lenders in the Katrina-zone, identifying those which in 2004 had the worst disparities between the percentage of African American and white borrowers who were charged higher costs, over the Federally-defined rate spread of 3% over comparable Treasury securities on a first lien loan, 5% on subordinate liens. Interim results including this finding, that in Mississippi, Citigroup’s CitiMortgage in 2004 was 5.4 times more likely to confine African Americans to higher cost rates spread loans than whites...

Update of November 21, 2005: Expanding its predatory lending presence, CitiFinancial is reportedly opening at least one new office every week in India. This according to Citi’s William Rhodes, bragging at the APEC conference last week in South Korea. Rhodes said of India, “’There are pretty significant restrictions with acquisitions, so until that changes it will be quite hard to expand inorganically. But we are looking to grow our organic business quite strongly.’ The group is already opening outlets of CitiFinancial, its non-banking arm, at a rate of one a week, taking advantage of regulations that do not consider the mortgage and personal loan provider a bank. Mr. Rhodes said Citibank's acquisition of South Korea's KorAm bank was proceeding well and would serve as a template for other purchases in the region.” Of course, as reported, Koram has already been charged with predatory lending....

CitiFinancial is also moving back office functions for its predatory lending in the United States to Fort Mill, South Carolina. “CitiFinancial's Auto Center in Charlotte will be among the first to move to the operations center. About 150 workers, primarily customer call center and collections representatives, will move by Monday. The remaining 250 auto employees will relocate by mid-January. About 350 customer service, personal loan and debt consolidation workers from CitiFinancial's Branch Network will move the first week of December.” Bad karma...

Update of November 14, 2005: A series on mortgage fraud in the Chicago Tribune last week details egregious CitiFinancial loans. CitiFi’s spokeman Rob Julavitz blames it all on Associates; even the Tribune notes that “the Federal Reserve Board fined Citigroup an additional $70 million--another record payout--for alleged subprime mortgage abuses from 2000 and 2001, after Citigroup took over Associates.” We’ll add that the Fed’s fine was not limited to actions stopping in 2001, and that Citigroup’s spin that it put the issues behind it by stopping making super high cost HOEPA loans was disproved by Citi’s 2004 mortgage data. Continuing with its lack of standards, Citigroup is underwriting $2.57 billion home equity deal by Ameriquest, even as Ameriquest is investigated for predatory lending in over thirty states. For more CitiFinancial analysis, click here (BankRate.com article).

Update of November 7, 2005: Citigroup bragged last week of its hiring of ex-World Banker James Wolfensohn, to add to a roster already including Robert Rubin, who has still done nothing to address CitiFinancial’s predatory lending (and took no public position on Citi’s super high cost HOEPA loans in 2004, leaving that task to the now-gone Bob Willumstad). As noted by the FT, “the announcement came just a day after the world's biggest financial services group said it had hired Shengman Zhang, Mr. Wolfensohn's former number two at the World Bank, to be chairman of its public sector group.” Here’s a thought: why doesn’t the World Bank have anti-revolving door policies, as even the U.S. bank regulators have had to adopt?

On Citigroup’s continued globalization of standardless subprime (predatory) lending, the Polish News Bulletin of October 31 reported that “CitiFinancial, a department offering cash loans to less wealthy clients, will help it strengthen its position. After two years of operating, CitiFinancial's assets are worth around ZL 560 million and the department is beginning to generate a return on investment. In the near future it will diversify its offer.” High cost consumer lending in Poland by CitiFinancial -- what will Wolfensohn have to say about that? We’ll see. Or about this?

“Nov 2, 2005 - SEOUL (Reuters) - A one-day strike by unionized workers at Citibank Korea shut one third of its branches on Wednesday, the company said, with the union threatening to escalate the action over pay and welfare benefits. The union represents about 2,700 employees from former KorAm bank, which Citigroup Inc. acquired for $2.7 billion last year, and accounts for nearly half of Citibank Korea's workforce... The union said in a statement its members would boycott selling investment and bancassurance products beginning Thursday.”

Update of October 31, 2005: At the United Nations on October 26, there was bragging about Citigroup’s micro-finance programs. But when the head of Citigroup’s microfinance group was asked about the relation between his unit and the larger subprime CitiFinancial was, he referred to “CitiFinancial and other micro-finance institutions” wanting effective regulation and transparency. His answer -- which a number of observers including from Citigroup peer banks and rating agencies notes was not at all responsive -- ignored that Citigroup has lobbied against regulation and transparency; it also implies that Citigroup is including its high-cost CitiFinancial unit in its definition of micro-finance. For shame...

Update of October 24, 2005: Reporting on last week’s earnings conference call, CNN / Money reported that the “Federal Reserve also blocked the company from making any more acquisitions until it gets its compliance issues in order.” The NY Times reported that “the Federal Reserve [is] barring Citigroup from making any major acquisition until it tightens internal controls and addresses regulatory problems.” Let’s hope that the Fed keeps its word, and sticks to its guns... Meanwhile, predatory lending will take you everywhere. Beyond Citi’s global export of CitiFinancial’s practices, the defense lawyers are on the move as well. Last week the Free Press newspaper in London, Ontario, reported that among the “city dignitaries” who got photo-op face-time with ex-President Clinton at an event sponsored by CIBC Wood Gundy was... “Michelle Hayward of CitiFinancial.” And she used to be in Baltimore...

From the mailbag:

Subject: CitiFInancial Automotive-repo for CPI

From: [name withheld]

Sent: Thursday, October 20, 2005 2:25 AM

To: CitiWatch [at] innercitypress.org

My daughter has just experienced a repossession of her car by Citibank. Lo and behold, she wasn’t really in default for her car payments, but because of Creditor placed insurance. She had a collision policy in place, but for some reason, Citi decided she didn’t and placed CPI, without notifying her. They admitted that they (oops!) made a mistake, but they still want the balance of the loan (which is now $2000.00 more than the original loan). We went today to retrieve the personal possessions (Citibank sent a letter stating that the repo company would hold the personal items for 30 days after Sept. 19, 2005) only to discover, “they’re gone”…”we donated them”. After badgering the repo man, he gave me a fictitious church charity’s name. I, of course, notified the mission board of that denomination that the repo company was taking their name in vain…. I guess the big question is, when, ooh when will the feds squash these predators??? Or will they??? It just goes on and on…it shifts shape from one type of loan to another and continues…What will it take? I’ve followed the stories on your site, got a few questions answered…like why we never got any response to a request for a statement of account showing how payments were applied… How could they if we requested it in July, and they lost their account records in June??!! At any rate, thanks for being a forum for sharing the info so that other victims of Citi realize that they’re not alone.

Update of October 17, 2005: We must of course note the U.S. District Court’s decisions in the cases by the OCC and the Clearing House banks -- including Citibank --against the NY Attorney General, to avoid providing the credit score information they say would justify the racial disparities in their lending. Why should the public believe a defense that they go to court to conceal? Whether or not an appeal is taken, and whether or not it’s successful, the public must demand that the OCC bring enforcement action(s) on Citi’s disparities, and must separately pursue them, far and wide and ceaseless...

Update of October 10, 2005: In Italy, MTS has barred Citigroup from bond trading on its Italy-based platforms for a month from Nov. 1 for breaching bond trading rules in August 2004, an unprecedented step for the electronic trading system. As recounted, on Aug. 2, 2004, Citigroup sold 12.9 billion euros ($15.54 billion) of cash bonds in one minute and bought back 3.8 billion euros of the paper within an hour on a day when the U.S market was closed for a public holiday. Much of the trade was completed over Italian-based bond trading platform MTS. Citigroup remains under investigation for this in Belgium and Portugal...

Our book review this week concerns money laundering. Nick Kochan is a British business journalist; his book The Washing Machine (Texere Thomson, 2005) walks through recent scandals from Bank of New York through Casablanca to Citigroup. Of this last, Kochan writes: “One Citibank private bank official in Africa stated that he does ‘not have problems with the large deposits held in New York by [Gabonese] President Bongo, providing information concerning them is kept completely confidential.’” That’s Citigroup. Now Bob Willumstad is salivating to get top job at Mellon -- which last week received a Wells notice from the SEC. Bob W would be right at home...

Update of October 3, 2005: CitiFinancial is the highest cost lender in Ireland, as well. The Irish Times of September 28 reports: “Consumers can save EUR 80-EUR 1,200 by shopping around for personal loans, the Irish Financial Services Regulatory Authority said yesterday. The financial regulator repeated its warnings about payment protection insurance, which it stressed was an optional and expensive type of insurance sold in conjunction with personal loans. The survey shows that the best value personal loans are available to members of EBS Building Society, who are charged an annual percentage rate of interest (APR) of 7.45 per cent. The total cost of credit for an EBS member on a loan of EUR 7,000 repaid over three years is EUR 805, compared to EUR 1,180 for someone who arranges a fixed-rate personal loan through a Bank of Ireland branch. The cost of credit at CitiFinancial... was a massive EUR 2,799.” That’s 2.4 times higher than at the Bank of Ireland, and 3.5 times higher than the building society. And this is how Citi builds up its profits, without standards, outside of the U.S....

Update of September 26, 2005: Inner City Press / Fair Finance Watch has reviewed Citigroup’s mortgage record in the New Orleans Metropolitan Statistical Area in 2004, including not only denial rates but also the new information concerning which loans are subject to a rate spread (3% higher than comparable Treasuries on a first lien, and 5% on a subordinated lien) --

Whites: 1461 applications, leading to 484 denials (33.13% denied) and 605 originations; 179 [or 29.59%] exceeded rate spread.

African Americans: 1492 applications, leading to 747 denials (50.07% denied, 1.51 times higher than whites) and 406 originations; 285 [or 70.2 percent] exceeded rate spread [2.37 times higher / more likely to be over rate spread than whites].

Latinos: 129 applications, leading to 59 denials (45.74% denied, 1.38 times higher than whites) and 35 originations; 22 [or 62.86 percent] exceeded rate spread [2.12 times higher / more likely to be over rate spread than whites].

Ugly... So’s this: Citi on Sept. 21 said U.S. Securities and Exchange Commission staff are considering administrative proceedings against Smith Barney Fund Management LLC and Salomon Brothers Asset Management Inc., both investment advisory companies that are a part of Citigroup Asset Management. Back in May, the SEC ordered Citigroup to pay $208.1 million to settle administrative proceedings for alleged violations of the Investment Advisors Act of 1940. The SEC found then that Smith Barney Fund Management LLC and Citigroup Global Markets Inc. failed to disclose to the boards of the closed-end funds details of a new transfer agent agreement. So how’s the Five Point ethics program going? Meanwhile, after declaring itself the greenest of banks, Citigroup last week appointed to its board of directors the CEO of Dow Chemical Co., Andrew Liveris...

Update of September 19, 2005: The Federal Reserve must have been on summer vacation -- it waited under September 13 to respond to ICP’s “letter dated July 5, 2005, to Chairman Greenspan... regarding the proposed transaction between Citigroup... and FDS Bank... This transaction does not require approval by the Board but does require approval by the OCC and FDIC. Your comments have been forwarded to those agencies for consideration.”

But wasn’t it the Federal Reserve, which said that Citigroup shouldn’t expand by acquisition until it cleans up its compliance problems? ICP’s comments to the OCC and FDIC are still pending... Meanwhile, Citi is expanding into Kuwait. The Central Bank of Kuwait's board "initially approved the licensing of the New York-based Citibank to open a branch in Kuwait," CBK Governor Sheikh Salem Abdulaziz al-Sabah announced last week. All we can say is “watch your bond market -- and your consumers.”

Remember Citigroup’s loud claims to have become environmental? Well, last week it was reported that Citigroup will arrange a $10 billion loan to OAO Gazprom to finance the state-owned gas producer's purchase of a controlling stake in OAO Sibneft. Citigroup spokeswoman Lindsey Deans in London declined to comment. Typical...

Update of September 12, 2005: This week we venture beyond Citi’s still-predatory lending, back to conflicts in stock research. Released last week was a Citigroup memo from global research head John Hoffman to investment banking chief Michael Carpenter complaining that bankers and executives were pressuring research analysts to issue positive ratings. Hoffman wrote that "research analysts have been told repeatedly that the primary goal of the firm is to get our equity underwriting market share ranking into the top three." Citigroup’s response? "The issues in the memo were addressed in the global research settlement.” But in an ongoing WorldCom-related case, Chuck Prince was deposed in late July, and Sandy Weill was slated for grilling on September 9th... Meanwhile BusinessWeek quoted Prince that Citigroup’s “top priorities are to invest more in retail banking in emerging markets like Poland, Turkey, and India, at least double Citi's credit-card volume worldwide, mostly in Southeast Asia and Latin America.” As reported, in South Korea in July, workers at Citigroup’s purchased KorAm complained to prosecutors about Richard Jackson, the consumer banking head of Citibank Korea, saying he helped the bank make unfair profits -- it’s called predatory lending...

Update of September 5, 2005: The Gulf Coast region is one of the most redlined by banks. Citigroup virtually withholds its normally-priced mortgages from the region. In 2004, over 70% of Citigroup's mortgages in Mississippi were over the Federal high-cost rate spread (3% over Treasury securities on a first lien, 5% on subordinate liens). Meanwhile, less than 10% of Citigroup's 2004 mortgage in Massachusetts were higher-cost. By race, over 75% of Citigroup's loans to African Americans in Louisiana were higher-cost, compared to under 40% of Citigroup's loans to whites. Click here for more of ICP’s Gulf Coast Watch.

From elsewhere, from the mailbag:

Subj: CitiFinancial Gross Exorbitant Interest Charges

Date: 8/29/2005 12:23:56 AM Eastern Standard Time

From: [ ]

To: CitiWatch [at] innercitypress.org

Greetings, I sent this letter to CitiFinancial after I discovered how the interest charges have added up. They just started adding daily interest to my account, increasing my principal.

CitiFinancial Mortgage

Attn: Customer Service,

In December of 1995 I began a mortgage account with Ford Consumer Finance and later The Associates First Capital. In September 2000 CitiFinancial took over my mortgage account. Upon reviewing my payment history I found two complimentary penalty charges applied to late payments on my record. I was double billed for late payments. There is an interest short penalty and also a interest related late charge per one late payment. That calculation is a gross overcharge not clearly represented in the mortgage agreement. The periodic interest rates and penalties were never disclosed, a violation of the Truth and Lending Act.

The approximate balance on the Interest short column is well over $40,000.00 for the years in which daily interest was calculated. This was then added to my principal balance along with loan restructure fees. The loan restructure was recommended by your company and then added to my loan principal.

And so it adds up...

Update of August 29, 2005: And now she too is leaving -- Marge Magner, we’re talking about, she who attended the hearing on Citigroup - Golden State but said nothing, she who trained CitiFinancial branch managers at the Beam-Me-Up meetings in Baltimore. Perhaps the previous week’s announcement that she’d join a board at Brooklyn College should have been a clue... Meanwhile, an NASD arbitration panel has awarded two petitioners an aggregate $269,537 from Citigroup Global Markets, for breach of fiduciary duty and contract, material misrepresentation, and failure to supervise, among other charges. Citigroup claimed that the NASD lacked jurisdiction over the claims - but lost. More payouts -- for example, Citigroup's predatory lending settlement with the Federal Reserve is still being paid out, click here to view the settlement's website...

Update of August 22, 2005: Two of Citigroup’s far flung purchases last week -- a move on oil company, Inchon Oil Refinery Co., in South Korea (how’s that for environmental standards?) and, a department store with a subsidiary called Parasito.com. Yes, parasite -- that’s Citigroup.

Update of August 15, 2005: Oh, five-point ethics. How does Citigroup’s $50 million “investment” with Thomas W. Jones look now, with the SEC last week charging Jones with fraud. Settling Citi in May paid $208 million to settle the SEC's fraud charges against two of its divisions, including Smith Barney Fund Management LLC. Now they’re phasing that name out. The SEC alleged that the divisions misrepresented and omitted facts when recommending to the funds' boards of directors that the funds change from a third-party transfer agent to an agent that was a Citigroup affiliate. Jones “approved the final structure of the deal fully aware that the affiliated transfer agent was projected to make tens of millions of dollars in profit each year for doing minimal work,'' the SEC asserts in its complaint. But what of the $50 million “investment”?

This, we hadn’t seen until last week -- the publication Euromoney of July 2005 reported that ICP

“has a question. How come the firm, which undertook in January 2003 on its corporate citizenship website to stop making so-called HOEPA loans, has, according to its own home mortgage data for 2004, made a further 837 such loans? The reference is to high-cost loans charging 800 basis points or more above treasuries that are usually extended to borrowers with poor credit histories in poor neighborhoods and now covered by the Home Ownership and Equity Protection Act. Into the breach steps Robert Willumstad, president and chief operating officer of Citigroup. He tells Lee that the bank doesn't make such loans and that Lee must have misinterpreted the data. That's odd, Lee replies, as he is looking at a spreadsheet of loan figures provided by Citigroup that has a HOEPA status column with 837 loans marked yes. Home Mortgage Disclosure Act data is as familiar ground to Lee as negative operating leverage ratios are to the average bank analyst. Citigroup later pleads that although it instituted the policy of not originating Hoepa loans in January 2003, various divisions that it had acquired through the purchases of Associates and parts of Washington Mutual only phased in this new approach to lending over time. It's a messy fudge of an explanation.”

Emphasis on “fudge”....

Update of August 8, 2005: Continuing to pay out settlements -- on August 4, Citigroup disclosed it has settled three more investor lawsuits accusing its analysts of issuing biased research and failing to disclose conflicts of interest related to three telecommunications companies: Level 3 Communications, Williams Communications Inc. and XO Communications. A Citigroup spokeswoman declined to elaborate on the regulatory filing... But on WNYC radio on August 5, Citigroup’s Robert Rubin pontificated about our “probabalistic” universe and his existential leanings. Sleazy is as sleazy does...

Update of August 1, 2005: From a complaint against Citigroup from an employee in Europe, the other details of which remain confidential for now at his request: “In case this is not yet known in the U.S., a trick that is being used in Europe (especially Germany) by Citibank in Consumer Finance is the ‘Top Up’ -- Citi offers a loan to someone, then after a few months of repayments, Citi proposes (‘you’re a good customer’) an increase in the loan amount, which is processed through an early repayment and a new loan. What Citi doesn’t tell the customer is that the T&C include the payment of a penalty in case of early repayment, penalty that is charged and paid with the new loan, which makes it ‘invisible’ to the customer but juicy for the bank.” Sounds like Citi...

Update of July 25, 2005: Citigroup’s predatory lending is global. A recent example, from AFX News of July 21: “South Korea's financial watchdog said it had launched a probe into allegations that Citibank Korea Inc, the local unit of US banking giant Citibank, has cheated customers out of millions of dollars while selling mortgage loans. 'The Financial Supervisory Service (FSS) is investigating the allegation and it will take proper measures in accordance with the outcome of the probe,' the FSS said in a statement. The FSS said it told Citibank Korea yesterday to submit documents including the protocols for the loans in question” following a complaint that “the bank had skimmed off 7.4 bln won from customers by applying fixed rates to floating-rate mortgage loans between the end of 2001 and early this year. Citibank Korea allegedly failed to lower interest rate on the loans when rates began to fall from late 2002.”

Meanwhile, Sandy Weill wants to keep all his perks while starting a buy-out fund with the same Saudi prince who’s now funding HSBC’s (see last week’s report, below). Shameless...

Update of July 18, 2005: Citigroup, blaming its systemic compliance violations on particularly individuals like Thomas Jones, disclosed in an SEC filing last week the dismissed Tom Jones is being given $50 million by Citigroup. Some ethics plan, eh? Meanwhile, it was announced on July 14 that Bob Willumstad is leaving Citigroup in September. Maybe they’ll give him another $50 million -- to go make super high cost HOEPA mortgage loans. That’s the last we’ll have to say about him, and his previously reported on (by ICP) wire-transfer-to-nowhere, unless he or it resurfaces...

In Citigroup’s headquarters, the New York Daily News, that is, which on July 15 reported that

“The Bronx firm demolishing a vacant supermarket that collapsed in upper Manhattan yesterday has links to the mob and has been cited for several safety violations during the last year, the Daily News has learned. Safeway Environmental Corp. is tied to Harold Greenberg, a twice-convicted felon who the FBI says is an associate of the Gambino crime family. Greenberg's Big Apple Wrecking and Safeway share the same Bronx address and phone number, and Safeway's equipment is leased from Greenberg's Dynamic Equipment, records show. Greenberg pleaded guilty to wire fraud in 1993 and was sentenced to 15 months for his role in a bid-rigging scheme involving Gambino-controlled demolition companies... In February 2003, Safeway withdrew its application to bid on school projects after the School Construction Authority inspector general began asking questions about its ownership... Within the last 15 months, Safeway has twice been cited by federal officials for safety problems they deemed ‘serious.’ Safeway referred all calls to spokesman Bob Liff, who declined to comment.”

Inner City Press has looked into this. The referenced “Bronx address” is 1379 Commerce Avenue, Bronx NY 10461. Surprisingly, or not, Uniform Commercial Code records show loans to this company by Citigroup. So what due diligence does Citigroup do?

Update of July 11, 2005: It was reported last week in Rome that Italian prosecutors have placed under investigation Citigroup’s Steven Compton, Spiros Skordors, David Riggs, Daniel Leadberter, Jan Robyns, Cristopher Sayerz and Simon Wivell for -- what else? -- the Doctor Evil bond trade...

According to an SEC filing last week, Citigroup owns over 20% of Stratos International, which makes optical, optoelectronic and radio frequency and microwave components, subsystems and interconnect products used in telecom, video enterprise and military markets. Yes, military...

Four months’ notice? On July 7, Citigroup put out a press release stating that “Chuck Prince, Chief Executive Officer, and Bob Willumstad, President and Chief Operating Officer, will host a Citigroup Investor/Analyst Day on Friday, November 18, 2005 at 8:30 AM.” That’s in eighteen weeks’ time. And given the repeated (trial balloon) rumors, such as Willumstad to the GSEs, or Morgan Stanley, will he still be there in eighteen weeks? If so (or not), will he have retracted his blatantly misstatement that Citigroup didn’t make super high cost HOEPA loans in 2004?

And where, we ask, is antitrust enforcement? Last week HSBC announced a $200 million joint venture with Saudi Arabian Prince Alwaleed bin Talal. The money will move through HSBC Kingdom Africa Investments (Cayman) LP. HSBC’s CEO Stephen Green said, “We are particularly pleased to be a part of this venture” -- with the largest shareholder of Citigroup...

Update of July 5, 2005: on July 5, ICP commented to the Office of the Comptroller of the Currency on Citibank’s application to acquire the credit card operations of Federated Department Stores. Just after announcing this proposal, Citigroup admitted having lost the Social Security numbers of 3.9 million consumers. Why impose Citigroup’s lax (and predatory) practices on yet more consumers?

A policy issue raised in ICP’s comments to the OCC is that, while the OCC by suing the New York State Attorney General is trying to block an investigation of Citibank and its operating subsidiaries, the OCC until now has taken the position that it is not required to, or even that it cannot, review the record of CitiFinancial. This is what the OCC has told ICP in response to ICP’s comments to the OCC about Citigroup’s super high cost HOEPA loans in 2004. But since any legitimate fair lending review of Citigroup must cumulate and compare the subprime CitiFinancial with the predominantly prime Citibank and operating subsidiaries, it currently appears that the OCC is in effect blocking any comprehensive, consolidated fair lending review of Citigroup / Citibank. From ICP’s comments to the OCC:

This is problematic: for example, in the New York City MSA, in which Citibank N.A. has CRA duties, Citigroup (Citibank and CitiFinancial, et al.) confines African Americans seven times more frequently than whites to higher cost, rate spread loans. Also, Citigroup (including Citibank and its operating subsidiaries) in essence redlines whole states, profiling them and limiting its credit offers in these state to higher cost, rate spread loans (see below for more analysis). The OCC must act (and allow action) on these outrageous disparities -- in this proceeding, by explicitly considering the record of CitiFinancial as well as Citibank, and, ICP requests, by changing its position on action on Citigroup’s (including Citibank’s) records, in New York State and elsewhere.

ICP has submitted to the OCC (and Federal Reserve and FDIC) the pattern by which Citigroup redlines whole states, profiling them and limiting its credit offers in these state to higher cost, rate spread loans. Developing...

Update of June 27, 2005: The plot continues to thicken around the 837 super high cost HOEPA loans Citigroup reported in 2004 (after claiming to have stopped such loans in January 2003). ICP raised the issue to Citigroup (leading to a knee jerk denial by CFO Bob Willumstad, which he has yet to retract), then to the regulators. The Office of the Comptroller of the Currency wrote back saying that none of the HOEPA loans were by a national bank or its operating subsidiaries. But for a number of the loans, Citigroup reported the OCC as the “Agency ID.” A second letter to the OCC raised this, and by letter to ICP dated June 21, 2005, the OCC’s head of large bank supervision Douglas W. Roeder writes:

“In response to your May 23, 2005 letter, we have determined after discussions with Citibank, NA, that Citigroup’s originally submitted HMDA Loan Application Registers (LARS) did not accurately reflect the correct agency code in all cases. This error has been corrected and Citigroup should be sending you an updated LAR reflecting the correct agency code for each loan reported on the LAR.”

ICP has yet to receive the corrected data from Citigroup (which as noted below has already corrected its data once, having under-reported its high cost / rate spread loans by over 80,000 loans). Will Citigroup be providing corrected data to, for example, the New York Attorney General’s Office (whose investigation of Citigroup, The Clearing House’s lawsuit on behalf of Citigroup is seeking to block)? Yet again: rather than send time and money schmoozing (for example the Georgia Attorney General’s office, as reflected in documents obtained by ICP under the Freedom of Information laws), how about improving?

Meanwhile, on the June 24 conference call about its proposed swapping with Legg Mason, Willumstad said, "I don't think we're prepared to disclose" over what time period a reduction in the stake Citigroup would take in Legg Mason would take place. Reuters’ June 24 article, headlined “Citigroup garage sale may be over,” recounts that “last July, Charles Prince, the chief executive of Citigroup Inc., said the world's largest bank would hold a ‘garage sale’ to rid itself of assets it didn't need and focus on businesses where it wanted to grow.” Funny choice of words -- as recounted below on this page, CitiFinancial would take lists of personal property like fishing rods as supposed security for loans, to sell credit insurance on them, leading some to question whether Citigroup would foreclose and hold a “garage sale”....

Sandy Weill, meanwhile, was hob-nobbing with Vladimir Putin on June 25. As reported in the Moscow newspaper Vedomosti, “Sanford Weill, CEO of Citigroup, will lead the Americans who are meeting with Putin. At the meeting with the president on February 11 Weill offered to organize a ‘visit’ of a delegation of US business executives and Putin supported this idea, says a member of the presidential administration. Susan Tether, a spokeswoman for Citigroup Europe, confirmed that Weill will come to Russia together with several clients of the bank to take part "in several meetings," but refused to reveal the details. Alcoa CEO Alain Belda will visit Putin as a member of Citigroup's board of directors, a company employee explained... Alcoa has purchased two aluminum-rolling enterprises from RusAl for $300 million.” Equator principles, anyone?

Update of June 20, 2005: On June 16, both the Office of the Comptroller of the Currency and the Clearing House, a trade association of large banks, sued the New York Attorney General, seeking an injunction against investigation of disparities in the subprime lending of HSBC, Wells Fargo, JP Morgan Chase and others. We say “and others” because, despite reports that Citigroup is not part of this, the Clearing House’s Order to Show Cause (available here in PDF) seeks to block investigation of Citibank, N.A., by name. This trade association would not include its largest member’s name without consent. So those reporting that Citigroup is not seeking to block fair lending enforcement are doing Citi a favor, as well as being inaccurate.

On the other hand, here’s detailed reporting, from the San Francisco Chronicle of June 15: “It turns out that the financial consultant who advised BART on a big bond deal that went to Citigroup Global -- just before taking a job with the banking giant -- advised two other public agencies that made similar deals with Citigroup as well.... Alex Burnett, who took a job this spring at Citigroup Global Markets Inc. weeks after recommending that BART give the company a lead role in a $600 million bond deal. Now we've learned he played a similar role in two other bond deals with public agencies that could put millions of dollars into Citigroup's coffers. In April, the East Bay Municipal Utility District, which Burnett also advised, awarded Citigroup a lead role in underwriting $795 million in new and refinanced bonds for construction work. Burnett also acted as financial adviser for the Metropolitan Transportation Commission in picking a group of banks that included Citigroup Global to underwrite $1.5 billion in bonds from regional Measure 2... Becerra said Burnett had told EBMUD that he was in talks with Citigroup about a possible job before he participated on a five-member panel that interviewed underwriting candidates March 15... BART Board President Joel Keller was more skeptical, telling us that ‘on the surface, there is the appearance of impropriety.’ ... Burnett has not returned our phone calls seeking comment.” Typical... And this, from the mailbag:

Subj: CitiFinancial records

Date: 6/13/2005 10:23:23 AM Eastern Standard Time

From: [ ]

To: CitiWatch [at] innercitypress.org

Dear ICP,

I was not shocked to read the info about Citi's losing customer info. For years now [people] have been retrieving information from their dumpsters to steal mortgage accounts from them. they have even caught someone I know doing it and a month later they still didn't shred anything... Three boxes that someone had set out back of an office. In the boxes were old files with customers info. I mean everything from driver licenses to social security cards to credit reports and bank info... there was even complete employee files in there. How stupid can they be. They don't even protect themselves. -Anonymous

Update of June 13, 2005: Now Citigroup proposes to pay out $2 billion for its role in the Enron fraud. Citigroup says it has already accounted for this. It’s called, “A cost of the buiness model.” In further lay-off news, CitiFinancial will close an Owings Mills, Maryland center that handles loan defaults and has about 110 employees. The layoffs - scheduled for the last two weeks of July, according to Maryland Department of Labor, Licensing and Regulation - follow the closing last year of a back-office support center with 116 workers in Hanover, Maryland. The jobs were consolidated at centers in Charlotte, N.C., Dallas and Phoenix. But where’s the customers’ data? Although the Ohio AG's office does not have as much enforcement power with financial institutions as it does retailers, Ohio AG Petro said, "We'll be rattling the cage of Citigroup in the same way" it did DSW (a store in Ohio that sells, among other things, shoes). We’ll see. Petro’s office has received 116 complaints against Citigroup, most of them against CitiFinancial, since 2000... For or with more information, contact us.

Update of June 6-7, 2005: CitiFinancial on June 6 admitted that it has lost nearly four million consumers’ files -- all customers of CitiFinancial’s branch system. The files lost include Social Security numbers. While the company expressed shock and predicted that no harm will come of it, it’s worth noting (as much of the other press didn’t) that CitiFinancial has had this problem before. For example, in Florida in 2002 -- as reported by the local NBC TV affiliate there,

“Citifinancial even left its files in convenient boxes, making it easy for anyone who wanted to cart them away. NBC2 decided to find out what kinds of records were there. What was found surprised even seasoned investigators: drivers license information, credit reports, social security numbers, even bank account numbers — for more than 1,000 people. ‘This would be a treasure trove of information for an identity thief. People’s names, social security numbers, banking information,’ said David White of the Collier County Sheriff’s Office Economic Crimes Unit. White said there was enough personal information in the company’s trash for an identity thief to bankrupt anyone. He said a thief could easily take over someone’s bank accounts with the data contained in the trashed documents... A spokesperson for Citigroup in New York admits wrongdoing in a written statement. It reads: ‘Keeping customer information secure is a top priority for Citifinancial. In an isolated incident at one of our offices, some files for inactive loan accounts that should have been destroyed according to our normal procedures were disposed of improperly.’” -- click here to view

Citigroup’s June 6, 2005, statement included this quote: "’Customer security is of paramount importance to Citigroup,’ said Debby Hopkins, Chief Operations and Technology Officer of Citigroup. ‘While this incident affects the customers of only one of our businesses’” -- a business through which, even before losing the data, Citigroup was harming consumers. And now Citigroup wants to buy more consumers and their data -- all those who have credit cards with Federated Department Stores (which operates Macy's and Bloomingdale's), and May, which Federated is trying to acquire.

Update of June 6, 2005: The (reverse) redlining of whole regions of the United States by the nation’s large bank, Citigroup, is the subject of an ongoing investigation by Inner City Press / Fair Finance Watch. Here now is a state-by-state presentation, by percentage of loans made in each state that are higher-cost “rate spread” loans, of Citigroup’s lending, compared in all but seven instances (coming soon) to the similar percentage in the state for an aggregate comprised of the three largest mortgage lenders in the country. For this aggregate, the percentage varies from six to twenty four percent. For Citigroup, the spread is from nine percent to a high of 71.61 percent, in Mississippi. In West Virginia, ninety-one percent of Citigroup’s loans to African Americans were higher-cost rate spread loans. But the disparate pattern goes beyond race. Here’s above-described presentation, by state abbreviation, then percentage of Citigroup’s loans in the state in 2004 that were higher cost, rate spread loans, then the percentage for the aggregate, for all but seven states:

MS - Citi: 71.61% / Agg.: 24.72%; AL - Citi: 65.50% / Agg.: 18.13%; TN - Citi: 65.0% / Agg.: 14.25%; WV - Citi: 61.13% / Agg.: 20.76%; ID - Citi: 50.58% / Agg.: 8.81%; KY - Citi: 50.18%; OK - Citi: 49.35% / Agg.: 20.75%; LA - Citi: 48.54%; SC - Citi: 47.02% / Agg.: 14.29%; VT - Citi: 45.56%; ND - Citi: 45.41% / Agg.: 13.18%; NC - Citi: 45.20% / Agg.: 10.26%; OH - Citi: 44.35% / Agg.: 11.1%; PR - Citi: 41.56%; TX - Citi: 41.09% / Agg.: 13.60%; WI - Citi: 40.14% / Agg.: 11.28%; NM - Citi: 39.62% / Agg.: 14.27%; IN - Citi: 37.97% / 12.67%; AR - Citi: 36.64%; PA - Citi: 36.42% / Agg.: 9.58%; KS - Citi: 36.23% / Agg.: 11.68%; GA - Citi: 36.09%; MI - Citi: 33.79% / Agg.: 12.09%; HI - Citi: 33.73% / Agg: 5.22%; ME - Citi: 32.06% / Agg.: 9.96%; WY - Citi: 31.56% / Agg.: 13.54%; VA - Citi: 31.21% / Agg.: 8.11%; WA - Citi: 30.49% / Agg: 6.38%; IA - Citi: 29.59% / Agg: 13.08%; MT - Citi: 29.39%; NE - Citi: 29.07% / Agg: 13.83%; DE - Citi: 26.89% / Agg: 7.17%; UT - Citi: 25.63% / Agg: 10.70%; RI - Citi: 24.48% / Agg: 10.41%; AZ - Citi: 23.94%; SD - Citi: 23.44% / Agg: 9.39%; FL - Citi: 23.28% / Agg: 9.29%; MD - Citi: 22.10%; AK - Citi: 21.19% / Agg: 12.19%; NV - Citi: 20.66% / Agg: 8.01%; NH - Citi: 20.66% / Agg: 10.18%; MO - Citi: 20.43% / Agg: 17.94%; OR - Citi: 20.41% / Agg: 7.25%; IL - Citi:18.76% / Agg: 12.67%; MN - Citi: 17.68% / Agg: 6.71%; CO - Citi:16.05% / Agg: 8.13%; CT - Citi: 15.92% / Agg: 9.10%; NJ - Citi: 15.73% / Agg: 7.28%; MA - Citi: 12.06% / Agg: 7.63%; NY - Citi: 11.90% / Agg: 7.26%; CA - Citi: 9.21% / Agg: 6.08%

There is a major problem here, one that ICP is raising, state by state, to attorneys general and beyond. Meanwhile, in Citigroup’s wider business, it’s another week, another settlement. On May 31, Citigroup issued a press release saying that it will disgorge about $128 million and pay $80 million in penalties in the settlement of an SEC probe into arrangements between mutual funds of Citigroup's Smith Barney unit, an affiliated transfer agent and an unaffiliated sub-transfer agent. Citigroup noted that it has neither admitted nor denied wrongdoing. That is: still in denial... Beyond its own disparate and predatory lending, Citigroup Mortgage Loan Trust Inc.'s asset-backed pass-through certificates, series 2005-HE1, which closed on May 10, 2005, included loans from Argent Mortgage Company, LLC, and Olympus Mortgage Company -- both units of Ameriquest, which is under investigation in 25 states. Birds of a feather... For or with more information, contact us.

Update of May 31, 2005: In continuing analysis of the 2004 Home Mortgage Disclosure Act data, Inner City Press / Fair Finance Watch has come upon a striking disparity in Citigroup’s credit offerings by state and region. Among ICP’s findings: while 12.06% of Citigroup’s 8797 loans in Massachusetts in 2004 were are or over the rate spread, fully 71.61% of Citigroup’s 1909 loans in Mississippi were rate spread / higher cost. In Tennessee, 65.50% of Citigroup’s 5548 loans were rate spread / higher cost. Other impacted states, (reverse) redlined by Citigroup, include Alabama, West Virginia, Kentucky, Oklahoma, Louisiana, South Carolina, North Carolina, Ohio, Georgia, Michigan, Iowa, Texas, etc.. ICP has filed complaints with the attorneys general in these states and others. [For more, see numbers in Report of June 6, 2005, above.]

Update of May 23, 2005: ICP on May 20 submitted to the Florida Attorney General’s office an analysis of and demand for action on the glaring disparities in Citigroup’s 2004 mortgage lending in Florida:

Citigroup -- Whites: 35,194 applications, leading to 9438 denials (26.81% denied) and 17,786 originations; 3557 [or 20.0%] exceeded rate spread.
African Americans: 8061 applications, leading to 3338 denials (41.41% denied, 1.54 times higher than whites) and 2831 originations; 1410 [or 49.81 percent] exceeded rate spread [2.49 times higher / more likely to be over rate spread than whites].

Latinos: 8484 applications, leading to 2784 denials (32.81% denied, 1.22 times higher than whites) and 3574 originations; 708 [or 19.81 percent] exceeded rate spread [0.99 times “higher” / more likely to be over rate spread than whites].

On May 17, two days before issuing a misleading press release about dropping arbitration on real estate loans, Citigroup added an “editor’s note” to its corporate citizenship web site, on the matter of the HOEPA loans in its 2004 mortgage data. The editor’s note states:

“It is CitiFinancial’s policy not to originate loans covered by the Home Ownership and Equity Protection Act (HOEPA)... Yet some confusion has arisen because we implemented this policy over time. Our CitiFinancial branch network in the U.S. adopted the policy in January 2003, Citicorp Trust Bank adopted it in April 2004, and Associates Financial Services of Puerto Rico did so in July 2004. If we purchase a lender that makes HOEPA loans – as we did in 2004 with Washington Mutual Finance Corp. – as soon as we integrate the business it no longer makes them. And in the event that a HOEPA loan is inadvertently made, it is our policy to work with the borrower to lower the interest rate.”

First, we note that the “confusion,” if any exists, starts with Citigroup chief operating officer Robert Willumstad, who on April 19 from the stage at Carnegie Hall directly denied that there were any HOEPA loans reported in Citigroup’s 2004 HMDA data. That statement was false and has yet to be retracted.

Second, even the statement itself shows the gaping loopholes to Citigroup’s supposed commitment. Citigroup acquired Associates in late 2000 -- but “Associated Financial Services” continued making HOEPA loans until at least July 2004. According to Citigroup, it can take more than three and a half years to “integrate” an acquired business. Given the number of acquisitions it makes (at least up until the Federal Reserve’s March 2004 “acquire-no-more” order), Citigroup always has an acquired-but-not-integrated business through which to violate its commitments.

Given the duplicity of Citigroup’s handling of this whole matter, for example beyond Mr. Willumstad’s uncorrected misstatement having found the HOEPA loans and trying to cover them up, including by filing a separate 2004 Loan Application Register for Washington Mutual Finance Group, the acquisition of which Citigroup consummated on the ninth day of the year, and now the quiet footnote two days before making another supposed commitment, one presumes that Citigroup uses similar loopholes to its other commitments, on money laundering, five point ethics, etc.. Again the suggestion: less schmoozing, focus on improving. Until next time, for or with more information, contact us.

Update of May 19, 2005: Earlier today, Citigroup issued a press release making much of its commitment to end mandatory arbitration on its real estate loans by August 2005. Given that only two weeks ago, Citigroup finally admitted that it continued making super high cost HOEPA loans for at least a year and a half after it claimed to have stopped, there is reason to be dubious of this "new commitment." If Citigroup violated its previous commitment, how is this one different? There is a way: CitiFinancial legal officials have told consumer advocates that the arbitration announcement is little more than free publicity, given the new federal class action legislation and arbitrators' increasing willingness to hear disputes on a quasi-class action basis. Also, many binding mandatory arbitration clauses, including CitiFinancial's, have been found unconscionable and unenforceable by the courts. So -- free publicity. Somewhat shameless, though. The release says that says that Citigroup "Implemented a policy to not originate HOEPA loans in CitiFinancial, beginning with the branch network." As explained below, Citigroup claimed to have stopped HOEPA loans in January 2003, but reported 837 HOEPA loans in its 2004 HMDA data. These include loans made in 2004 by the branch network. See, e.g., New York Times of May 4, 2005, and the Reports below, back to April 19, 2005. Also unaddressed: Citigroup's glaring disparities in its subprime lending, see for example this sample ICP study, of the New York City MSA (where Citigroup confines African Americans to high cost / rate spread loans seven times more frequently than whites, much worse that its peers). Shameless...

Update of May 16, 2005: This week we step back, temporarily, from drilling ever-deeper into the 2004 Home Mortgage Disclosure Act data. In another part of Citigroup’s subprime scheme, the company announced on May 10 the combination of its auto finance subsidiaries Arcadia Financial LTD, Auto One Acceptance Corp. and TransSouth Financial Corp. -- the last of these was acquired along with Associates First Capital Corp. in 2000. Since ICP’s inquiring into Citigroup’s 2004 HOEPA loans found that Citigroup has kept Associated-branded subsidiaries, to work around supposed “best practices” it has announced, one wonders what other Associates subsidiaries are out there in the netherworld of the Citigroup universe. In any event, the subprime car lending will now operate as CitiFinancial Auto.

And now a sample from the mailbag, which has been on hold during all this data:

Subj: Citigroup Watch
Date: 4/13/2005 3:48:18 AM Eastern Standard Time
From: []
To: CitiWatch [at] innercitypress.org

My partner has been looking for a job recently, and got an unplanned call from Primerica offering her an interview for a "management" position. She's been studying to be an actuary and so has a financial and operations management background (although not much experience), so figured it was a good opportunity. She went to the interview and started to be concerned when they mentioned "sales", but they downplayed how much of the job was sales. They told her to go to a "benefits" meeting, and to bring me with; so, she did.
Right away, we knew something was wrong. The whole meeting was set up like an infomercial; they were trying hard to *sell* the company, *sell* the position, and even sell Weill as some sort of genius. The first 20 minutes or so of the presentation, plus any time that you got there early, was spent showing rave reviews of Citigroup and Weill from various publications. They avoided talking about what the position was for most of the meeting. My partner and I started exchanging notes, wondering what was going on. The more they got into it, the worse it became: they set up their system for employees as a pyramid scheme, with up-front costs, and pay on commission.
They even had a drawing displayed that was pretty much a pyramid, showing how you profit from those under you, and those under them. The guy speaking tried to sell it as a "get rich scheme" - by the end, he was talking about meeting with Pres. Bush, vacationing in the tropics, boasting about his various new cars (after pointing to his new Humvee, asking the audience, "How would you like to get a new hummer for your birthday like I did?"), showing off his mansion, and talking about how he plans to buy a private jet. I've never seen such unbridled greed and manipulation of jobseekers in my life; I hardly can even scratch the surface of what it was like; even the sword on the wall, right next to the presenter, was creepy.
I tried to get my partner to walk out in the middle of it, but she was embarrassed to make a scene. We both vented as soon as we got out, furious that they lied to her to get her to listen to an hour and a half sales pitch. The more I read about them, now, the madder I get about the whole ordeal.

Until next time, for or with more information, contact us.

Update of May 9, 2005: The New York Times of May 4 reported that “Citigroup lenders made hundreds of high-cost home loans to customers with poor credit histories in 2004, even though the company had adopted a policy a year earlier to no longer issue such loans, the bank acknowledged yesterday.” But Citigroup chief operating officer Bob Willumstad, who from the stage of Carnegie Hall on April 19 directly denied even the presence of HOEPA loans in Citigroup’s 2004 HMDA data, has never acknowledged that what he publicly claimed was and is not true. Citigroup’s chairman Sandy Weill, who referred the question about the HOEPA loans to CEO Chuck Prince, who passed the buck to Willumstad, was recently in Turkey with Citi Global Bank head Michael Klein, meeting with prime minister Recep Tayyip Erdogan. Watch out... On the HOEPA loans, Citigroup’s deceptions and/or cover-up were in fact even worse than reported in the New York Times. Fully 180 of the 837 HOEPA loans were reported in Citigroup’s HMDA data has having been made by “Washington Mutual Finance Group.” At first after ICP raised it, Citigroup claimed that these loans were made by Washington Mutual Finance Group prior to its acquisition by Citigroup. But as it turns out, that deal was consummated on January 9, 2004. So were the 180 loans all made in the first nine days of the year? It is striking that Citigroup chose to separately report some of its 2004 data as “Washington Mutual Finance Group,” a company it acquiring in the year’s first month. Another subprime acquisition of Citigroup’s, Easy Money, bought half-way through the year, didn’t report its own data. It appears that the only reason for Citigroup’s separate reporting for Washington Mutual Finance Group was an attempt to distance itself from the HOEPA loans, which were made AFTER Citigroup acquired the company. It just gets worse and worse....

The grapevine has it that CitiFinancial, just after having to acknowledge violating its previous “best practices” commitment, may make a *new* commitment: to drop mandatory arbitration from some loan contracts. The same grapevine -- of Citigroup’s chosen “partners,” mind you -- says that Citigroup has admitted that such an announcement would be less than meaningful at this point, after passage of the federal class action legislation and since arbitrators have shown a willingness to hear cases as a class. “Free public relations,” is how one Citigroup lawyer has characterized an announcement dropping arbitration. We’ll see.

Another indicative development: a recent fraud lawsuit by the attorney general of New Mexico against Furniture World Inc. for “delivering used, broken or damaged furniture to customers who had paid for new merchandise” also alleges that as the sale financier, CitiFinancial “continued to charge customers who had canceled contracts, which led to delinquent accounts.” (Albuquerque Journal, May 6). This is CitiFinancial’s Sale Finance program, one goal of which is to pitch high-cost home-secured loans to those who buy furniture. Employees are tracked on what percentage of such “Sales Finance Conversions” they can get the customers to undertake. A pointed question: why does CitiFinancial work with merchants like this whose defense is that they don’t provide refunds and that all merchandise is sold ‘as-is.’? Maybe the answer is somewhere in the fine print of the “Five Point Ethics Program.” Or in Turkey, where Sandy Weill was looking for it...

ICP Fair Finance Watch continues drilling deeper into the 2004 Home Mortgage Disclosure Act data. Following its petitioning last week of state attorneys general, ICP was asked to produce a study of disparities by gender as well as race. The results, being forwarded to those who requested them, are not pretty. Here’s Citigroup:

White men: 169,992 originations of which 37,974 (or 22.34%) were at rate spread

White women: 67,291 originations of which 21,689 (or 32.23%) exceeded the rate spread (1.44 times higher / more likely to be rate spread than white men)

African American men: 16,512 originations of which 8499 (or 51.47%) exceeded the rate spread (2.30 times higher / more likely to be rate spread than white men)

African American women: 16,116 originations of which 9099 (or 56.46%) exceeded the rate spread (2.53 times higher / more likely to be rate spread than white men)

Hispanic men: 22,757 originations of which 7393 (or 32.25%) exceeded the rate spread (1.44 times higher / more likely to be rate spread than white men)

Hispanic women: 9241 originations of which 3649 (or 39.49%) exceeded the rate spread (1.77 times higher / more likely to be rate spread than white men)

ICP has provide this and other analysis to the regulators and state attorneys general, demanding investigation and action, including on the issue of Citigroup’s HOEPA loans, and reportedly impending announcement about arbitration -- both may constitute false advertising....

Update of May 2, 2005: The scandal of Citigroup’s super high cost HOEPA loans -- as well as its disparate lending, particularly in its headquarters city -- has now been raised to attorneys general not only in New York, but in dozens of other states. While Citi’s press office bobs and weaves, those in charge look away and face no repurcussion. Take for example Mister Robert Willumstad. Since 2002 he’s been in charge among other things of Citigroup’s operations in Mexico and Puerto Rico. In Puerto Rico Citigroup continued blithely making HOEPA loans long after the Harry Goff commitment. When this violation of the commitment was discovered, no public disclosure was made. And on April 19, from the stage of Carnegie Hall, Robert Willumstad outright denied that there are any HOEPA loans in Citigroup’s 2004 data. One wag wondered why Willumstad (yes, that’s four W’s in a wrow) didn’t say, “I don’t know, someone will get back to you.” But this is the time for taking charge (if not responsibility) at Citi. Talk about ethics, but deny, deny, deny. And in the nearly two weeks since, there’s been no retraction, no letter to the regulators misled, not even a change to the Citigroup web site. Somewhere we heard it: “by your fruits shall ye be known.”

Update of April 25, 2005: in May 2004, Citigroup was fined $70 million by the Federal Reserve, including for violations involving Regulation Z, which implements the Home Ownership and Equity Protection Act of 1994 (HOEPA), which applies to very high cost mortgage loans (eight percentage points over comparable Treasuries on first liens, for example). Citigroup’s response including a statement that it had stopped making loans covered by HOEPA in January 2003. This statement appears, among other places, on Citigroup’s web site -- in a May 27, 2004 Memo and a list of what Citi says it doesn’t do.

When the 2004 Home Mortgage Disclosure Act data was released, ICP Fair Finance Watch found in Citigroup’s data at least 837 loans that Citigroup itself had reported as covered by HOEPA.

On April 19, ICP’s executive director attended Citigroup’s annual shareholders’ meeting and asked for an explanation of this seeming violation of Citigroup’s public statement of its “best practices.” Citigroup chairman Sanford Weill said that CEO Charles Prince would answer the question, but he did not. Rather, Mr. Prince referred the question to Citigroup chief operating officer Robert Willumstad, who stated that ICP must be misreading the mortgage data by incorrectly inferring from the interest rates at which Citigroup’s loans are made that some are covered by HOEPA. But in the data, there is a column with a simply yes or no answer: covered by HOEPA or not. And 837 loans in the data Citigroup provided to ICP (and to it regulators) are covered by HOEPA.

After Mr. Willumstad’s denial from the stage of Carnegie Hall, where the meeting was held, two Citigroup staffers summoned ICP’s director out into the lobby. They acknowledged that hundreds of loans in Citigroup’s 2004 data are covered by HOEPA. They put the number at 797, and according to ICP's notes broke that figure down as follows:

180 HOEPA loans attributable, they said, to the acquired Washington Mutual Finance Group pipelines or to unexplained "errors;”

29 HOEPA loans by CTB, Citicorp Trust Bank;

582 HOEPA loans by "Associates Puerto Rico;" and

six HOEPA loans by CitiFinancial Puerto Rico.

Because the meeting was nearly over, ICP’s director went back in and asked a third question: "There seems to be a disconnect between senior directors and the staff at CitiFinancial, because they've just acknowledged that Citigroup did make and report HOEPA loans in 2004, contrary to the statement on Citigroup's web site, and contrary to what Bob Willumstad just said. You should correct the statement on your web site, and all regulators you've made that representation to, forthwith."

There was no response from Citigroup. Further inquiry by ICP has found this breakdown:

611 HOEPA loans by “Associates International Holding Company;”

29 HOEPA loans by Citicorp Trust Bank fsb (fka Travelers Bank & Trust);

180 HOEPA loans by Washington Mutual Finance (now CitiFinancial); and

17 HOEPA loans by CitiFinancial Services of Puerto Rico.

It is ICP's position violates both the letter and spirit of Citigroup’s “commitment.” There are HOEPA loans reported as CitiFinancial, in 29 states as well as Puerto Rico, and it is not at all clear that these were all acquired among with the subprime lender “Easy Money,” which Citigroup acquired in 2004. Latin Finance magazine of July 2002 reported that “Willumstad will now have an oversight role in Citigroup's operations both in Mexico and Puerto Rico. Willumstad, president of Citigroup and Chairman and CEO of the company's global consumer group, will run credit cards, consumer finance and retail branch banking.” The American Banker newspaper of June 12, 2004, was even clearer: “Mr. Willumstad, 56, also assumes full responsibility for Citi's activities in Mexico and Puerto Rico.” Given Citigroup’s many statements that it was integrating and reforming Associates First Capital Corporation, that its defense now is that it could continue making HOEPA loans as long as it kept subsidiaries with the old Associates name is disingenuous and troubling. So too are Citigroup’s spin to journalists, and other rationalizations. For example, Citigroup has claimed that the distinction is that its operations on Puerto Rico only came under Harry Goff’s jurisdiction in mid-2004. But the commitment was not by, or about, one person, but rather the company. Citigroup has said that “Associates Puerto Rico” was run out of Dallas and not Baltimore. And? So what? Citigroup is in denial.

Inner City Press / Fair Finance Watch has reviewed, now for the New York City Metropolitan Statistical Area, the 2004 Home Mortgage Disclosure Act data of Citigroup, including the new information concerning which loans are subject to a rate spread (3% higher than comparable Treasuries on a first lien, and 5% on a subordinated lien), and has found that at Citigroup for all type of mortgage loans in the NYC MSA in 2004, African Americans borrowers were more than seven times more likely to receive a rate spread loan than white borrowers. Meanwhile, Citigroup denied the applications of African Americans 2.67 times more frequently than those of whites. Latino borrowers were 3.92 times more likely to receive a rate spread loan from Citigroup than were white borrowers, and Citigroup denied the applications of Latinos 2.35 times more frequently than those of whites.

Update of April 18, 2005: In a new low, Citigroup on April 13 informed ICP that the data Citigroup had given it on March 31 was incomplete and incorrect. Based on that data, provided by Citigroup the full month after ICP’s request, ICP conducted an analysis and found for example that for home purchase loans at Citigroup in 2004, African Americans were 4.34 times more likely to receive higher-cost rate spread loans than whites. Citigroup’s spokesman, asked to respond by the Associated Press and the American Banker newspaper, called ICP’s findings, and its director, “reckless,” and claimed that the data showed otherwise. See, e.g., “U.S. community group alleges Citigroup, Bank of America discriminate in mortgage lending,” by Eileen Alt Powell, Associated Press, April 4, 2005; “First HMDA Fallout - Activists Hit Citi, B of A,” by Hannah Bergman, American Banker, April 5, 2005, Pg. 1; and "Groups Make Hay of HMDA Data," National Mortgage News, April 11, 2005, Pg. 2.

On April 14, ICP received from Citigroup new compact disks and repeated its analysis. The number of originated loans and mortgage records have remained the same – 351, 811 loans and 1,218,402 records. But the number of the loans that are higher-cost rate spread loans has increased from 11,000 in the first, incorrect CD, to fully 93,103 rate spread loans in the second set of data. That is to say, the data Citigroup provided on March 31 underreported its 2004 higher-cost loans by 82,103 rate spread loans. Based on the new data, fully 26.46 percent of Citigroup’s originated loans in 2004 were higher-cost rate spread loans.

This is still lower than at HSBC, where 32.7% of 2004 loans were higher-cost rate spread loans – but it is much lower than at Wells Fargo, where 9.13% of 2004 loans were higher-cost rate spread loans. For home purchase loans, Wells Fargo denied the applications of African Americans 2.28 times more frequently than those of whites, and those of Latinos 2.02 times more frequently than whites. At Citigroup, the disparity for African Americans is higher (a denial rate for African Americans 2.54 times higher than for whites), while for Latinos it is slightly lower (a denial rate for Latinos 1.93 times more frequently than whites). These comparisons are for the holding companies as a whole, cumulating all of their HMDA-reporting affiliates.

Based on the new data, for home purchase loans at Citigroup in 2004, African Americans were 3.88 times more likely to receive higher-cost rate spread loans than whites. While this is slightly lower than the disparity, 4.34 to one, in ICP’s first study based on the data Citigroup provided, it is still much higher than for example the lenders reviewed above. Strangely, the Wall Street Journal’s April 11 report, based on Citigroup’s self-generated percentages, had Citigroup appearing less disparate than nearly all other lenders. Now it appears that the Journal’s April 11 report was based on Citigroup’s own self-presentation of its data and ratios, and not on (correct) raw data. Developing...

Update of April 11, 2005: Citigroup’s response to ICP’s analysis of its mortgage data, in which ICP as Citigroup had suggested looked at particular mortgage lending products, beginning with home purchase loans, was to call the conclusion “reckless.” This ad hominem response was delivered by CitiFinancial’s ex-journalist spokesman, to the publication he used to work for; then it was repeated to the Associated Press. See, “Group Alleges Bank Discrimination,” AP of April 4, 2004. For a bank which has been subject to prosecution and de-licensing for both predatory lending and money laundering to characterize as “reckless” the analysis of data, using methods the bank itself suggested, is laughable.

Citigroup's March 2005 memo about its then-still-withheld data said, in the second paragraph, "As a result of these efforts, the homeownership rate in the United States hit a stunning 69% last year... efforts to expand credit, particularly through the use of risk-based pricing, have contributed to these incredible gains in homeownership."
That's why it's more than legitimate (and not "reckless") to look specifically at risk based pricing for homeownership loans. A separate methodological issue it that we'd resist including home improvement loans in the analysis since Citigroup's home improvement loans include a slew of non-secured loans for which they don't report whether the loans are rate spread or not -- including these would skew any analysis.

Substantively, even as ICP analyzes other banks’ data as it arrives, Citigroup continues to stand out. For example while at Wells Fargo for home purchase loans, African Americans borrowers are 3.9 times more like to receive a rate spread loan that white borrowers, this is still less disparate than Citigroup, at which African Americans borrowers are 4.34 times more like to receive a higher-cost rate spread home purchase loan that white borrowers. Meanwhile, Wells Fargo denies the applications of African Americans for home purchase loans 2.3 times more frequently than those of whites, nearly as disparate as Citigroup’s 2.6 to one denial rate ratio between African Americans and whites.

Perhaps rather than spend its staff time on spin, and then insults, Citigroup ought to focus on improving its performance, including fair lending performance. Paraphrasing “Don’t move, improve,” the message / lesson to Citigroup is “Don’t schmooze, improve.” We’ll see.

Update of April 4, 2005: The 2004 Home Mortgage Disclosure Act data has come out, not unlike pulling teeth. Inner City Press has done an analysis of a half-dozen banks, and found the the largest (and most disparate) among them to be Citigroup -- click here to view. ICP’s top line finding so far with the 2004 data is that at Citigroup for home purchase loans, African Americans borrowers are more than four times more likely to receive a higher-cost / rate spread loan than white borrowers. Meanwhile, Citigroup denied the applications of African Americans for home purchase loans 2.6 times more frequently than those of whites.

Citigroup’s rate spread disparity for Hispanics was even worse: for home purchase loans, Hispanic borrowers are 6.48 more than six times more likely to receive a rate spread loan from Citigroup than are non-Hispanic white borrowers.

Citigroup has been providing pre-data “spin” to numerous reporters, complete with a talking points update labeled “not intended for public use or dissemination.” ICP’s sourcing for this is from reporters, one of whom told ICP, “They must really have something to hide, to be spinning so hard.” There’s probably more; ICP’s analysis continues. The above-identified disparate treatment by Citigroup of people of color seeking to own their homes is decidedly more pronounced, and more troubling, than for example National City Corporation’s two-to-one disparity reported in the Wall Street Journal of March 30, 2005. National City apparently presented its data in the light most favorable to it, leading to the summary conclusion that African Americans are 2.21 times more likely to receive rate spread loans than whites at National City, and Hispanics 1.26 more likely. See, “Blacks Are Found to Pay High Rates for Home Loans,” WSJ of 3/30/05, D2.

National City’s over two-to-one disparities are troubling -- but they cast Citigroup’s four-to-one disparity for African Americans, and over six-to-one disparity for Hispanics seeking home purchase loans in starker contrast. The nation’s largest bank is also its most disparate, when it come to targeting people of color with higher-cost home purchase loans. On this and the other Citigroup abuses / scandals, watch this space.

Update of March 28, 2005: While the Federal Reserve has put its unique cap on significant expansion by Citigroup, it has yet to take other appropriate actions, not only on CitiFinancial’s ongoing predatory lending, but also on retaliation and systems breakdown elsewhere in the bank. First a predatory lending sample, then a follow-up on our whistleblower’s report from two weeks ago.

Subj: citifinanial

Date: 3/21/2005 8:40:57 PM Eastern Standard Time

From: [ ]

To: CitiWatch [at] innercitypress.org

My mother in law just found out today, by reading the local paper, mind you, that her house and land are to be auctioned off two weeks from now at a public auction. CitiFinancial was her lien holder. She has been paying them thousands of dollars over her min. payment and has receipts. She was never served. Never notified of even being in default. She never would have known what was going on if my brother-in-law didn't read the paper. Has anyone else had their house auctioned off by CitiFinancial without ever getting any kind of notice? Does this sort of thing happen often with them? What can be done?

Ask, among others, the Federal Reserve, which has fined CitiFinancial $70 million for predatory lending, but still needs to follow-through. Speaking of following through (on our whistleblower report of two weeks ago), among other other missives this came in this week:

Subj: Citigroup Audit

Date: 3/23/2005 11:07:22 AM Eastern Standard Time

From: [ ]

To: CitiWatch [at] innercitypress.org

The group that audits Citigroup's domestic consumer operations is run by one Thomas Anderson. Thomas Anderson knew about situation with the whistleblower in your March 13 piece, and particularly about the fact that the whistleblower brought to Senior Management's attention flawed audit of Commercial Business operations.

A friend in the know (a Citibank officer who works in the Long Island City facility where Anderson has his office, and who also has a contact in Audit) informed me that, prior to becoming head of Domestic Consumer Audit, Mr. Anderson ran other Citibank divisions, including a credit card operation. Right before his appointment to Audit, Mr. Anderson's business was undergoing an internal audit. The auditors were preparing what was reportedly an adverse report on the operations Anderson was responsible for when they received a call from "somebody". This "somebody" informed them that they might want to "rethink" what they were about to publish as they were about to get a new boss in Audit; and that boss was Anderson himself.

Another friend, a former Citigroup officer, tells me about the background of the Audit Director (under Anderson) who is responsible for auditing the business operations of the consumer group. This individual is Mr. E. Ramos. Prior to joining Audit, Mr. Ramos ran a Citibank loan portfolio in Puerto Rico. By all accounts, the portfolio "blew-up" (loan losses) and the Global Consumer Risk Officer (name available upon request) was ready to "can" Ramos. Anderson reportedly stepped-in and said he wanted to work with Ramos, and gave Ramos a job in Audit. Ramos has since elevated to a prominent position. Ramos and Anderson were in direct contact with the whistleblower in the March 13 piece. They knew that the whistleblower asked for Audit to be thoroughly investigated.

We are also informed that

“There are several SCO's (Senior Credit Officers) at Citibank who contributed to the retaliation who at still at Citibank. One, in particular, was instrumental in the Citibank purchase of EAB (Bruce Fletcher, SCO, Global Risk). A few more ‘migrated’ over to JP Morgan Chase (how's that for a boy's club?). Whistleblower can also prove to anyone willing to listen how he demonstrated to Compliance, Global Risk and HR how Audit is compromised. Whistleblower also worked on shared syndicated loan between JP Morgan and Citibank, and uncovered JP Morgan tampering with publicly traded company.”

Among Citi-now-JP Morgan (well, Dimon) connection in all this is one John Watkins. Another story-inside-Citi:

“The new thing at Citigroup: going forward, if a unit fails an internal audit, the "responsible" unit managers have to meet personally with Prince and Willumstad. So what? Willumstad, by the way, was so anxious to use the bank's money to buy good press and goodwill that he authorized a wire transfer a couple of years ago in excess of one million US dollars thinking he was contributing to [a non-profit]. Turned out the money went to some trailer in a park in California, then it was forwarded to a destination in Europe. The Feds were called and an arrest was made of a man in the trailer, but the money wasn't recovered. How does a bank, of all places, fall for such a scam? This story came straight from the lips of the Senior Manager at Corporate Headquarters assigned to "plumb" the transaction. And wasn't Willumstad (along with Magner, among others) "on watch" and repeatedly promoted while Citigroup's reputation went down the drain amid increasing scandals? So how credible is it to have such an executive sit in judgment of anybody?”

We’ll have more on this.

Update of March 21, 2005: Following last week’s ICP reporting on the Federal Reserve’s order that Citigroup should not expect any approval for “significant expansion” for the foreseeable future, there’s time to look more closely at the Senate’s second Pinochet report from the U.S. Senate, which states that its “investigation has determined that Citigroup had a substantial, years long relationship with Augusto Pinochet and his family"... Only in "response to Subcommittee requests, Citigroup has identified 63 U.S. accounts and certificates of deposit that were opened for Mr. Pinochet and his family in New York and Miami at various points in time from 1981 to 2004... It was not until July 2004, two years later, that Citigroup first alerted the OCC to its years-long relationship with the Pinochet family.” The report at page 82 deadpans that Citigroup “declined to provide any information in response to Riggs’ Section 314(b) requests. When the Subcommittee asked why, Citigroup pointed out that, at the time the requests were made, Riggs was under civil and criminal investigations raising questions about the bank’s management and operations." That's ironic -- because under that standard, no one should answer Citigroup's questions either...

In other Citi global sleaze, Citi’s former head of emerging markets Victor Menezes may face civil charges in connection with the sale of $29.8 million worth of company stock in March 2002, weeks before the company took a charge because of losses in Argentina. The SEC sent Menezes a Wells notice in August 2004, which was only reported on March 18, the day after the Fed’s Citi-First American Bank order, reported on immediately below.

Update of March 18, 2005: In the Federal Reserve Board’s order issued late on March 16 on the Citigroup - First American Bank application on which Inner City Press / Fair Finance Watch has been commenting since October 2004 -- not only on predatory lending issues, but also Citigroup’s serial crises in Japan, the European bond market, and, only yesterday, money laundering for Pinochet -- the Fed states as follows:

“Given the size, scope, and complexity of Citigroup’s global operations, successfully addressing the deficiencies in compliance risk management that have given rise to a series of adverse compliance events in recent years will require significant attention over a period of time by Citigroup’s senior management and board of directors. The Board expects that management at all levels will devote the necessary attention to implementing its plan fully and effectively and will not undertake significant expansion during the implementation period. The Board believes it important that management’s attention not be diverted from these efforts by the demands that mergers and acquisitions place on management resources.”

As reported by CBS Marketwatch's David Weidner, "The Fed challenge does not entirely come out of the blue. Inner City Press/Fair Finance Watch, a Bronx, N.Y.-based community group, opposed the First American acquisition citing Citigroup's lending practices and the scandals faced by the bank. 'Unless Citigroup actually improves its practices, rather than only its public relations as has until now been the case, this block on expansion should become permanent,' said... the group's executive director. 'The Fed should not have given Citigroup any merger approval given the scandals that are swirling around it.'"

Initial press reports entirely missed the above-quoted language from the order and merely noted the approval, and (near-meaningless) antitrust numbers. ICP/Fair Finance Watch endeavored to correct this, emphasizing the above: the Fed “expects” that Citigroup “will not undertake significant expansion” for the foreseeable future. The Fed’s inappropriate failure to address last week’s comment and Report (below on this page), and yesterday’s Pinochet report on Citigroup from the Senate, will be inquired into going forward. The Order also acknowledges disparities in Citigroup’s mortgage lending and other issues ICP raised (click here for PDF of the Fed's order) -- but the above-quoted seemed noteworthy. On this, ICP’s position: While the Fed should not have given Citigroup any merger approval given the scandals that are swirling around it -- from money laundering including for Augusto Pinochet and in Japan, to rogue bond trading and predatory lending -- ICP take note of the Fed implying that Citigroup can’t expand any more, for the foreseeable future. Unless Citigroup actually improves its practices, rather than only its public relations as has until now been the case, this block on expansion should become permanent.

The press coverage by Thursday afternoon noted the language, but quoted a slew of industry analysts trying to first minimize then generalize its import. Reuters quoted a former Fed associate general counsel that "the Fed is not saying Citigroup can't make acquisitions." Dow Jones newswires later quoted ex-Comptroller Jerry Hawke that "If Citigroup is told in the context of a small, not terribly consequential acquisition that they should steer away from more substantial mergers until they get their risk management in shape, that's a message to everybody." Of course, it might be be so "inconsequential" if you lived in a community previously served by First American Bank, now to be replaced if the Fed has its way by "Doctor Evil." DJNS noted that "the Fed's guidance to Citigroup was buried in its order approving the deal, with a number of banking experts only discovering it Thursday after reviewing what at first glance seemed like a routine bank order." But Inner City Press has learned that a Federal Reserve staffer urgently called Washington media outlets trying to reach reporters directly after 5 p.m. on Wednesday, to specifically alert them that an order, presumably important and out of the norm, was coming. So why was the language missed "at first glance"? Perhaps because Citigroup has been so embroiled in scandals, for so long, that it seems normal. It is not. On Friday the WSJ, which has generally turned a blind eye to number of Citi-scandals, including predatory lending, chimed in that "From time to time, the Fed has placed similar restrictions on other institutions, but rarely on such a large institution, in writing and in such a public form." The Citi - FAB order was public because the application was challenged; Fifth Third for example, and PNC before it, needed nods from the Fed to even consider acquisitions. But the language in this order is unique.

CBS Marketwatch quoted a professor from NYU that "Citigroup will have to open a backdoor dialogue with the Federal Reserve and receive tacit approval before pursuing a deal. 'They'll have to have assurance it's worth the bother.'" But the Fed is not allowed by pre-approve (or "tacit[ly] approv[e]") merger applications, which are subject to public comment, the Community Reinvestment Act, and other statutory factors. "Backdoor dialogue" with a rogue bank would not be appropriate. The Fed should stick to it, and also take appropriate enforcement actions against Citigroup.

Update of March 14, 2005: This week’s Citi-Watch story, recounted here and to the Federal Reserve, involves a breakdown, seemingly intentional, in Citibank’s auditing and safeguards, followed by a cover-up and retaliation against a whistleblower. Three senior credit officers were fired in April 2004. The whistleblower who brought the fraud to light (and reported it upwards in the company) was let go as well, but remains concerned about Citigroup’s ability to retaliate more broadly throughout the industry. Therefore this is as much detail as can for now be given:

The underlying loan was to business in Suffolk County, New York. The loan was initially originated by European American Bank; Citibank took over the loan along with EAB. The soon-to-be whistleblower, an individual entrusted by Citibank with teaching in the bank’s credit training program, became aware of problems with the loan. The audit department had ostensibly reviewed the loan but had done nothing. Later the loan was referred from a line lending unit to the work-out / collections department, and yet more credit was extended.

The whistleblower, having pointed out the irregularities, began suffering retaliation, and complained as high as possible, including to “Global Compliance.” Nothing was done (except to prepare the ouster of the whistleblower). The underlying borrower released financial statements suddenly showing a large loss, resulting in a December 2004 write-off by Citibank of the loan to the tune of $8,000,000. Additionally, the whistleblower showed senior management how Citigroup's computer systems are seriously compromised, demonstrated how Citigroup employees with basic systems clearance can log on and view customer deposit accounts -- consumer checking and savings accounts and balances -- as well as the accounts of fellow Citigroup employees. The individuals implicated are precisely those involved in the attempt to acquire First American Bank. Citigroup executives aware of the retaliation include Ajay Banga, and, it is reported, Marge Magner. The Federal Reserve and OCC, and others, have a duty to inquire. We’ll see. Until next time, for or with more information, contact us.

Update of March 7, 2005: CitiFinancial’s mandatory arbitration clause has been found to be “unconscionable” in North Carolina by Durham County Judge Ronald Stephens. The suit was filed in Vance County, north of Raleigh, in 2002 by CitiFinancial customers Fannie Lee Tillman of High Point and Shirley Richardson of Henderson. Their suit accuses CitiFinancial, formerly doing business as Commercial Credit Loans Inc., of excessive and improper fees. It’s important to note this case has nothing to do with Associates First Capital, but rather the subprime operation designed since 1986 by those now controlling Citigroup.

How this fits in to the 25-minute revisionist video Citigroup began screening last week for its employees is not yet clear, nor have the just-hired Howard Baker’s views on CitiFinancial’s practices beyond the U.S. been inquired into yet. On March 1 in Singapore, Marge Magner announced that Citi “will be opening 200 branches across Asia for consumer finance.” Magner said countries that would see more Citi outlets this year include India, Indonesia, Thailand and the Philippines. Unconscionability goes global... Of Howard Baker, note that the law firm he was at, Baker, Donelson, Bearman, Caldwell & Berkowitz PC, has represented CitiFinancial on predatory lending-related matters...

Update of February 28, 2005: Falling fast: France's treasury gave Citigroup a ranking of sixth out of nine financial institutions in its overall 2004 league table list, a lower ranking due to the Citi’s $16 billion “Doctor Evil” bond trade in August. The treasury's list is used to award government business and helps determine which banks are awarded bond syndication and derivatives trading mandates or lead roles in state privatizations. The treasury said that Citi's ranking would have been higher were it not for the August trade. So there are some ramifications - but with a trillion-dollar bank, internally they figure they make more from rogue behavior than they lose. For now, at least.

From inside:

Subj: Re: Citigroup Watch -- An Update From an Employee

Date: 2/23/2005 7:51:31 AM Eastern Standard Time

From: [ ]

To: CitiWatch [at] innercitypress.org

...note the very sudden and unexpected Citigroup's axing of all their Technical Research Department (last week). Oddly enough it was only their technical research led by Louise Yamada (widely renowned and acclaimed) that was worth any salt at all. Many of the retail Smith Barney Portfolio Manager consultants that run portfolios themselves (similar to mutual fund managers) followed Louise's group very closely and are very displeased. With the understanding of how much revenues these brokers bring in, I am curious to see what the shakedown will be -- who leaves? In any case, Citigroup is basically reiterating the fact that investment banking alone paid for research in the past.


Update of February 21, 2005: Last week’s Citigroup ethics news -- don’t laugh! -- was the announcement that “Citigroup staff will be able to dial in to an ‘ethics hotline’ and give anonymous feedback on managers as part of a plan aimed at preventing further regulatory and legal problems.” Sounds great -- except that CitiFinancial, for example, has long had an Ethics Hotline, yet whistleblowers’ calls never resulted in any reforms, and not infrequently resulted in retaliation against those who blew the whistle. Citigroup’s biggest shareholder, Saudi Prince Alwaleed bin Talal, has characterized the current scandals as “events here and there, such as the one in Japan in private banking and the bond market in Europe.” The Financial Times quotes CEO Prince that “while he is planning a further strengthening of Citigroup's compliance and audit processes the plan is not about ‘hiring cops.’ It is about making the cops ‘redundant.’” Hmm. Meanwhile, a 25-minute video entitled “The Story of Citigroup” is being prepared for (required) viewing by employees in March. If it’s anything like the video shown at least April’s shareholders’ meeting, caffeine or Clockwork Orange eye-wear will also be required...


Update of February 14, 2005: Financial literacy in the Kremlin: last week, Russian president Putin met Sandy Weill. During the meeting, Weill suggested that Putin open a credit card account with Citigroup. Putin responded: "I need to see your interest rates.” Good question.... From Business Week’s Feb. 14 “Scrambling to Save Face” article: “consumer finance -- the business of extending unsecured loans at double-digit interest rates. Citi has been a player in Japanese consumer finance since 2000, when it took over a trio of brands with 1,000 consumer loan outlets nationwide.” Double digit interest rates... In layoff news, Citi’s Smith Barney unit fired at least six stock analysts last week. Dow Jones named names: Craig Berger, semiconductor equipment; Richard Davenport, supply-chain analysis; Joanne Fairechio, gas utilities; Richard Holohan, packaging and containers; Daniel McKenzie, airlines; and Jill Krutick, toy and leisure (gonna have a lot of that, now, one wag said). These layoffs are in addition to cuts at Citigroup's corporate and investment bank that are expected to affect about 1,000 of that unit's 48,000 employees. Meanwhile Citigroup’s application to buy First American Bank in Texas, on which ICP commented on October 25, continues to pend at the Federal Reserve Board...


Update of February 7, 2005: The corporate business press pegged the announced sale of Citigroup’s Travelers Insurance to Met Life as the death-knell of the ideas of conglomerates and cross-selling. Travelers bought Citicorp, putting the Weill - Prince - Willumstad - Magner axis in the driver’s seat, from which they’ve now sold off insurance. But Citi’s press release said, “In connection with the transaction, Citigroup and MetLife have entered into ten-year agreements under which MetLife will greatly expand its distribution by making products available through certain Citigroup distribution channels, subject to appropriate suitability and other standards. These channels include Smith Barney, Citibank branches, and Primerica in the U.S., as well as a number of international businesses.” Interestingly, although it sells insurance, including credit insurance, CitiFinancial was not listed... Investigations of Citigroup’s predatory bond trading -- which Citi’s employees called their “Doctor Evil” plan -- last week spread from Germany to Italy, Spain and Portugal. The European Central Bank president urges a "thorough and deep" investigation. Citigroup’s application to buy First American of Texas, on which ICP filed opposition in October, is still pending. It’s hard to imagine Citigroup, embroiled in scandal, being a buyer not a seller. Stock analysts said the cash could be used to buy a credit card unit, or to “accelerate its plans to open 300 to 500 consumer finance offices.” Yes, that’s CitiFinancial...

Update of January 31, 2005: Ah, Citigroup. On January 24, the Germany regulatory agency Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) made a referral to criminal prosecutors of Citigroup’s bond manipulation of August 2004. Citigroup Global Markets sold some $15.7 billion US in European government bonds on 13 different trading platforms in 11 different markets, causing prices to fall across the board; Citi then bought back roughly $5.3 billion in bonds at lower prices an hour later. Citigroup has been claiming this is a much smaller scandal than its loose anti-money laundering practices in Japan; we’ll see. On January 25, ICP filed supplemental comments with the Federal Reserve opposing Citigroup’s pending application to buy First America Bank in Texas...

Update of January 24, 2005: Going global, including with subprime: on the Jan. 20 earnings call, Chuck Prince spoke of Citigroup’s focus on international growth as its income generated outside the U.S. rose 43 percent in 2004. "Mexico is up. Asia is way up," Prince gloated. It was not clear to some how the shut-down in Japan impacts these numbers; then it was clarified: the latest quarter's earnings reflect a $244 million after-tax charge to close the Japan Private Bank and a $131 million after-tax reserve taken in relation to the expected resolution of a But investigation of transfer-agent matters. But the charges were offset when Citigroup released cash from its loan-loss reserve and an insurance recovery against WorldCom and Enron. Great... "We increased our stake in Brazil just recently,” Prince continued. "I think that we are going to do very, very well in the future.” In Japan consumer finance, building on The Associates’ predatory inroads there, “CitiFinancial Japan KK” now plans to increase its fleet of automatic consumer loan application machines about 40 per cent this year. The Citi subprime unit operates such consumer finance companies as AIC Corp. and DIC Finance Corp in Japan... More corporate Citi-watchers wondered why on January 21, Citigroup's Fixed Income Investor Presentation was cancelled and postponed to February 11. Some suggested that the cancellation was in honor of the just-deceased Walter Wriston (who one wag quipped is now trying to find a loophole into the afterlife); others saw darker motives.... Those who can’t waiting until Feb. 11 can catch COO Bob Willumstad at his own firm’s (Smith Barney’s) Financial Services Conference on January 26 at 12:45 PM -- and maybe ask him about these Japan high-cost loan machines...

Update of January 18, 2005: From the mail bag, responding to last week’s squib:

Subj: Wombold
Date: 1/10/2005 2:06:26 AM Eastern Standard Time
From: [14 year Manager]
To: CitiWatch [at] innercitypress.org
I was intrigued by reading your follow up to the Wombold case. As a former CitiFinancial Manager, I know how money grubbing these individuals are/were. The objective at Citi continues to be to make the maximum profit possible on each customer without regard for "doing the right thing" (their motto by the way) At Citi, doing the right thing is whatever is best for the company's bottom line. By the way, I would love to hear their response to the heavy prepayment penalties CitiFinancial imposes on their real estate loans. Customers also can't refinance with CitiFinancial without taking an additional cash advance of $10,000 or more in many cases. This includes a refinance for lower rate purposes only. In other words, the only way to get a lower rate mortgage is to wait until your prepayment penalty expires or by taking a BIGGER loan out. They never waive the prepayment penalty, EVEN IF THE CUSTOMER SELLS THEIR HOME... Color me glad I left after 14 years...

Until next time, for or with more information, contact us.

Update of January 10, 2005: Citi-watchers may want to read the just-released Montana Supreme Court decision, in Wombold v. CitiFinancial / Associates, affirming among other things that Associates / CitiFinancial “violated the Montana Consumer Loan Act.” Further afield, Citigroup is being fined for consumer fraud in India:

“The Visakhapatnam District Consumer Forum has directed the Citibank not to make illegal demand and pay Rs.10,000 as compensation to a consumer for deficiency in service. An agent of the foreign bank wooed a consumer, A.B.V.K. Ramalingeswara Rao of Ukkunagaram into taking a credit card, which allows drawal of emergency cash from any of the ATMs. For this the consumer needs a pin number, which the bank promised to send shortly. Even before the consumer received the pin number, the agent informed the consumer that the latter had withdrawn Rs.5,000 on his credit card and had to repay Rs.5,146.60 as outstanding dues. Stunned by this, the consumer explained he was yet to get the pin number. The consumer later received the pin number but without opening the sealed envelope, he went to the branch office of the bank in the city. From there, he was asked to contact the Citibank's Chennai office. The latter, to his surprise, alleged that he had used the Indian Oil Citibank card which he held for the last two years and which could also be used to draw the money. However, the consumer was not aware of it until he was told about it. Also, the number of Indian Oil card, which he was said to have allegedly used and the card, which he possessed were different. When his repeated pleas went in vain and he was harassed by the bank's agents, the consumer filed a complaint (Consumer Dispute No: 696/2004) against the Citibank.”

More here, from India’s National Newspaper, “Citibank asked to pay compensation." From Montana to India...

Note of January 3, 2005: The Federal Reserve, still considering Citigroup’s attempt to buy in Texas, should read Bloomberg News’ most recent expose of Citigroup’s lack of anti-money laundering controls), and take action on them...

Update of December 27, 2004: CitiFinancial is now offering high-cost loans through pawn shops in Poland. The Polish News Bulletin of December 20 reported that “Kantor Polski (KP), a new financial services provider was launched today... The idea of forming KP was put forward by The Polish Currency Exchange and Pawnshop Association (SKiLP). Apart from the normal services currency exchanges supply, KP will offer clients CitiFinancial (financed by Bank Handlowy) consumption and cash credits.” Great... Even during this holiday week, we've heard from people in-the-know that Citibank's Private Bank in Japan was hardly unique in the Citigroup family -- but more on that in 2005.

Update of December 20, 2004: Citigroup’s fast-and-loose practices, well beyond CitiFinancial’s insurance-sales and other predatory high jinks, begin to come home to roost: an account at Citigroup’s recently-sold subsidiary in Saudi Arabia will be charged with being used to collect and pass funds to organizations which then used the money to help suicide bombers and their families. It’s the Account 98 scandal. According to London’s Sunday Times, “Leah Johnson of Citigroup, its parent company, said: ‘Any assertion that Citigroup supports terrorism in any way is an outrage.’” But having so demonstrably loose a know-your-customer regime, for example in Japan (regulators’ order against Citigroup is available via this link), is the real outrage...

Update of December 13, 2004: Citigroup’s subprime unit, CitiFinancial, repeatedly charged with predatory lending including even by the Federal Reserve, is now slated to dramatically expand, in the U.S. and beyond. Last week Citigroup announced that CitiFinancial will be opening 400 new branches in North America, will be entering Russia (as it has Australia, Indonesia and Finland, in 2004), and, in Japan, will set up a 100 automatic loan application machines and branch offices in 2005 -- under the trade name CFJ KK. This last was bragged about by Dave Lowman of CitiFinancial International, to the Nikkei Financial Daily. In New York, Citi’s Kevin Kessinger told an investors’ conference that even before the 400 new slated branches, CitiFinancial has 2,273 branches in the United States, Canada and Puerto Rico; in Mexico, going under the name Credito Familiar, it has 199 branches.

In continuing fall-out from Sandy Weill, the master of CitiFinancial and Commercial Credit before it, last week Southern District of NY Judge Gerard Lynch allowed the case against Citigroup for the AT&T (Sandy-Grubman-Armstrong) ratings games to go forward, In Re Salomon Analyst AT&T Litigation, 02 Civ. 6801. For those who forget, Weill was told by AT&T chair [and Citigroup board member] Armstrong that Grubman's negative ratings of AT&T were hurting Salomon's bid for AT&T's investment banking business. [Salomon Brothers has since been renamed Citigroup Capital Markets.] Weill allegedly urged Grubman to take a "fresh look" at AT&T, and Grubman did that and changed his rating on the stock...

ICP has put directly in front of the Federal Reserve, in the form of a supplemental comment on Citigroup’s pending application to acquire First American in Texas, Citigroup’s meritless lying to Bloomberg News (see last week’s Report), and the total or selective breakdown of Know Your Customer at Citigroup. We’ll see...

Update of December 6, 2004: After Citigroup’s denials, Bloomberg News of Nov. 30 nailed it down: “Yasser Arafat controlled a company that Palestinian Authority documents show held a $ 6.8 million account at Citigroup Inc., Palestinian legislators Hanan Ashrawi and Azmi Shuaibi have confirmed. The company, Palestine Commercial Services Co. (PCSC), held the account until it was transferred to the Palestine Investment Fund, according to the fund's 2003 annual report. The fund was created in 2002 to consolidate the PA's assets and bring them under the control of its Finance Ministry. Palestine Commercial Services ‘was a company that was founded by Arafat,’ Ashrawi, 58, a former member of Arafat's cabinet, said in a telephone interview from Ramallah. ‘He had the authority.’ Disclosure of an account linked to Arafat is an embarrassment for Citigroup.. Charles Prince and Michael Schlein, a senior vice president who oversees public relations and ethics programs, called Bloomberg last week to demand a previous story about the account be retracted. They refused to be interviewed by a Bloomberg reporter. ‘Citigroup does not have any accounts for Yasser Arafat - and we never have,’ company spokeswoman Shannon Bell said in a statement issued November 19... The PCSC account was held at Citigroup's private bank, Andreas Martin, a Standard & Poor's analyst who helped value the assets for the Palestine Investment Fund, said in a November 16 interview... Palestinian and Israeli officials agree Arafat controlled PCSC, the company that held the Citigroup account.” But Citigroup denied this...

Update of November 29, 2004: CitiCapital, which last week proposed to sell its (capitalized) Transportation Finance Business based in Dallas and Toronto to GE Commercial Finance for approximately $4.4 billion, is also a lender to, among others, private prison companies, and providers of privatized military services. As simply one example, as recently as August 2004, CitiCapital extended credit to, and filled a UCC lien against, Wackenhut, which runs private prisons including Australia’s notorious Woomera asylum-seekers’ processing center. Citigroup's lack of standards runs deep...

A follow-up to last week’s report. An inside-Citibank reader whom we respected has protested that Robert Annibale is one of the good guys. To clarify, that may or may not be: our point is that an individual carrying the water of, and seeking to get good will for, Citigroup should be prepared to answer obvious questions about the company. Even staid Business Week, of Nov. 29, reporting on Citigroup’s “support to micro lenders in developing countries,” posited the motive: “As Citi positions itself to be the banker of choice globally, it is already building a name for itself in the developing world. In addition, CEO Charles O. Prince is trying to clean up Citi's image after highly publicized regulatory problems this year in London, Tokyo, and elsewhere. Philanthropy plays a starring role, says Citigroup Foundation President Charles V. ‘Chip' Raymond: `It's critical to helping us.'” [Why BW added “Chip” but not “Chuck,” we don’t know.] For more poignant example, the question asked of Annibale: how can Citigroup on the one hand claim to be benevolently helping micro-credit to the poor, while being charged repeatedly with predatory lending to the poor? ICP posed a similar question to, for example, Robert Rubin on WNYC Radio in New York, where it also went unanswered. (See below, Archives, and note in last week’s WSJ Rubin’s inside-play for Sears/K-Mart fees for Citi: very classy, like the calls he made for Enron). Anyway, these are fair and obvious questions, which will continue... And a clarification about Citigroup’s poisoning of micro-credit: last week, Mark Malloch Brown, the United Nations Development Program (UNDP) Administrator, said that Citigroup is “now mainstreaming microfinance into its banking activities around the world.” Yeah -- it’s called CitiFinancial, and high-cost micro-insurance, and it’s not pretty. United Nations beware!

Update of November 22, 2004: Citigroup can use, abuse and poison almost anything. On November 16, 2004 at Columbia University in New York City, the present and future of microcredit was discussed by a five-person panel which included two representatives from the U.N., and two individuals affiliated with Citigroup. Even beyond these two Citigroupers, the U.N. representatives referred repeatedly to Citigroup vice chairman (and ex-IMF official) Stanley Fisher. Thus it appears that, at least for the U.N. and the self-defined elite of the microcredit industry, the world’s largest bank is the leader of banking for the poor.

There’s a problem, however. Citigroup has been charged with predatory lending to the poor, not only by consumer advocates, but by the Federal Reserve Board, the Federal Trade Commission, and other governmental agencies. Citigroup’s seeming “capture” of microcredit as-industry does not bode well.

During the November 16 discussion, Citigroup’s Robert Annibale stated that through time, Citigroup might be the originator or “booker” of the retail loans made by microfinance institutions. He said that Citigroup might sell “micro-insurance” through the microfinance industry’s distributions network, which “digs deeper,” he said, into the target population.

Mr. Annibale was asked, by Inner City Press/Fair Finance Watch, to address the incongruity between the activities of CitiFinancial and its predecessors, which have led to governmental charges of predatory lending, and Citigroup’s claimed role in micro-finance. His response alluded to codes of conduct and legislative change in various countries, but did not address Citigroup’s predatory lending settlements directly. If anything, letting Citigroup have a hand in designing the legislative proposals put forth by the microcredit industry might explain this industry’s elite’s lobbying against usury caps and other potential consumer protection laws.

A representative from Women’s World Banking, Nancy Barry, did distinguish between loans for small business and loans for television sets and the like (and stated that the latter makes up 90% of the purported micro-finance loans in South Africa). In a discussion following the panel, one wag speculated that Citigroup might assist microfinance institutions to make loans to prop up Citi’s own “television” and other consumer finance lending. While microfinance certainly has promise for those in need, its capture by the likes of Citigroup is a troubling development...

Citi classic -- from Charles O. Prince III, to Fortune Magazine interviewer (and Buffett ghost-writer) Carol Loomis: “We used to have a model where we'd wait for Sandy to shoot a moose and drag it home, and we'd all feed on it. That model doesn't work anymore because the family's too big. We have to grow our own food.” Feeding on the moose -- like Associates First Capital, and Commercial Credit / CitiFinancial before that -- that Sandy dragged home...

Update of November 15, 2004: From inside CitiFinancial comes this warning: customers will beginning to be solicited to refinance / rewrite their loans at so-called “Customer Appreciation Days,” with fees added in, to put the payment dates back into 2005. Some appreciation...

Update of November 8, 2004: From Citigroup’s November 4 response to ICP’s submission of Uniform Commercial Code filings by Citi and its proposed acquisition, First American Bank:

“ICP attaches certain records of [UCC] filings related to several Citigroup and FAB clients... As a practice, Citigroup and its bank subsidiaries do no engage in the business of funding check cashing or payday lending businesses. Citigroup’s account opening procedures and credit policies generally prohibit the opening of new accounts for businesses identified as check cashing operations. Citigroup does have a single active relationship with an armored car company that also includes a checking account to an affiliate in the check cashing business. This account predates the Citigroup procedures for check cashers, and Citigroup has been in the process of winding down the relationship pursuant to a gradual exit strategy.

“In addition, on occasion check cashing businesses have become customers in connection with Citigroup’s acquisition of other financial institutions. In such cases, Citigroup undertakes a post-acquisition review of these relationships and takes action to close or limit them, when appropriate. Citigroup makes changes to conform with its business practices as expeditiously as commercially reasonable, yet in a manner that does not unduly disrupt the operations of an existing client... The UCC filings relating to Citigroup that were attached to ICP’s comment letter are dated 2001 and 2002. Citigroup has no active accounts with, and no outstanding loans to, any of the parties named in those UCC filings. Although some of these inactive accounts may still appear on Citigroup’s account system and Citigroup may not have revoked the UCC filings, Citigroup has not had a business relationship with any of these companies for at least two years.

“With respect to the UCC filings related to FAB that were attached to the comment letter, Citigroup has learned that they relate to pawnshops, not check cashing or payday lending operations.”

Citigroup’s response is noticeably silent on when this “policy” was adopted. Citigroup states that it “has not had a business relationship with any of these companies for at least two years.” But, simply as one example, there is a February 20, 2003 UCC amendment, on “Debtors: MONTGOMERY CHECK CASHING CORP., Secured Parties: CITIBANK, N. A., AMENDMENT, 2/20/2003, 5:00PM, 1675531, 1675531, NJUCC.” February 2003 is, obviously, within two years of the date of Citigroup’s response.

Citigroup did not respond to ICP’s presentation into the record of, for example, the relationships between Citigroup and Dollar Financial; questions must be answered concerning the application of these claimed policies to all of Citigroup’s subsidiaries, including for example its investment bank(s) and CitiCapital, which it has owned since acquiring Texas-based Associates First Capital Corporation. (ICP has submitted exhibits to these effects, and also touching on Citigroup’s proposed acquisition of much of ABN AMRO's custody, securities clearing, and fund services business, particularly in Indonesia, Russia and Holland...

Where-are-they-now update: a reader has responded to our “extra credit” question regarding the whereabouts of ex-Skadden Arps Citi-defender Stacie E. McGinn. According to this reader -- who would know, and whose contact we appreciated -- Ms. McGinn is now in Charlotte, NC, in the consumer financial services legal division of Bank of America...

Update of November 1, 2004: ah, Citigroup, hit by record NASD fines, just after Japan's Financial Services Agency (FSA) cited a long list of problems at Citi's Japanese private banking unit, including failure to prevent possible money laundering and making loans to clients engaged in various forms of wrongdoing, including tax evasion and stock manipulation. The regulator also claimed bankers misled customers about investment risk and overcharged for some financial products. Regulators said Citibank also went beyond the scope of its banking license by brokering real estate and art deals for its rich clients - activities not allowed under Japanese banking laws.

The NASD specifics: Citigroup distributed misleading sales literature for hedge funds. The bank failed to properly describe the risk of investing in them while presenting rosy scenarios for likely returns, NASD said, adding that the sales documents also exaggerated the performance of the schemes.

Update of October 25, 2004: In its second timely filing opposing Citigroup's proposal to buy First American Bank in Texas, ICP has documented the two's funding of pawnshops and check cashiers, including College Station Pawn & Cash Station Jewelry and Loan, Q-Pawn, Inc., Decker Prairie Pawn, Inc., Zerega Check Cashing Corp., Montgomery Check Cashing Corp. of 403 East Third Street, Mount Vernon, NY; Castle Check Cashing Corp., continued in 2002; City Check Cashing of Jersey City, NJ; and Rite Check Cashing Inc. and G&R Check Cashing Corp. of New York. And what, after delay, will Citigroup say?

Update of October 18, 2004: On October 14, ICP/Fair Finance Watch received a letter from Citigroup’s outside law firm, Skadden Arps. The letter recounted:

“Earlier this week, Citigroup’s offices at 425 Park Avenue suffered a fire. Mail to that address has been redirected, and consequently, Mr. Howard has yet to receive the original [ICP] letter. The October 6th Letter was carbon copied to Stacie E. McGinn who is no longer with our law firm. The letter was received by our law firm on October 12 and redirected to my attention yesterday. I have forwarded a copy of the letter to Mr. Howard. In the October 6th Letter, the FRBNY indicates that if Citigroup intends to respond to ICP’s comments, it should do so within eight business days of the date of the letter... Citigroup intends to respond to ICP’s comments and hereby requests an extension of time to respond until October 25, 2004”--

Which just happens to be the day on which the comment period is slated to expire... ICP has responded. [And see above.]

Update of October 11, 2004: Federal Reserve chairman Greenspan, in meeting on October 1 with select members of the Financial Roundtable, was face-to-face with Citigroup’s Bob Willumstad. ICP’s timely comments to the Fed on Citis pending application to buy First American Bank include Willumstad’s response to ICP’s questions about CitiFinancial’s standards overseas. ICP has asked the Fed to nail this question down. Citigroup, meanwhile, has yet to respond in any way to ICP’s comments. Citigroup likes to ignore the Fed’s rules about responding in eight days, and only make a submission after the comment period closes [And see October 18 Update, above].

Update of October 4, 2004: On October 4, ICP/Fair Finance Watch filed two 21-page comments opposing Citigroup’s applications to acquire First American Bank, with the Federal Reserve and OCC. Click here to view.

Update of September 27, 2004: From Business Week of Sept. 24: “By Prince's own measure, he is failing. The bank is harvesting negative headlines galore and has regulators on its back on three continents. On Aug. 18, the British Financial Services Authority launched a formal investigation into the London bond coup. And Citi -- though it won't say who authorized the trades -- apologized for what had happened and promised not to repeat the behavior.” Haven’t we heard that before?

This week, we’d be remiss not to note the publication of a much-needed, straight-forward book on predatory lending, Rich Lord’s “American Nightmare.” In nine chapters and an appendix of questions that consumers should ask lenders, Lord surveys the field, from Pittsburgh to Wall Street, from brokers to services to lobbyists and beyond. Along the way he notes the work of non-profits in the trenches. From the Pittsburgh Community Reinvestment Group to Self-Help, from ACORN to Sunflower Community Action of Wichita, Lord profiles organizations and their campaigns. (A cynic might note that this is not a bad beginning of a marketing strategy, either.) One critique -- because there must be at least one, right? -- is that punches get pulled. Lord shows, for example, that the two settlements of HSBC’s Household have not even slowed the company’s foreclosure rate. Still the second settler, which last week praised CitiFinancial as well, is immune from Lord’s otherwise-trenchant analysis. (The same cynic might question whether this is a matter of politeness, or a marketing-related desire not to step on the toes of the field’s elephant.) But that’s quibbling! The book describes in novelistic detail the lives, both financial and emotional, of the people known as subprime. Here are two CitiFinancial victims:

“Mike and Ellen Papuga had tried for years to make a baby, but it just wasn’t happening... Then, in 1997, the apartment they were living in caught fire, and many of their belongings went up in smoke... The fire led to some financial and credit problems... So they went to CitiFinancial... The transaction reflected one of Sandy Weill’s mantras: cross-selling... In 2003, a miracle occurred: As her 40th birthday approached, Ellen became pregnant... They wondered why nobody at CitiFinancial had through to remind them of the [insurance] policy... Even though Triton is a Citigroup subsidiary, the collection staff claimed they had no information about the insurance policy.”

And so it goes... Two points of full disclosure: ICP is covered in the book, including the questioning of Citigroup’s Robert Rubin, pages 106-7, and ongoing campaign against Citi’s and HSBC’s export of predatory lending, pages 59-62. Also, Lord reviewed Predatory Bender (click here for the review). Since he noted that book’s first edition’s typos, here’s a petty tit-for-tat: the executive director of CRA-NC is not Jeff but Peter. Don’t rob Peter to pay... Jeff? Nor, we can’t resist, last week’s praiser of CitiFinancial. This is a book that Citi-watchers will want to read...

Last week, ICP/FFW filed comments based on the Senate Riggs Bank report’s findings regarding HSBC and Santander, click here for article in the Glasgow Herald, reporting that “A US-based human rights group has written to Britain's financial regulator urging it to halt Santander's £8bn acquisition of Abbey National until it fully investigates its part in the alleged "violation" of US money laundering laws.Inner City Press and its Fair Finance Watch, based in New York, has drawn the Financial Services Authority's attention to the US Senate's recent report on Riggs Bank's alleged money laundering for former Chilean dictator Augusto Pinochet, and the dictator of Equatorial Guinea;” click here for more.

Update of September 21, 2004, 5:55 p.m. -- It has just been confirmed that in the mortgage program Citigroup announced on Sept. 20, $3000 in closing cost assistance will be given, and no social security numbers will be required. While Inner City Press had heard this, on Sept. 21 it contacted the Citigroup spokesman listed on the press release; he cordially looked into it, and just after close of business confirmed the two above-recited elements of the program. Neither was disclosed in the press release. While the reasons for omission might seem obvious, and while one might well agree with at least one of the reasons (ICP’s on record advocating for immigrants’ rights), the silence is strange behavior for the world’s largest bank, disseminating paid praise on a day it was otherwise slammed. In a sense, we ask these questions and report the results at the behest of our readers. A sample, from the mailbag:

Subj: ACORN and Citi?
Date: 9/21/2004 10:23:16 AM Eastern Standard Time
From: [Name withheld]
To: info [at] innercitypress.org


I'm very shocked to have just learned that Acorn joined with Citibank. Is Acorn selling out? Did Citibank really clean up its act? I'm confused by all this. Have you tried contacting Acorn to see what they have to say about all this? I guess you will post any new info on the site.

The answer to the second question, "did Citibank really clean up its act," is no, contrary tothe press releases. No overall dollar value for the partnership was given, by either party; whether the “best practices” paraded in the release apply to CitiFinancial in, for example, Puerto Rico (which Citi recently bought a subprime mortgage lender named “Easy Money,” see Report of Sept. 6, below), or Ireland, where CitiFinancial has been found to have the highest interest rates, see penultimate report, remains to be seen. One wag noted the ironic contrast between the press released-program and not only CitiFinancial's practices in the U.S., but with CitiFinancial being an entirely unreformed predatory lender in the countries of orgin of immigrants to the U.S.. As the ICP reader quoted above put it, it's confusing. One certainty among others: when a trillion dollar bank is essentially making and dictating public policy (as it did with the Gramm-Leach-Bliley Act), and buying allies for that purpose (natch), watch out, scrutiny is needed. These additional questions, ICP’s been told, will be answered. Meanwhile, Citi on Sept. 20 submitted its application for its proposed Texas acquisition to the Office of the Comptroller of the Currency. Developing... Until next time, for or with more information, contact us.

Update of Sept. 20, 2004, 1 p.m. -- Well, Citigroup at 7 a.m. on September 20 put out its press release. Citigroup's paid partner does not even mention that Citigroup and its subprime CitiFinancial continue with mandatory arbitration, which the group has diagnosed as a predatory practice. So: a partnership with a predator? Citigroup's press contact on the release is Rob Julavits, until recently a reporter (on Citigroup) at the American Banker newspaper... At 1 p.m. on September 20, Mr. Julavits was not answering his phone: he was en route to Citigroup's "event" / announcement, on the 14th floor of Citigroup Center. Subsequently, three questions have been asked, the answers to which will be reported in this space. Until then, for or with more information, contact us.

Update of September 20, 2004: Regarding today’s Orwellian announcement, see ICP’s Reports of Sept. 16 and 17, below -- and note that Citi’s partner today has criticized other lenders for using mandatory arbitration, in testimony to the House (“Lenders should not be curtailing borrowers’ access to appropriate legal remedies when the lender breaks the law”) and Senate, in its recent press release about a lawsuit; its putative head has said, in a prepared and still-up statement that "these mandatory arbitration clauses are meant to allow the company to escape the consequences of making illegal and abusive loans.” Yeah, exactly -- including as to CitiFinancial...

Citi’s sleaze is also overseas. The Irish Independent of September 17 reports on a survey by the Irish Financial Services Regulatory Authority, comparing the costs of borrowing over different terms and is based on the main lenders in the Irish market. “The same loan at a variable rate of interest will cost Euro 2,748.60 at the Ulster Bank but only Euro 2,338.40 at Permanent TSB. But it was CitiFinancial, a UK lender operating at the higher risk end of the borrowing market, that charged the highest rates. On a Euro 10,000 variable rate five-year loan, CitiFinancial charged a whopping Euro 6,471 over the life of the loan - Euro 4,420 more than the total credit charged by Tesco.”

And the sleaze, beyond subprime lending, is recognized: in Japan on September 17, financial authorities ordered Citigroup Inc. to suspend its private-banking operations, in one of the harshest penalties ever handed down against a bank in Japan. The Financial Services Agency on Friday it would revoke subsidiary Citibank N.A.'s effective license to serve high net-worth customers. In a strongly worded statement, the financial regulatory body criticized the unit for not having properly functioning internal controls, adding that it found a long list of "serious violations of laws and regulations" and "extremely inappropriate transactions." Just like CitiFinancial!

Update of September 17, 2004: A bit more detail has emerged. Alongside the below-referenced endorsement of CitiFinancial’s claimed reforms (limited, it appears, only to CitiFinancial’s mortgage lending, and decidedly silent on Citigroup’s planned continued use of mandatory arbitration), Citigroup on September 20 will be announcing a mortgage lending program that will be related to immigration issues. It might be fine product; it does not change or mitigate the harm that CitiFinancial continues to cause in low-income communities of color, including those with significant immigrant populations... For or with more information, contact us.

Interim update of September 16, 2004: We'd be remiss not to report the rumblings that Citigroup intends to announce, on Monday September 20, its praise by (or purchasing of, as some wags put it) a nationwide organization, which has already delivered such praise to HSBC's Household (in a process that began in conjunction with HSBC's purchase of both Household and its critics). Even some of the settlement-professional who praised and/or participated in the Household settlement are expressing dismay at the slated announcement regarding Citigroup.Developing...

Update of September 13, 2004: Citigroup’s compliance problems are global: last week the head of Japan's Financial Services Agency Hirofumi Gomi acknowledged the media reports saying the financial watchdog is poised to (lightly) punish the Japanese branch of Citibank for alleged crimes: that is, for selling products that are banned under Japan's Banking Law. The agency may order Citibank to suspend part of its operations in Japan, including private banking services for wealthy customers, Kyodo News reported. "What I can say now is that we inspected Citibank between November and April and issued results" to the bank in late May, Gomi said. The FSA is likely to decide on specific administration measures against the bank by the end of September. In June, the agency ordered Citibank's Japanese branch to improve control over customer information after revelations it lost backup data on transactions. For or with more information, contact us.

Update of September 6, 2004: What's in a name? Citigroup's new purchase on Puerto Rico, a subprime lender, is named "Easy Money." It comes with six offices, to add to the six branches from which CitiFinancial is already robbing people on La Isla del Encanto; CitiFinancial plans to open three more this year, and ten in 2005... Sin verguenza is the word: shameless.

Update of August 30, 2004: at Citigroup, there's no wall between banking and predatory lending. And the whole team gets involved. For example, on Citi's Texas deal last week, the press release quote from the Bob Willumstad; Marge Magner spun the FT, and another a main spokesman was Ajay Banga, previous spinner for CitiFinancial (now that job's gone to an just-retired reporter, Rob Julavits, see below). Banga, who admitted that CitiFinancial sold insurance on fishing rods on which it never foreclosed, told the American Banker that "We don't have to be in every state, but we do have to be in the more critical ones." The deal is scheduled to be completed in the first quarter, after which Citi would build more branches in Texas or seek further acquisitions, Banga told the American Banker -- which misreported that "Dallas is the headquarters of the consumer finance business, CitiFinancial." Uh, that'd be Baltimore, to which Sandy, Bob W, Marge M. and even Jaime went in the Eighties, and cut a Faustian deal... Thought CitiFinancial did announce some 116 layoffs in Hanover, Maryland last week, while keeping its skeezy subsidiary Chesapeake Appraisal and Settlement Services in Columbia, MD... The spokesman for this layoff announcement? Ex-American Banker reporter Robert Julavits. "It is an effort to maximize efficiencies and leverage our resources in technology," said spokesman Robert Julavits. There ought to be anti-revolving door provisions between industry and the supposedly independent press, as well.. An anecdote: when CitiFinancial was acquiring Washington Mutual Finance Group, but leaving behind its Mississippi offices, ICP explained the scam to Mr. Julavits, and to reporters in Seattle. The latter covered the scam, but Robby the J didn't. And now...

Stray Citi squib of the week: this article from Savannah, CitiFinancial's shenanigans in bankruptcy court...

Update of August 23, 2004: Citi last week bought servicing of $10 billion of Hibernia’s mortgages; eighty jobs will be eliminated.... Last week regulators throughout Europe announced an investigation of Citigroup’s bond trading there... Not to worry: Citigroup is a top-ten funder of both Republican and Democrats: fundamentally amoral, or meta-political, desiring access whoever wins. Seen at the DNC in Boston was Citigroup’s Robert Rubin, strategically placed in the quasi-royal box to ensure "chatter" (to use a word that’s that lately been shifted from Al Qaeda to demonstrators, see below) that Rubin might, just might, become the chairman of the Federal Reserve if the Democrats win. So either way, bankers will rule. Surprised? We aren’t. We’re just outraged. Call it the (real) Predators’ Ball...

Update of August 16, 2004: On August 10, another boot dropped: Citigroup announced that among the result of its acquisition of Sears' credit cards will be the laying-off of 450 employees, and the closure of a credit customer service center in Iowa. This follows other closures from Ohio to Idaho, and 105 earlier Iowa lay-offs by Citigroup. Citi spokeswoman Janis Tarter said, somehow with a straight face, that the purpose of these 450 lay-offs is to "maintain the highest level of service to customers." Meanwhile, last month, Sir Deryck Maughan, the chairman of Citigroup International, also talked about internal growth but acknowledged that over the next six years 20% of the company's growth abroad would come from acquisitions. The goal is to raise the international units' contribution to earnings to 50% from 37%, he said. International consumer operations are targeted to account for two-thirds of this growth. Boosting the consumer business "will require an acquisition to get to scale," he told analysts. "Which target, what we're going to pay, and when is to be determined."

Uh oh... Subprime will take you everywhere: in Taipei, Taiwan, on August 30 Citigroup "will celebrate four decades of island banking with a reception at the Grand Hotel. Company dignitaries who will be there include Marge Magner, Chairman & CEO of the Global Consumer Group" -- previously, trainer of CitiFinancial subprime branch managers at the Baltimore "campus," where her speech droned on through a World Series baseball game, which many (still, and gone) branch managers still groan about... But in Taipei, "there will be entertainment from well-known singer Tsai Chin who will sing hits from the 60s to 90s, a lion dance and other cultural events and a slide show and photo exhibit along with speeches." (Quotes are from the China Post of August 13).

Update of August 9, 2004: This week, while our wider anti-predatory lending campaign is ongoing, it's back to the mailbag:

Subj: citifinancial predatory lending
Date: 8/6/04 1:25:17 PM Eastern Daylight Time
From: [ ]
To: CitiWatch [at] innercitypress.org


i have been on both sides on the lending game. i was in the consumer finance business for 16 years. i am also a current customer of citifinancial. i was informed recently that my "consumer loan" that originated in 2002 was an interest bearing loan. this loan is secured by an auto. i was not told this at loan closing, nor would i have agreed to this had i known. the young and dumb manager informed me that i was given this information at loan closing, at which point she was a secretary, but she remembers that day two years prior when her manager closed the loan. i am furious .. talk about predatory lending...

Yep.. For or with more information, contact us.

Update of August 2, 2004: Despite its politics, we don’t deny that the Wall Street Journal usually includes in its reported stories facts not elsewhere available. We say "usually," because the Journal’s July 27 front page article about Citigroup "goes downmarket" in Mexico, even "competing with loan sharks," amazingly did not even mention CitiFinancial, which is a major engine in Citigroup’s downmarket aspirations all over the world. (The article also barely mentioned Citi’s interest rates). The article compares today’s Citigroup to the Citibank of previous decades. The comparison ignores that Sandy Weill’s Travelers Group, founded on the subprime lender Commercial Credit now known as CitiFinancial, bought the old Citibank and irrevocably changed it. A shady subprime lender bought the biggest bank, and now goes subprime all over the world. When even the Journal misses this part of the story, it makes you wonder... Speaking of Sandy Weill, the bonus Citi’s board awarded him last year, $29 million, was the largest in the country (and world)... Who was it, again, who was at the helm when Citi ran up its liabilities re WorldCom, Enron and predatory lending? And now (8/1), Citigroup is named as an "iconic" target. It's certainly not ironic...

Update of July 26, 2004: Of Citigroup’s set-aside of $2.65 billion for (some of) its misdeeds with WorldCom, Chuck O. Prince said last week, "While it feels bad to have to pay out dollars of that magnitude, it feels very good to clear the decks and to put those issues behind." That feeling’s become addictive and routine for the world’s largest bank, often for smaller sums of money (though the deck is often repopulated). Consider for example the FTC and private firm settlement with CitiFinancial, which didn’t stop predatory lending, or even include any injunctive relief or reforms -- contrary to the Federal Reserve’s later finding in May 2004 that predatory practices continued... Meanwhile, Citigroup is rumored to be one of the two main hunters seeking to acquire Cendant Mortgage Corporation...

Update of July 19, 2004: The spinning never stops. On July 16, Citigroup's Bob Willumstad was in Upper Manhattan, with an oversized check for $900,000, ostensibly for financial literacy. The receiving organization, without mention that CitiFinancial was charged with predatory lending by both the Federal Trade Commission and, less than two months ago, by the Federal Reserve Board, lavishly praised Citigroup, including in a op-ed disseminated over the Copley News Service. Its affiliates in five other cities issued identical press releases praising Citigroup. One wag questioned whether this financial literacy partnership will include objective presentations about the costs of credit insurance (of the type CitiFinancial still hard-sells), about the dangers of being talked into converting unsecured debt, including retail installment contracts, into home-secured debt, the type of "sale finance conversion" that CitiFinancial urges all of its offices to do. For now, as a matter of financial literacy, any and all of Citigroup's potential partners or "students" should at least look at the Federal Reserve's May 2004 predatory lending cease-and-desist order about CitiFinancial, here.

Update of July 12, 2004: CitiFinancial takes predatory lending global -- from the Western Mail of July 8 reports that "A loans company has agreed to redeem a couple's mortgage after an appalling catalogue of errors that included threatening them with having their home repossessed.: CitiFinancial says sorry: Last night a spokesman for CitiFinancial offered Mr. Mullan an unreserved apology and said that in view of the errors that occurred, the company would immediately redeem the mortgage. The spokesman said, 'We do have serious concerns about the way this case has been handled, and in the circumstances believe the right thing to do is to redeem the mortgage.'"

On the lay-off front, Citi is slashing 400 jobs in Des Moines, Iowa, and in Overland Park, Kansas, and Columbia, Maryland, it’s eliminating another 160 jobs.

Update of July 5, 2004: In "Fed Fines Citigroup for Abuses," in July's Origination News, a pro-subprime lawyer from Kirkpatrick & Lockhart is quoted that the settlement "definitely addresses asset-based lending... I have never heard of a settlement where the lender is required to release the security interest on the loan." One advocate was quoted with qualified praise of CitiFinancial, stating that it has "definitely improved." We dispute that -- the abuses have been shifted from high-profile issues like single premium credit insurance (and the even-longer clung-to personal property insurance, on fishing rods, ice chests, etc, see below in this Report) to other aspects... The same Kirkpatrick & Lockhart lawyer is quoted that "It is certainly my sense that it was in large part because the Fed felt it had been misled and they are just not going to put up with that... A $70 million penalty is a big hit." But it's not a big hit, to a $1 trillion bank... Meanwhile, it's now rumored that Citigroup is in the run to acquire New York Community Bancorp and its 141 branches. Developing..

Update of June 28, 2004: Turns out that CitiMortgage, and not just CitiFinancial, is doing subprime loans. CitiMortgage in St. Louis has posted an advertisement trying to hire a " Risk Management Analyst" to be "responsible for analyzing potential sale opportunities of subprime whole loans." Who knew? Citi usually claims that its subprime loans are only made through CitiFinancial...

From subprime to China: Citigroup has suspended two of its senior China bankers, including the high-profile Margaret Ren, in a move that raises questions about the U.S. investment bank's interests in the China issuance market. On June 24, Citigroup spokeswoman Katherine D'Arcy confirmed the contents of an internal company memo that said the New York-based financial-services giant had suspended Ren, daughter-in-law of former Chinese premier Zhao Ziyang and the vice chairman of Citigroup's China investment banking operations, and Earl Yen, director of China investment banking. "With regret, after a careful and thorough review, we have suspended Margaret Ren and Earl Yen,'' Citigroup said in an internal memo sent to senior management on June 23. "The conduct for which they were suspended, which did not involve client matters, related to the presentation of false information to the company and its regulators,'' the memo said. Lying to regulators -- it seems to be common throughout Citigroup's regions and lines of business..

Update of June 21, 2004: Ten days after announcement of the Federal Reserve's settlement on the cheap ($70 million) of predatory lending charges against Citigroup, Cit's sent out a letter announce their hiring of one Eric Eve, previously "special assistant for political affairs for President Clinton," as head of "community relations." Well, Citigroup sent down to South Carolina one of Clinton's lawyers in the Paula Jones case, Mitch Ettinger, to intimidate CitiFinancial's own ex-employees... Intimidation, retaliation and schmoozing appear to be the job description, not reform. But we'll see... Beyond revolving door, there's deep political connections, to Buffalo assemblyman (and deputy Assembly speaker) Arthur Eve, and Sen. H. Clinton counsel Leecia Eve, whose position Eric E. alerted Leecia E. to, according to the Buffalo News of Feb. 23, 2001. This is how Citigroup tries to not only cover its sins, but allow the predatory lending to keep on keepin' on. Here's another letter, from another (new) source:

Subj: CitiFinancial

Date: 6/16/04 12:57:39 PM Eastern Daylight Time

From: [ ]

To: CitiWatch [at] innercitypress.org

Keep up the good work of exposing CitiFinancial. I worked for CitiFinancial for 8 years. I was a manager for almost 3 years. I hate CitiFinancial. The pressure put on the employees is unbelievable.... The advertising is very deceptive to customers. Employees are trained to avoid disclosing the excessive interest rates as best they can. Employees are also trained to sell the high priced useless insurance such as credit life, credit disability, involuntary unemployment and personal property. It is ridiculous how much insurance premiums can be added to a loan... Upper management puts soooooo much pressure on branch managers and branch employees. They use intimidation and love to embarrass you in meetings. I worked in several offices and almost every employee in every office feels the same way I do. I assure you, at least 90% of the employees would leave CitiFinancial if they could, and many do -- they have a very high turnover rate.

Another thing among several others, regarding employee overtime. Upper managers want it both ways. They want employees to work a lot of overtime hours but sure don't want to have to pay them for it. I heard a district manager praising an employee one time because the employee worked a lot of overtime but never included it on her time card. The DM said "that's the kind of employee I want". It happens ALL THE TIME! Employees working overtime but they know they better not claim it on their timecard if they know what's best for them. They know if they claim overtime they will face the WRATH of their Regional Manager. Employees know they better not get on their supervisors bad list.

ICP note: including by whistle-blowing...

Update of June 14, 2004: Now that even the FDIC has acknowledged a need to protect consumer information during outsourcing of the kind engaged in by Citigroup, U.S. regulators including the Federal Reserve just might want to pay attention to Japan's Financial Services Agency's recent finding that Citigroup "lost data" on 123,690 banking, credit card and investment transactions during shipment to the bank's Singapore data center. On June 11, the FSA in Tokyo criticized Citigroup for having taken a full month to even inform customers of the data loss; the report requested by the FSA on the problem was about a month late, and Citigroup's Singapore branch took six days to inform the Japanese unit of the loss. Hey -- at CitiFinancial in Tennessee (and elsewhere), they just shred the information, before the Fed's examiners show up...

Some more insight into CitiFinancial, from (among our favorite) sources:

Subj: Everything you always wanted to know about credit insurance but was afraid to ask

Date: 6/8/04 3:02:08 PM Eastern Daylight Time

From: [Long Time District Manager] To: CitiWatch [at] innercitypress.org

Re: ICP's pressure to revise Citi's personal property insurance sales. I followed this closely. It was awfully embarrassing to ask for fishing tackle, bug zappers (literally), and ice chests as security. Bravo to ICP!

...As far as the ancillary products, we sold Home and Auto (an over inflated auto club program that included additional warranties on major home appliances, emergency room/ambulance reimbursements, support to initiate neighborhood watch programs, child registry, etc. Really not a lot to do with respect to a personal or home equity loan. We sold them in 1, 3, 5 & 10 year policies at premiums of from $249 to $1749. The approach we took to selling these was to sell three year or less policies on our personal loans, and 5 year or more policies on anything that was secured on real estate...

ROCopoly.... In order to qualify, the branch team had to score QUICPlan (Quarterly Incentive) points. These were accumulated based upon growth (in the personal and real estate loan portfolios), delinquency (30 day personal loan, 60 day personal loan, 60 day real estate, and 60 day sales finance), and insurance sales (personal loan $/K, Equity Plus $/K, real estate premium/loan, and non-credit premium/loan). Then there were the various ROCopoly categories: SFCs (which had a per person pay out based upon the 5-age of the baseline converted), PB renewals (calculated as the SFCs were), Home and Auto (paid out on a pool basis - and yes this would be divided among the branch team), Equity Plus and then Real Estate.

You referenced a DM to BM memo (that frankly sounded all too familiar) whereby the DM states that "...where credit approval exceeds...authority...refer to [me]...if it qualifies for Equity plus...(s)he should find notes ...reflecting that conversation..." The notes would ideally be placed in the MAESTRO system, although it is possible that these notes would just be hand written on the Pricing Exception Request form. Normally, these pricing exceptions had to go higher than the DM up the chain of command. If the branch and the DM could not overcome the customers objections to a 24.99% - 27.99% rate, you had to seek an approval to the exception request. There was always mass confusion on what we were to offer those customers who received a particular direct mail piece. It involved double speak from Clements (for over two years he adamantly stated that the branches were to charge the noted rate (18.99%) on the mail piece, and declared he would defend any branch cited for doing so by audit, and then he would alter this claim refuting he had ever stated such, and with equal adamancy declare that the branch that did not price at the required pricing was out of compliance and deserved an audit citation. Exceptions were sought by indicating that you had attempted to sell a real estate secured loan at a much lower rate (from 8% to some 18.99% depending on the qualifying demographics such as equity position, credit, and ability to pay...

You asked about the discretion allowed to BMs in their quest to secure sales finance dealers. We were instructed to source dealers with a higher probability of home owners as customer: carpet, home improvement, higher end furniture stores. The BM was supposed to source this business, but the company also has people in place whose responsibility is to just source corporate accounts. In terms of measuring the number of home owners: the results are tracked from the time that the first sales contract is purchased. Every dealer had its own report showing what the home ownership status was, how much equity was in the home, what the high credit might be for that individual, and if you coupled that report with another branch/district report the delinquency status of that customer could also be tracked, as could the yield on his sales account...

One more item. Thought you might want to understand the insurance penetration formula. On ROC (manager yearly bonus program) and ROCOpoloy (employee monthly bonus program) points were gained towards bonuses based on the "dollars per thousand" method. For example: sell a single life premium of $250 and the total of payments on the loan is $5000 you divide $250 by $5000 and multiply times 100. This gives you $50 per thousand for the bonus program. As you can see, by simply selling life insurance only, you won't even qualify. Thus the pressure to sell. They have a similar method for monthly premium real estate loans too. Don't let the "customer first" thing fool you, its still required that you sell insurance. If you don't, you don't get paid bonuses!

On CNNfn's Money Gang last week (6/8), Farrell said what "bothers me about Citigroup is the executive compensation. Mr. Weil retired last year and he got like $38 million or $40 million as a going away present and Mr. Prince that came in, he was a chairman for brief period, got like $29 million. And Robert Rubin , who I think is one of the great people in finance." KIERNAN: But he hasn't been with the company for all that long. FARRELL: Well, he has one direct report, which I think is his secretary. He gets paid something like $15 million. And that bothers me that there's this pay scale that exists. ICP note: particularly at a predatory lender...

Update of June 7, 2004: This week, in continuing whistleblowers' analysis of the Federal Reserve's half-way measures with CitiFinancial, we have dueling (interacting) messages, from "13 year branch manager" and "long-time district manager" (who we'll call "LTDM"). In reverse order:

Subj: Consumer Appreciation Days [at CitiFinancial]

Date: 6/1/04 10:05:43 AM Eastern Daylight Time

From: ["LTDM"]

To: CitiWatch [at] innercitypress.org

Just read the excerpt from the 13-year manager re: CAD (Customer Appreciation Days). This is one of those events that I was going to allude to down the road. This manager is right on in his/her assessment. It's a program that has gone on for years. At one time it lasted from 3 days to a week during the months of May and November. It has since become a two week stint. Honestly, we drove it like hell! Recognition for a successful CAD month was EXTREMELY HIGH! We expected branches to write 100 loans during a week's period of time.. and yes, God help the manager whose area didn't have substantial growth after a week of this type of production! Usually they did, but occasionally there were those areas that kept the brow beatings at bay by simply "re-writing balances only" (just a straight refinance of an account with nominal cash advance). The loans were not supposed to simply help the customer w/a refinanced loan at a lower payment, the loan was to increase the amount owed by the borrower, increase the security (collateral) position, and provide further "protection" on the loan.

"Protection" was the safe means to refer to credit and ancillary insurance products. We coached to offer protection, not credit insurance - ever. Thirty percent of a branch's profit is attributed to the sales of insurance products. In fact, from the credit insurance premiums that a branch sold, they received 35% commission if Accident & Health or Involuntary Unemployment Insurance, and 30% commission if for credit life insurance. All of the ancillary products - which included something called Home and Auto - are worth 40% commission back to the branch. Every branch, as well as every employee is required to track their results. Regardless of the staff position, every one is held accountable to produce at acceptable levels. This is not measured simply by the dollar amount of premium sold, either. For instance, it is possible for an employee to sell as much as $20,000 insurance premiums on a $120,000 loan. The $20,000 premium may satisfy that employee's premium goal but that was never regarded as sufficient measure! Insurance sales were tracked on "dollar per thousand" , or "dollar per hundred". This was a method whereby the amount of premium was measured against the total loan volume (or in the case of personal loans, it was measured against the "total of payments"), in order to keep track of the percentage of premium sales. Normally every insurance product that was sold was tracked on an individual employee basis: credit life, credit disability (accident and health), credit involuntary unemployment, and the various ancillary products.

As for SFC's...these are those accounts generated from a retail sales contract that was opened to finance a customer's purchase from a community business (furniture, appliances, home improvement items). In order to appeal to the business owner, Citi offered great programs such as 90-, 120-, even 360-day same-as-cash, or no interest etc., at very reasonable interest rates as low as 16.99% to 24.99% depending upon the quality of business that the business can generate. As these contracts are purchased into the branches, it is the responsibility of the branch team to "convert" them into personal, Equity Plus, or real estate loans. The SFC program was tracked as intensely as the insurance sales were. And again, certain rules applied to ensure growth to the branch: there had to be a $500 advance on these loans in order to get ROC-opoly credit. Huge audit violation to payoff a deferred program sales finance account, but everything else had to be converted because no income is credited to the branch from the existence of sale finance accounts. On any branch-, district-, state- (any level really) Goal Report, or ROC Report as it came to be known, you could see the profit margin that was possible given the sales finance base, but the next line to the report subtracted out that income. The income went somewhere (!), but the branches were not entitled to include it in the Funny Money known as the ROC Report (which ultimately lead to what was then annual bonuses of up to a full year salary for some branch managers!), or ROCopoly. (I guess that's some of the profit that allows Citi to buy out restitution programs when they really screw up!)

LTDM added:

Subj: Re: CAD

Date: 6/1/04 10:39:31 PM Eastern Daylight Time

From: ["LTDM"]

To: CitiWatch [at] innercitypress.org

... Every time that we would merge with or acquire another faction, I always pitied the poor bastards for the integration process that we would require. It was always a big deal when we merged with or acquired another group, to run a huge solicitation program of some kind or another. The idea was that we would host a "grand re-opening" by acquainting our new customer base to CitiFinancial. That's probably why the "13 year manager" from whom you recently received correspondence is feeling so much pressure. Besides CAD being CAD, there's the additional expectations of what the new WaMu branches can provide, and if they are not doing so, how the existing Citi branch managers can set the tone for them...

"Making Payoffs difficult" -- We had a whole program - "Save a Payoff"! My branches could not quote a payoff until they faxed me the demand, and I personally called the customer to find out what they were going to get in replacement of my Citi financing. I was to coach my branch managers that they have 28 days to get the payoff to the requesting party and if any one had any issues about this length of time required to respond that they should call the District Manager, myself. For awhile, we (District Managers) were instructed to have the customer call our Region Managers if we could not convince the customer to not pay off their account. Of course there was a two fold message to this: 1) the DM clearly did not have the capacity to bargain with the customer. 2) the DM needed to be humiliated by calling upon their RM for support. The response from the branches may, or may not have been that calculated. The work load in the branches is immense! So the fact that payoff demands are delayed may not always be at the DM/RM directive, it could also be that the branches are simply over burdened and are unable to respond to the request.

...The organization really needs to come down from the TOP. I have sat and dined at Chairman's Forum events with Sandy. What a pompous ass... He has his wife deliver PR to a eight person banquet table so he doesn't have to intermingle! I have observed Bill Clements make a fool of himself kissing K.C.'s ass during a manager's meeting. I have listened to Bill and his Region Managers discuss how they were going to "...piss [xxx] off to see how {he/she} responds" .... That is how Citi management operates.

Until another time....Regards!

And now, 13 Yearzo's most recent:

Subj: Re: Citifinancial practices- many thanks for your message; a few questions, a...

Date: 6/2/04 12:32:29 AM Eastern Daylight Time

From: ["13 year branch manager"]

To: CitiWatch [at] innercitypress.org

Here's my attempt to answer your questions... While "breaking delinquency" is a huge item at Citi, we wouldn't put deals into equity plus loans because it took too long with these disclosures. Sales conversions were not converted to break delinquency because we didn't have them as delinquent accounts in the branch. Sales were converted to equity loans for growth and profit. Personal loans were rewritten to make additional income and cure delinquency. Understand that Citi wants all accounts to be less than 30 days delinquent by the last working day of the month. Branch employees will do ANYTHING necessary to not carry an account delinquent. Rewrites, free deferments, payment manipulation, etc. Understand they MUST collect or move these accounts to prevent serious problems from supervision.

Hope this helps. Please keep my name confidential... But you can ask me questions anytime.

Oh, we will, we will...

Update of June 1, 2004: Below is ICP's analysis of the Federal Reserve's May 27 cease-and-desist enforcement action against CitiFinancial. Since then, the whistleblowing continues:

Subj: Citifinancial practices

Date: 5/29/04 6:11:28 PM Eastern Daylight Time

From: [13-year CitiFinancial branch manager]

To: CitiWatch [at] innercitypress.org

Just read your comments regarding the $70 million dollar Citifinancial settlement. I'll tell you, the pressure is on for managers and staff to book business with high balances at high rate to increase yields and profits. Take these two examples: Citifinancial has a bi-annual event they refer to as Customer Appreciation Days (CAD) in which they "thank" their customers by soliciting them to rewrite their personal loan with either no payment until July (event held in May) or Next Year! (November event). The idea here is to rewrite every customer, recharge them for insurance premiums and fees, and advance a small amount, say $500 or so in order to renew income and cure delinquency. They expect to add one month in productivity each time, thus getting 14 months production in 12.

Tracking by branch staff starts with calling customers and setting up appointments early in the month so to maximize the number of rewrites they can get. And, you are accountable for these results! Just another way to increase predatory lending income! (By the way, personal loans are rate structured to 27.99% on renters and 24.99% for homeowners, a rate exception is an audit exception and highly frowned upon by the company!)

As for the lawsuit issue, the pressure is on branch staff to "convert" as many sales accounts to loans as possible. Rocopoly tracks SFCs because the branches don't make any income from sales accounts. They must have a high rate loan to make any money at all. The loans in question were converted sales accounts, written on 90 day, 180 day or 360 day same as cash deals converted to 17.99%-21.99% second mortgage loans. They sometimes used a "blended rate" deal that started at 17-21% for 30 months then reduced to lower rates after that time. They advertised these loans at lower rates because they were "blended"...And the premiums for insurance on these deals were HUGE income for the branches!!!

Stay tuned, there is more. Customers have the "choice" of having a prepayment penalty on their first or second mortgage loans. The choice is whether to pay an additional 1/2 in APR to do it without! And they don't allow customers to refinance for lower rates without taking additional cash! Growth is such an important area to them they penalize customers who want to simply refinance at a lower rate, the same rate they may be offering to other customers with the same credit and loan to value ratio!

The Fed has their hands full if they want to dig a little bit more and tap some of the penalty income they can claim from this predatory lender! Regards -- 13 year branch manager

Until next time, for or with more information, contact us.

Update of May 28, 2004: Yesterday, the Federal Reserve announced a cease-and-desist enforcement action against Citigroup's subprime CitiFinancial unit, calling for $20 million in restitution, a $50 million fine, and some "remedial" actions -- including revising its conpensation structure and its practice of misleading examiners and destroying or hiding documents. See, e.g., "Citi Unit Here, Parent Fined: Fed penalty is $70 million for fair-lending infractions;" by Bill Atkinson, Baltimore Sun, May 28, 2004.

The practices the Fed describes in the order -- illegal requiring of co-applicants in order to sell more joint credit insurance, and shifting personal unsecured loan customers into high-cost mortgage loans -- are only a few of CitiFinancial's problematic and predatory practices, the tip of the proverbial iceberg. CitiFinancial's business model is based on the sale of credit insurance that is neither asked for by, nor in most cases beneficial to, the customer, and on "upselling" customers from unsecured to home-secured loans. During the Citi - Golden State proceeding, ICP submitted to the Fed as Exhibit 7.1 a CitiFinancial insurance sales script, which under the heading "Questions to Ask During the Application" listed, as the first question, "Your wife / husband's name is? (Joint Loan)." The upselling was documented by a CitiFinancial program called "Upsell Challenge." For further and ongoing example, ICP has evidence that CitiFinancial pays its branch managers based on how many sales finance loans (for furniture, for example) are converted to more lucrative real estate-secured loans. It's called "Sales Finance Conversion," or SFC, in CitiFinancial's compensation scheme, called ROCO-poly.

Downplayed in the order, in Paragraph 14, is the Fed's requirement that CitiFinancial henceforth ensure "full and honest cooperation with regulatory authorities" and improve "document retention policies." The background to this is instructive:

While Citigroup was applying to buy European American Bank in 2001, Inner City Press was contacted by CitiFinancial employees in South Carolina, who described how they were ordered and compensated to fool customers, with credit insurance and upselling to high-cost loans. ICP submitted these complaints to the Fed and to the press: the American Banker of July 10, 2001, quoted from "an affidavit taken Sunday by the community group Inner City Press/Community on the Move that CitiFinancial pressed customers to refinance loans at higher rates -- a practice known as flipping."

Soon thereafter, two of the CitiFinancial ex-employees who contacted ICP were threatened by Citigroup with being sued for violating a so-called "non-disparagement" clause they had signed. The clause, by its terms, prohibited the employees from describing, even to regulators, what they were paid to do at CitiFinancial. ICP provided copies of these gag orders to the Fed and to the press. The American Banker of July 30, 2001, reported that ICP

"has interviewed numerous former CitiFinancial employees [and] has alleged that several were told they had to sign nondisparagement agreements with the company as a condition for receiving their final paychecks. A copy of one such agreement, obtained by American Banker, bars the former employee from making 'any statements to any person regarding the company and its agents of a derogatory nature or which disparages the reputation, business, or integrity of the company or any of the executives or employees of the company.' It also contains a clause barring the former employee from disclosing the agreement."

Citigroup sent down to South Carolina a partner from its outside law firm. Reuters, in a July 27, 2001, article entitled "Citigroup Hires Lawyer in Loan Abuse Case" reported that Citigroup "impressed on former workers that Citigroup will enforce so-called non-disparagement clauses, which keep employees from making derogatory statements about the company, according to the person who was questioned by Ettinger's legal team and [ICP].... Citigroup spokeswoman Leah Johnson [said] 'Our severance agreements, like those of most companies, include a standard non-disparagement clause. Because of our desire to assure that our stringent standards of conduct are upheld, such clauses at CitiFinancial never apply to employees bringing any concerns about illegal or unethical activity they believe they have witnessed to the appropriate authorities inside and outside the company.''" The Fed conditioned its Citi-EAB approval on conducting an examination of CitiFinancial.

By the terms of the May 27, 2004, cease and desist order, particularly Paragraph 14, what the Federal Reserve found was at odds with the above-quoted, Reuters-reported claims of Citigroup's spokeswoman - who's still listed on Citi's May 27 release (in which Citi brags that $70 or $100 million has "no material impact" - too big to discipline).

Before the Fed even got the CitiFinancial examination going, Citigroup applied to buy Golden State Bancorp. During this challenge, ICP was contacted by CitiFinancial whistleblowers in Tennessee and elsewhere. ICP submitted these complaints, and evidence, to the Fed, and soon the Federal Reserve Bank of New York sent two attorneys to Tennessee, to depose the CitiFinancial ex-employees who had contacted ICP, and others. The American Banker of October 11, 2002, reported

"In the interviews taking place this week in Tennessee, Fed officials will meet face to face with former CitiFinancial employees who had told Inner City Press of unethical sales practices... including how she was trained to cover a loan document with her forearm when filling it out, so the customer could not see portions. Shari Leventhal is the Fed attorney who was dispatched this week to Tennessee to conduct the inquiry, according to Inner City Press. A spokesman for the New York Fed confirmed that Ms. Leventhal was a counsel at the bank, but would not comment on her activities."

ICP was informed, by those deposed, that accompanying Ms. Leventhal were Yoon Hi Greene, Counsel, and Ms. Gretchen Downing, Bank Examiner, both of the FRBNY. ICP also reported to the Fed, and the above-named Fed employees were informed, that CitiFinancial offices removed and shredded documents. ICP named names, and locations: for example, that CitiFinancial District Manager Nancy Neel removed boxes of documents from CitiFinancial's Morristown TN office, took them to Jefferson City TN and shredded them. ICP reported this to the Fed, and directed the Fed to specific documents that remained unshredded (because whistleblowers had hidden them), in the Jefferson City office. ICP asked for copies of the deposition transcripts. The Fed refused to provide the transcripts, either to a (deposed) jocular ex-employee, or to ICP, including under the Freedom of Information Act.

Now, more than a year later, the Fed fines Citigroup $70 million, while downplaying Citigroup's blatant attempts to conceal and destroy evidence, and to gag its own employees. WorldCom has cost Citigroup $2.6 billion (so far); apparently low income consumers are worth less than three percent of that.

CitiFinancial on May 27 tried to "spin" both the press and certain Citi-selected consumer advocates, claiming the problems are behind it, and stating that "only" 1900 customers are eligible for the HOEPA / high cost loan restitution, and 100,000 customers for the forced co-signed joint insurance. It's important to note that the practices alleged by the Fed were not limited to -- in fact, had nothing to do with -- the business Citigroup bought along with Associates First Capital Corporation in 2000. These were and are the practices of CitiFinancial, previously known as Commercial Credit, where all of Citigroup's senior executives worked (and designed these practices). Until next time, for or with more information, contact us.

Update of May 24, 2004: From last week's correspondent:

Subj: Re: citifinancial [Second dispatch]

To: CitiWatch [at] innercitypress.org

... Marge Magner was integral in training sessions, manager orientations, etc. And yes, there'd be plenty of times when she would facilitate the meeting as well. If not with the actual training materials, but with the evangelical punctuations that she, KC Mead, Bill Clements and Bill Starkey are famous for! I was there for 14 years., so I was in just as Marge was gaining a foothold to her status.. Believe me, every utterance in "rote" training programs were cleared by Marge... Willumstadt was very visible at annual meetings, "kick off meetings" of various kinds....However, he was never as outwardly, warmly endearing for the masses as was the outward facade of Marge, so he was not quite the PR figure that she was...

Until next time, for or with more information, contact us.

Update of May 17, 2004: Quite a week for Citigroup: paying off $2.65 billion, supposedly, to atone for its enabling of the WorldCom's fraud, then scooping up for $1.26 billion the mortgage business of Principal Financial (to, if the past is any guide, defraud or nickel and dime yet more consumers). Principal, we've heard, has faced numerous complaints about its servicing; there'll be more. We continue to receive information from those inside or who've just left the company, such as this, from a long-time CitiFinancial employee:

Subj: CitiFinancial
Date: 5/10/04 6:06:46 PM Eastern Daylight Time
From: [name withheld]
To: CitiWatch [at] innercitypress.org

I have been perusing your site for a couple of years. I worked for CitiFinancial for 14 years in a number of supervisory capacities... You are pretty much right on the money in assessing the problems at Citi, but there is so much more. You haven't tapped into the management style of the folks at CitiFinancial...that is where the real travesty lie. Upper management is riddled with phony evangelicals ("Do the right thing - first time, all the time.") the likes of Bill Clements, K.C. Mead, a "Managing Director" who was involved in the suicide of one of her region managers shortly after Citi acquired he and she from Transamerica. (Yes, there was a time when Citi was conducting a due diligence of that organization, too. That was just before Citi bought Sec Pac Finance - the financial services arm of BofA at the time.)... You also haven't dug as deeply as you can into the incentives at Citi - everything from the lucrative Chairman's Forum to the bonus structures to the means of promotions. Now, this company has once again bought themselves out of being held accountable - for a mere $2.65M. The dogma of "getting this behind us" is so resonant in my ears. Management touts this ability...don't believe for a moment that it's a lesson learned. It's just a very small fine to pay out of the huge Citi coffer that gets fatter & fatter everyday with the help of the products of the environment - as I myself once was.

We will have more from this correspondent...

Update of May 10, 2004: A Dow Jones headline from May 7, followed by an explanation. Citigroup's Banamex Targets 8M Homes Without Bank Accts - yep, targeting them with CitiFinancial, settler of predatory lending charges in the United States. Meanwhile, CitiFinancial has announced plans to open ten new offices in Hong Kong... COO Willumstad said, at the AGM on April 20, that the same practices apply outside the US as within. Well, the newspaper The Standard quotes CitiFinancial's Simon Chow that CitiFinancial's "average interest rate will be over 20 per cent annually."

Update of May 3, 2004: Citi and the predators -- it's not limited to mortgages, or even to CitiFinancial. A recent connection is Citi's decision to be underwriter and book runner for a major stock offering by Dollar Financial Group, another other things a nationwide check cashier (mostly under the Money Mart brand name), and a payday lender subject to class actions for usury. Dollar settled such a class action in California, in 2001. Doesn't bother Citigroup -- Dollar Financial's books are stored at Citigroup in the Brooklyn Army Terminal, 8th floor of 140 58th Street... The OCC has reached a formal finding that "Dollar Financial actively promotes loan rollovers, creating "a misuse of the loan product for long-term credit." Citigroup's lead bank is the OCC-supervised Citibank, N.A....

Update of April 26, 2004: It's a once-a-year event, so it will occupy this week's CitiWatch Report: the shareholders' meeting held April 20 at Carnegie Hall. Onstage was a table with three seats: Weill, Prince and Willumstad. Behind them a screen, on which a video would later be played. Weill began the meeting comparing Citi's performance to AIG, Berkshire Hathaway and GE. "If you have personal business," he said, "representatives of Smith Barney and others are in the back of the hall." Then he endeavored to move quickly through the agenda, almost closing discussion on Agenda Item One (election of directors) before any questions could be asked. A certain Ms. Davis, soon to depart for Stanford, Connecticut and Morgan Stanley's meeting, spoke at some length. [Just prior to Weill's kick-off, she accused ICP of misquoting her, without saying how or where; there will be no direct quotes from her in this report, since taping at the meeting at prohibited to everyone except Citi, which should we think provide copies.]

This question of directors had been big, in the run-up to the meeting, with even the New York Post running a headline, CAL-PERSONAL, reporting that Calpers would vote against Weill and Prince, the latter for conflict of interest. But there was very little debate at the meeting itself. ICP finally asked a question -- Weill demanded to know if it would relate to directors, it did: why should those who ran Commercial Credit and CitiFinancial, leading into the predatory lending settlement with the FTC, continue on the board? Why has director Robert Rubin claimed that this controversial subprime prime lending is not under his "aegis"? (See further below on this page: word search "aegis," we did). Why does CitiFinancial have not even purported "best practices," outside the U.S.? Weill asked Willumstad to answer; Willumstad said that he didn’t agree, that "we have retooled to the standards of our critics," then claimed that CitiFinancial has the same practices outside the U.S. as within. ICP asked, where do you suggest we go with the inconsistencies? Weill responded, Willumstad, and asked Rubin (seated in the front row) if he'd heard about aegis. We'll see.

There was some humor -- of Parmalat, for example, Prince groaned that to be defrauded by an Italian milk company was truly to be defrauded, indeed, to which another on the stage - Weill perhaps? We want the tape -- said, "It's powdered milk." Much was made of Citigroup's $100 billion of equity. A union presented a proposal that Citigroup at least better disclose its political campaign contributions; ICP supported it, noting Citi's lobbying against anti-predatory lending laws at the state and local levels. A video was shown, of Citi's $200 million financial education program, with talking head shots of all three on stage, only this time in a windowed office over Park Avenue. Rubin and Marge Magner were also interviewed. Among the project profiled was one in which a Russian banker -- to know who, we'll need the video of the meeting -- expressed gratitude for having been flown to the U.S. and put up for four weeks. Then it was open mike time, and time for another question: is flying for-profit Russian bankers around part of the financial education program? Prince deadpanned: if it's in the video, it's in the program. Okay then -- any reaction to JP Morgan Chase's $800 billion pledge, and BofA's $750 billion? Willumstad responded that those were done in the context of mergers, and that in Citi's last merger, Golden State, $175 billion was committed to those Golden states (Cali and Nevada). He said while Citi's number one or two in subprime, it's number five in prime mortgages. ICP's subprime question -- whether the financial education is tied in any way to the relatively lower income customers to whom CitiFinancial is directed -- was answered by Prince, who said "we accept that we need to be leaders... as noted, we were all at Commercial Credit since 1986," and more -- we'll need the tape. An ex-Primerica employee presented a symphony for the company (very surreal, that) -- Weill joked that the man had made it to Carnegie Hall with his music. It was very magnanimous, it was very self-satisfied, it was the world's largest bank, praising itself, in a concert hall named for a robber baron...

Update of April 19, 2004: Smug dinosaur, now under fire: Sandy Weill, speaking or rather pontificating April 14 in Ithaca, New York, at a love-fest at Cornell, said "I don't do e-mail and I think that turned out to be a good idea." Leave no paper trail: it's one of the prime techniques of, among others, predatory lenders. Power corrupts -- and makes blind. Weill also said, of Citi's many scandals and fines, "I don't know what I did wrong." Then he hasn't been paying attention; he hasn't been listening. Further efforts in that regard will be made this week [See Report of April 26].

Update of April 12, 2004: Who benefits from the lack of follow-up? Citigroup, of course. Two examples from last week: on April 7, Chuck Prince, Marge Magner and their successor as high-cost lending wizard Ajay Banga led a team of Citigroupers who filled, nearly entirely, the Jackie Robinson Youth Center in Harlem, all for the purpose of blowing Citi's trumpet regarding the funding of "financial literacy." Many of the journalists present -- or who didn’t' bother to go to Harlem, but only conduct phone interviews -- ran the story without qualification, not even mentioning that Citigroup has settled charges of predatory lending, and also of misleading investors. One reporter who did make this connection disclaimed ICP's congratulations, explaining that it's simply that he has a memory that runs more than a few days backwards. Or maybe the suck-up to Citigroup, by not only regulators but some reporters, has a more sinister explanation...

A second example: after being praised in some quarters for embracing pro-environment policies (allegedly, Sandy Weill decided he didn't want his grandson to hear he was destroying the planet), Citigroup appeared last week on a last of banks who are undercutting even their "Equator Principles" -- and was chided by organizations including Friends of the Earth, and IPS, calling Citigroupers "wolves in sheep’s clothing." But given their history, why would anyone believe these Citigroupers?

Update of April 5, 2004: The financial media's kids-glove coverage of Citigroup continues to amaze. Last week Business Week Online purported to interview Citigroup's Marge Magner, calling her "Sandy Weill's protégé." Yep -- Ms. Magner started as subprime lender Commercial Credit in 1987. BW's run-down of deal didn't mentioned Associates, nor what Washington Mutual Finance Group does (subprime lending). Instead, Ms. Magner was allowed to pontificate about how much due diligence Citigroup does. She states: " you're looking to acquire products, a distribution method, or something that you don't have now that clearly moves you forward in terms of your business strategy or provides greater leverage for your overall business platform. Maybe the acquisition allows you to bring costs down or to distribute your products to an expanding consumer base." So -- what was the purpose of Citi's acquisition of Associates First Capital? Increased predatory lending, including into Japan and India...

Meanwhile, Citigroup's claimed new environmental consciousness is reflected by the selection as "lead outside director" of Alain Belda of the aluminum company Alcoa...

Update of March 29, 2004: This week, some numbers: Citigroup's new CEO Chuck Prince has already been shown to have contributed $2000 to both the Bush and Kerry campaigns.... Meanwhile, higher than last week's estimate, Sandy Weill's payday's now been valued at $44 million: $30 million in cash and 2.5 million options in Citigroup stock worth about $14 million. Robert Rubin, who has claimed that Citigroup' subprime / predatory lending doesn't happen under his aegis, pulled in $17 million....

From the mailbag:

Subj: Citiwatch

Date: 3/24/04 9:49:26 PM Eastern Standard Time

From: [Ex branch manager]

To: CitiWatch [at] innercitypress.org

As a 13 1/2 year former CitiFinancial employee, I have found your report to be quite accurate. I was an award winning manager who left in January for refusing to let my district manager badger me into his predatory lending ways and bullying style. It was so bad that I left prior to my bonus being paid for last year. My branch made a profit of $750,000 which amounts to a "surplus" of $150,000 over Citi's goal for me. However, since I left prior to February's pay out, they refused to pay it to me. This loss amounts to over $8000...This company is not only a predatory lender but a predatory employer.

Meanwhile, Citigroup's high-cost lender CitiFinancial uses the ad agency MindShare Japan for "its entire centralized planning," according to resurfaced journalist Sebastian Tong. Question: does that mean, the centralized planning of predatory lending? In Dallas (strangely), the CAO of " CitiFinancial International Ltd." is a Robb Webb. Is that, "Rob-web," as in "Robbery network"?

Update of March 22, 2004: Simultaneous with its broadcast of voice-over identity theft TV advertisements throughout the United States, on March 19, Citigroup admitted that a magnetic tape containing information on over 120,000 of its customer accounts had gone missing in Singapore. The back-up tape, which had monthly transaction data on 123,690 Citibank customer accounts in Japan, went missing on February 21 while a local security company was transporting it, the Japanese unit of Citibank NA said in a statement. 120,000 people trying to "get their lives back," due to Citigroup's negligence -- how can they film it all?

In Mumbia, India, on March 16, Citigroup announced the appointment of Mr P.S. Jayakumar as Region Head for Asia-Pacific (Consumer Finance). Mr P.R. Seshadri, formerly in charge of Marketing - Consumer Loans, will now take over from Mr Jayakumar as Consumer Finance head in India, where "CitiFinancial provides services in the areas of housing, auto and white/brown goods purchase in addition to mortgage and personal loans."

Citigroup: this is how they steal it. Sanford "Sandy" Weill receiving a 2003 cash bonus of $29 million, according to the bank's shareholder proxy statement filed with the Securities and Exchange Commission. Weill was given a package of more than $30 million for 2003, including salary and other compensation, the proxy said. The package compares with the roughly $18 million in stock options and other compensation Weill received for 2002. Prince, Willumstad and Rubin also made out like bandits -- and we mean that literally...

Update of March 15, 2004: We step back this week from the nitty-gritty of Citigroup's sleaze to two takes at the big picture. Dueling articles in Barron's and the March 15 WSJ tout Citi's global push. The Barron's "analysis" is a puff piece, blatantly seeking buyers for Citigroup's stock. It quotes Citi's CFO Todd Thomson that "[t]his isn't a financial supermarket," Thomson said Friday. "We have no interest in becoming a financial supermarket. What we are trying to do is focus on high-growth and high-return areas of financial services" -- yeah, like predatory lending. The WSJ article is somewhat more informative, quoting the head of Citigroup's international operations Deryck Maughan that Citigroup has targeted 14 countries where it will try to triple its credit-card business in the next seven years, says Mr. Maughan, who declines to name them. He has set similar goals for consumer finance, and aims to build retail branches as quickly as possible in 20 countries. The article continues (speculating about which country) -- "In less than 40 years, the combined economies of Brazil, Russia, India and China -- the BRICs economies -- could become larger than the combined economies of the U.S., Japan, U.K., Germany, France and Italy"... We'll see you (and Citi) there...

Update of March 8, 2004: It took a while -- too long -- but finally Inner City Press has begun receiving from the Maryland Office of Financial Regulation documents responsive to ICP's Freedom of Information request regarding CitiFinancial's hiring of the agency's commissioner, Mary Louise Preis, late last year. Among the documents provided are numerous letters on behalf of Ms. Preis, as Commissioner, ruling against or smoothing over complaints against CitiFinancial. There's even a letter that then-Commissioner Preis sent to the Baltimore City Council replying to the Council's request for an investigation of CitiFinancial -- Ms. Preis responded that no penalties were assessed, since Citigroup had announced (yet again) that it was "changing some of its practices." That Citigroup soon thereafter hired Ms. Preis reveals a blatant conflict of interest and corruption of the public process -- the kind that Citigroup brings to many fields (for example, anti-money laundering, where Citi hired the Federal Reserve's money laundering "guru" Richard Small, after being shows as, but suffering few penalties for, laundering. The Maryland Office of Financial Regulation documents have numerous redactions -- that is, whole paragraphs obscured with magic marker -- which we'll be pursuing.

Update of March 1, 2004: now here's a scary thought: Citigroup, with its predatory lending settlements, is moving to because THE credit history bureau in China. The American Banker newspaper reported last week that "China has no credit bureau, so Citi will gather information on applicants and try to act like a fledgling bureau. Most Chinese consumers do not have experience with revolving credit, so Citi will hold seminars on managing credit wisely. " If this "training" is anything like what CitiFinancial does in the United States, the Middle Kingdom will be rife with predatory lending - perhaps even class action lawsuits, and captured regulators, one day... Meanwhile, JAGfn of Feb. 26 reports that Lehman Brothers " recently met with the management of Citi's Japanese consumer finance operation, CitiFinancial Japan (CFJ). Although a small portion of overall earnings, with improvement in other areas, it has spotlighted areas of remaining weakness like CFJ. We came away impressed that the business has been stabilized, restructuring steps are now complete." Yep, Citi is taking predatory lending GLOBAL...

Meanwhile, in the U.S., questionable "home and auto" insurance, which CitiFinancial routinely imposes on loans, has come to light in a recent jury verdict against Household/Beneficial in Oregon. In the case, Vasquez-Lopez v. Beneficial Oregon, Inc., No. 0210-10108 (Or. Cir. Ct. 01/31/04), plaintiffs Panfilo Vasquez-Lopez and his wife Maria Dominguez, paid $1699 for 10 years' coverage, financed in their loan... Documents in the case show how compensation worked: " The Beneficial & FSB 2001 BSM [Branch Sales Manager] Incentive Plan for 2001, Plaintiffs' Exhibit 11 in the case, showed the following compensation schedule for sales staff in selling this product: under $2000 (a month), 4% of net membership fees; $2,000 to $4,000, 8%; over $4,000, 10%. BSMs get a 35% override"....

Update of February 23, 2004: the lack of regulatory oversight of CitiFinancial's surge in subprime lending is amazing. In response to comments and evidence Inner City Press submitted in opposition to Citigroup's acquisition of Washington Mutual Finance Group, the Georgia Department of Banking and Finance wrote back, disclosing that while CitiFinancial Mortgage Company's number of loans in Georgia decreased from 2002 through 2002, the number of complaints against it continued to rise, that Washington Mutual Finance Corp. was submitted to complaints on over thirty percent of the loans it made in Georgia in 2001 -- but that "Washington Mutual Finance is not a licensee of this department, CitiFinancial does not need to obtain approval from this department for such a transaction... CitiFinancial notified the Department about its acquisition of Washington Mutual Finance... [ICP's] request for an investigation of the activities of CitiFinancial in Georgia has been referred to the Mortgage Division and is currently being considered." We'll see...

Meanwhile, Citigroup on Feb. 23 in Seoul announced it will pay the Carlyle Group and others $2.7 billion for a controlling stake in Koram Bank. The (figure-) head of Citigroup International, Deryck Maughan, threatened, " What we have accomplished in Mexico with Banamex or Poland with Handlowy, we feel we can accomplish in a number of Asian countries." Including the start-up of predatory lending in these markets...

From ICP's CitiWatch mailbag:

Subj: Citifinancial

Date: 2/20/04 2:05:39 AM Eastern Standard Time

From: [ ]

To: CitiWatch [at] InnerCityPress.org

I want to share my Citifinancial experience with you. I don't expect any help, I'm way beyond help. It will be nice to just get this off my chest. I'll start by telling you that I have the distinct pleasure of having Fairbanks Capital "servicing" my first mortgage and Citifinancial holds my second mortgage. When I first took out the second mortage, it was with a company called Security Pacific. Although the interest rate was high, I was at least treated fairly. My troubles began when Citifinancial took over my note. My original contract allowed for a $3.00 late fee for late payments and that was all that was ever imposed. This all changed when Citifinancial took over. There, seemingly, was not enough money in the world to keep these people happy, and daily interest? That was not part of the contract that I signed and agreed to! I was repeatedly harrassed at work (sometimes called 3 times a day) despite the fact that they were repeatedly informed that personal calls were against company policy. They once left a message with a co-worker for me that stated, "you'll be sorry if you do not get a payment in today". They came to my workplace to collect on the spot payments on more than one occasion. They came to my home repeatedly demanding payment. A neighbor reported that their collection person was seen walking around my house, peering into my windows one day when I was not home. They opened my mailbox and left personal messages - no stamp!! The harrassment was unbelievable.

In closing, I believe that Fairbanks Capital and Citifinancial worked hand in hand to bankrupt me. I cannot possibly meet their demands.

Ah, Citigroup...

Update of February 16, 2004: this week, straight from the lion's mouth: Inner City Press has been provided with an internal, rally-the-troops e-mail, from within Washington Mutual Finance Corp. just as it was being acquired by Citigroup. It gives a flavor of what Citigroup looks for, in a subprime acquisition -- the hard sell:

From: Cline, Jerry

To: [Branches]

Managers: We can't afford to lose any time on getting loans this months --- we can't wait till you get back next week to start looking for P[ersonal] L[oans] and R[eal] E[state] loans -- you need to have a meeting today on what you expect your staff to get accomplished while you are gone -- I want you to schedule a Real Estate day for tomorrow -- (our pipelines is poor to say the best [sic]) with focus only on RE from 10:00 to 7:00 (8:30 to 10:00 ID collections). Challenge them to reach a certain number of working RE apps by the time you return from a half day or full day off. Make this total for the group -- assign out your collections routes and talk to them about renewals and RE loans from that -- go over my leads and print potential RE customers if need be -- I do expect you to follow up on what they do each day -- don't forget to assign someone in your office a security level of 40 and make sure check signing is covered. This person needs to be in charge and responsible for getting things done -- I'll say this again, it is imperative that we get going on building our RE pipeline immediately.

Business development goals -- goals 18 P[ersonal] L[oans] per FTE / 2 R[eal] E[state Loans] per FTE -- look at your budget that just came out -- this is very do-able -- you have a great staff but don't let them get on cruise -- keep the hammer down! Here are some employees who can take a look at some larger deals -- Brenda Huskey... Donna Reeves -- I want you to be in touch with your teams 2 or 3 times a day to keep them motivated and focused on getting results. -Jerry Cline, Supervisor, District 04

"This material is property of Washington Mutual Finance Corporation or its subsidiaries, is confidential, and is presented for internal use only."

What Citigroup wants -- and demands and brings about -- is the pushing of loans. It's not a matter of whether the customer wants or needs to have their loans refinanced -- quotas are set, numbers are built up, often by tricking and deceiving customers. Hear Leo roar! Meanwhile, indicative of CitiFinancial's lack of interest in compliance, we can report that Rosie Collins, an employee previously found to be packing insurance, is now... back on Broadway! (At the Broadway office in Knoxville, TN, that is -- and as branch manager). Because insurance packing is what CitiFinancial is looking for. There will be further reviews of performance, on Broadway and off... To the East, it's reported that Citigroup is stalking a $1 billion stake in KorAm bank in Seoul...

Update of February 9, 2004: While Citi's executives pitch credit cards in China, and make passes at Deutsche Bank and others, the subprime dirty work continues: case in point is Tennessee. Until last week, that state's governor, Phil Bredesen, was pushing for anti-predatory lending legislation, the Tennessee Home Loan Protection Act. Then, following the OCC's preemption announcement, Gov. Bredesen gave up, and has decided instead to focus on mortgage brokers. Therefore, even non-bank lenders will escape scrutiny. The result? Last week, the Tennessee Department of Financial Institutions talked tough to a mortgage broking company, specifically about a jocular marketing flier which announced, entirely accurately, that CitiFinancial is subject to a predatory lending settlement with the Federal Trade Commission. DFI Commissioner Kevin Lavender, previously an employee of SunTrust Bank, doesn't like brokers bad-mouthing subprime lending companies, at least not CitiFinancial. Meanwhile Commissioner Lavender has refused to release any information about consumer complaints against CitiFinancial or Washington Mutual Finance Group -- even a summary or mere enumeration of complaints. So who's being protected? The answer: CitiFinancial...

Update of February 2, 2004: A new regime at CitiFinancial? Documents provided to Inner City Press last week include a letter from CitiFinancial's general counsel (and ex-Maryland regulator) Marry Louise Preis, purporting to respond to issues ICP has raised. Interestingly, neither Ms. Preis nor anyone else at Citi saw fit to send a copy of this purported response to Inner City Press, or any other commenter. Ah, transparency...

Update of January 26, 2004: Still flowing in, responses from state regulators regarding Citi - Washington Mutual Finance Group. From Baton Rouge comes a letter, from Louisiana Commissioner of Financial Institutions John D. Travis, stating that Citi filed no WaMuFi-related application, but that ICP's other requests "will be taken under consideration by me." The state's chief examiner is cc-ed, so we'll see. Meanwhile last week, Citi's CEO Chuck Prince, tearing himself away momentarily from his new interest in thorny green problems, said that the purchase of the subprime WaMuFi -- with a predatory lending jury verdict against it, and along with rank sexual harassment -- is just the type of acquisition that Citigroup will be looking to make in 2004. Great...

Update of January 20, 2004: We focus this week on what it is, exactly, that Citigroup is acquiring along with Washington Mutual Finance Group. WaMuFi's operations in Mississippi, where it is subject to a $70 million predatory lending jury verdict, were cynically (and quietly, until exposed) excluded from the deal. Now, Inner City Press has been made aware of a sexual harassment lawsuit filed earlier this year against WaMuFi, branch manager Clarence Porter and other management at Aristar and its successors (i.e., Citigroup). We'll first quote from the Complaint, then add details from a recent ICP interview with the plaintiff, Glynda Shealy:

Plaintiff was first hired by [WaMuFi] on or about August 26, 1988... During Plaintiff's employment, here supervisor, Clarence Porter, made repeated unwanted advances of a sexual nature to the Plaintiff, including, but not limited to, inappropriate graphic sexual comments and actions. These actions were uninvited, unwelcomed and resented by the Plaintiff.

ICP note: these actions, the plaintiff has told ICP, included Clarence Porter putting a lion sock-puppet "on his, uh, private area" and ordering the plaintiff to "pet my Leo until he roars." When complaints were made up the chain of command, nothing was done. Ms. Shealy (who thankfully is not subject to any gag order, since Citigroup due to the above-recited never "acquired" her) also states that WaMuFi engages in predatory lending, including selling overpriced credit insurance that is not requested, and charging 24% interest even if the borrower has a pristine credit history. This, is what Citigroup is acquiring.

Update of January 12, 2004: Citigroup's lobbying spending for the first six months of 2003, $4.6 million, was sharply up from full-year 2002 ($5.4 million). Trying to avoid the repercussions of Enron, et al, sure. But also lobbying against state anti-predatory lending laws... Despite its loudly-claimed reform, Citigroup's involvement in the Parmalat scandal is telling. Citi is being questioned about Buconero, or "black hole," an offshore finance company Citi set up in 1999 in which it owned 51 per cent and Parmalat, through a subsidiary, 49 per cent. Parmalat booked the $137 million deal, renewed in 2001, as equity, but some now claim it should have been recorded as debt. Despite the Enron-like smell, Citi claims that its role in Buconero was "appropriate." Oh, really?

Lost in the Comptroller of the Currency's preemption order last week was the fact that, even when national banks apply to the OCC to set up these subsidiaries, the public notices given in the OCC's Weekly Bulletin are incomprehensible: there's no way to know what is being applied for. A Citi example:

OPERATING SUB/ ACQUISITION OF EXISTING SUBSIDIARIES 2003ML080018001461 CITIBANK, NATIONAL ASSOCIATION 399 PARK AVENUE NEW YORK CITY NY 10043 NEW YORK COUNTY RECEIVED 12/29/2003 PROVIDE SERVICES TO BANK/AFF

What is it? There's no way to know. And since the applicable comment periods run out before the OCC responds to FOIA request for copies of applications, the public must either comment blind, or just let it slip on by, and place faith in the OCC to regulate Citigroup...

Update of January 5, 2004: Citigroup, in a series of Nov. 24 letter mailed to regulators in 25 states, claimed that it would be consummating its proposal to acquire Washington Mutual Finance Group by or near the end of 2003. Having commented to these regulators, and having seen no response to regulators by Citigroup, this is hard to imagine. Most recently, the California Department of Corporation has disclosed fraud complaints against CitiFinancial Mortgage Company, business practices complaints against CitiFinancial Services, Inc., and, strangely, complaints in 2003 against ex-Associates, now CitiFinancial "Transouth Financial Corporation."

Update of December 29, 2003: Inner City Press last week received from the North Carolina Commissioner of Banks a letter claiming that his Office "does not have jurisdiction over" the proposed sale of 37 WaMu Finance offices in North Carolina to CitiFinancial. We disagree, and have replied to that effect. (South Carolina, for example, states that licenses can be transferred if the acquirer, even if already licensed, can past character and fitness tests and show advantage and convenience to the community -- all dubious, for a predatory lender). The NC letter also claims that most consumer complaint information is confidential under NC law -- which contradicts detailed information ICP was provided with by the NC AG's Office. But Banking Commissioner Smith provides a break-down of complaints in NC -- there are more complaints over the past three years against CitiFinancial than WaMu Finance, particularly with regard to consumer (non-mo


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1812

New bank born in New York

In 1811, a group of merchants takes the first steps towards setting up a new bank to help New York compete with rivals Philadelphia, Boston, and Baltimore

As debate on the renewal of the Bank of the United States charter continued into 1811, some New York merchants who were aligned with U.S. President James Madison applied to set up a new bank. Noting that it was easier to do banking in Philadelphia, Boston, and Baltimore than in New York, they petitioned the state assembly on February 11, "praying to be incorporated as a banking company." They had to wait over a year to see their wishes fulfilled. The first setback came on March 22. Vice President George Clinton's faction in the state assembly defeated the petition. When it reconvened in 1812, the assembly then faced petitions for the establishment of two more banks from merchants aligned with Clinton and associates of the former Bank of the United States. Enter one Samuel Osgood, elder statesman. He had a plan. The state lawmakers would support the original petition from 1811. He himself would be appointed president of the new bank. The original merchants aligned with Madison would secure half the remaining seats on the board, while the rest would go to the new group of merchants who supported Clinton. Now with broader backing, the charter sailed through the state assembly and, on June 16, 1812, City Bank of New York came into existence. Though Clinton had died of a heart attack three months earlier, his supporters now controlled almost half of the board of the new bank in his home state. With the passing of the charter, the 200-year story of Citibank began.


1812

Bank wins depository status

City Bank is rewarded for helping finance the U.S. government's effort in the War of 1812 against Britain

From 1812 to 1814 the United States and Britain were at war. Congress had declared hostilities in 1812 following tensions with Britain over America's trade with France. In the summer of 1814, British troops captured Washington D.C., the nation's new capital. They set fire to several public buildings, including the White House and the Capitol. The backdrop to these dramatic events was the French Emperor Napoleon's vision of his country's global dominance, which was defeated - at least temporarily - at the hands of Britain and its coalition partners Austria, Prussia, and Russia in the spring of 1814. Napoleon's forced abdication and brief exile to the Mediterranean island of Elba strengthened the position of Britain, which was able to divert increased resources to the conflict across the Atlantic (Napoleon escaped from Elba, to be finally defeated at the Battle of Waterloo in 1815). During the war, the United States' currency and treasury bills were losing value, trade was languishing and businesses failing. In mid-July, City Bank of New York appointed a committee of directors to "make proper arrangements for the removal of the books, cash etc., belonging to the bank, in case of the invasion of the city by the enemy." A separate committee comprising William Irving, John Swartwout, and Samuel Tooker was later set up to cooperate with other banks and "prevent the export of specie to the enemy." Following the British invasion of Washington, New York City's banks suspended gold and silver payments on August 31, a day after banks in Philadelphia did the same. As hostilities began winding down towards the end of 1814, City Bank lent the federal government $200,000 to help it meet interest and amortization payments on its debt. The bank had already lent $500,000 to the underwriter of a government bond issue earlier in the year and had also subscribed to war bonds in 1813. In exchange, it was designated as a government depository, receiving a third of all federal balances held in New York.


1813

First City Bankers well-connected

The 15 founding directors of the bank are a microcosm of New York commercial life in the early 19th century

Apart from the first president, Samuel Osgood, the other 14 founding directors of City Bank of New York represented a cross-section of New York commerce. William Few was a former director of the Bank of the Manhattan Co. and became president of City Bank when Osgood died in 1813. Few was succeeded in 1817 by Peter Stagg, a fellow founding director who worked as the bank's cashier in the early years. Abraham Bloodgood, another original director, was a rich leather merchant and politician. He was most likely related to Thomas Bloodgood, a wine merchant who ran the bank from 1832 until 1843. The family was of Dutch origin, and they owned a Long Island plant nursery. William Cutting controlled the Brooklyn Steamboat Co. William Irving was a partner in the auctioneering firm Irving & Smith, which he founded with his father, a veteran New York wine merchant. He was a brother of Washington Irving, author of Rip Van Winkle, published in 1819. Among the more swashbuckling original directors was paint-and-dye merchant John Swartwout. He was active in securing funding for the construction of the Erie Canal, completed in 1825, which connected the U.S. heartland to New York City and the shipping routes to Europe. Another was grocery owner Samuel Tooker, who became directly involved in the War of 1812. The board members included Benjamin Bailey, a director of the Columbian Insurance Co. and one of the first directors of the Farmers' Fire Insurance and Loan Co. Then there was Isaac Pierson, a doctor who later became a New Jersey congressman, and Ichabod Prall, brother of one of the wealthiest New York merchants in the late 18th century. Grove Wright was a merchant who served on the boards of the Merchants Fire Insurance Co. and the North River Insurance Co. The other founders were William Furman, possibly related to Gabriel Furman, who was involved in New York politics with Swartwout; Jasper Ward, a director of the Phoenix Insurance Co.; Osgood's son-in-law John Norton; and Henry Fanning, who defaulted on a loan from the bank. Norton and Fanning were on the board for only a year.



1820

A valuable client


John Jacob Astor strongly opposed renewing the charter of the Bank of the United States in 1811. For reasons that are not entirely clear, the bank had closed his account and refused him further credit. Two decades later he was a customer and then, records suggest, rescuer of City Bank, by which time most of his fortune was in real estate. Astor also held shares in Farmers' Loan and Trust Co., which would become closely associated with City Bank as the century progressed. When it was published in 1845, three years before Astor's death, the sixth edition of Wealth and Biography of the Wealthy Citizens of New York City estimated Astor's wealth at $25 million.


1822

52 Wall Street


City Bank's home, originally 38 Wall Street, was renumbered as no. 52, and rebuilt in the 1840s. The image on the left is the facade as it appeared after the remodeling. The photograph of Wall Street taken toward the end of the 19th century (right), shows on the extreme right the building as it looked after another upgrading in the 1860s. By this time Trinity Church was already being dwarfed by the tall office buildings of the financial center.


1824

Quaker mariners at the helm


The Quakers were a religious group with a history reaching back to the 17th century. They believed in direct communication with God without the need for clergy as intermediaries. Among their members was William Penn, founder of the Province of Pennsylvania. The Quakers became active in 19th-century America as social reformers. City Bank president Isaac Wright brought to the bank's board other prosperous Quaker merchants, including Benjamin Marshall and William Fox. Marshall, who served as a director for three years, was a wealthy Englishman and, like Wright, one of the co-founders of the Black Ball Line. His brother Joseph was involved with the New York Mills cotton business. Fox would later become president of New York Gas Light Co.; he remained on the City Bank board until 1861.


1824

New team puts bank on more solid footing

Incoming management helps City Bank achieve temporary stability; a wealthy customer brings in funds and a talented new director

After failing to diversify its client base and allowing excessive borrowing by some directors, City Bank suffered so great a fall in its share value by 1824 that a merchant by the name of Charles Lawton stepped in to restructure the bank. That year he acquired a controlling interest; by July 1825, he had convened a new board of directors to whom he sold his shares in the institution. The new team included some prosperous Quaker merchants who put the bank on a more solid footing. Among the board members elected by Lawton in 1825 was Isaac Wright, a leading importer of British textiles, and a Quaker. In 1827, Wright became president of City Bank and remained in that position for over five years. Meanwhile, the Industrial Revolution, which had built up steam in Britain in the previous century, was spreading across North America and much of continental Europe. Despite the new blood, City Bank was still struggling to take full advantage of the economic boom that included the arrival of the railroad in the 1830s. Although Philadelphia remained the country's main banking center, the New York metropolitan region was now competing with both Philadelphia and Boston as an industrial hub. To maintain lending to its directors, City Bank diversified its deposit base and so built up its correspondent relationships with other banks. Such funds were volatile, however, leaving the bank particularly vulnerable when the Bank of England raised interest rates sharply in 1836, draining foreign exchange from the United States and triggering a slump in British demand for American cotton. Cotton merchants were left with unsalable inventories, and their banks with bad loans. In the consequent Panic of 1837, City Bank teetered on the brink of failure. It did not fail, due to the suspension of gold and silver payments by the banks and, records suggest, financial support from John Jacob Astor. A German immigrant, Astor had become the United States' first multimillionaire, earning a vast fortune from trading in furs, and then making investments in Manhattan real estate. Astor's representative, soon appointed to the board, was Moses Taylor. Few appointments were more significant in the bank's history. Taylor was at the helm for several decades.


1825

New president brings proven expertise

Gorham Worth, a career banker, scholar, and poet, becomes a "pillar" of City Bank, raising it to new prominence

Gorham Worth was the first president of the bank to have a purely banking background. Born in Hudson City, New Jersey, in 1783, Worth joined the Bank of Hudson as a clerk, before becoming cashier at Mechanics and Farmers Bank of Albany in upstate New York. Dreaming of an early retirement, he moved west but grew so bored with the "vacuum of mind" and "monotony and sameness of routine country life" that he took a job as cashier for the local branch of the Second Bank of the United States in Cincinnati, then little more than a village. After the death of his wife's sister, Worth resigned and moved to New York, where he got a job as cashier at the Tradesman's Bank in 1823. He joined City Bank as cashier in 1825, assuming the presidency two decades later, in 1843. Worth was "very much respected and was for many years the main pillar of the City Bank," according to a chronicler of the period who credited him with raising the bank to the top echelon of New York banks. "He was an extraordinary man," the chronicler recalled. "I well recollect entering the bank at various times, and seeing him sitting at his desk, with his back towards the door, writing, and yet he would call me by name as if knowing me by instinct or by sound of step ... Worth was not only one of the best informed and most able financiers in the country but he was a ripe English scholar, a wit and a poet." The New York Evening Post agreed. In an obituary following Worth's death in 1856, the newspaper wrote, "He frequently employed his leisure hours in literary composition, and his productions in prose and verse, though not often allowed to appear in print, were handed round among his friends and read with pleasure."



1833

Taylor and Pyne light up Manhattan

Leading figures in City Bank help lay the foundations of a great utility company; Percy Pyne becomes bank president

Many companies in the industrial and financial empire of Moses Taylor and his associates effectively became clients of the bank. One of the first was Manhattan Gas Light Co., founded in 1833. Eight years later, Taylor joined the company as a director and became active in its management. By 1848, it was America's largest gas company. Taylor eventually became the main shareholder and started acquiring shares in the rival New York Gas Light Co., probably at the invitation of William Fox, a fellow City Bank director who later became president of New York Gas Light Co. When newcomer Metropolitan Gas Light Co. later appeared on the scene, Manhattan Gas Light countered the competitive threat by acquiring an interest in its rival as part of a market-sharing deal. Taylor himself invested in Metropolitan Gas Light and became a director of New York Gas Light, thus bringing the entire New York gas-lighting business at one stage under his influence. When Moses Taylor died in 1882, he was succeeded as City Bank president by his son-in-law Percy Pyne, a British immigrant whose father had been a seal-skin broker on Wall Street. Pyne spoke Spanish and had been Taylor's right-hand man since becoming a partner in his trading company in 1849. Pyne married Taylor's daughter Albertina five years later. A director of City Bank since 1869, Pyne managed not only the bank but also Taylor's entire business empire. His first priority as president was to consolidate the gas sector in New York. It was becoming increasingly competitive with new entrants and technologies. These now posed a threat to the Taylor family gas investments, and Manhattan Gas Light in particular. In 1879, the work of the inventor Thomas Edison showed that the new incandescent electric light bulb was likely to replace gas lighting in the long term. The gas companies responded by refocusing on gas sales for cooking and heating. In 1882, a company called Equitable Gas Co. disrupted the market with a more efficient gas manufacturing process, backed by William Rockefeller and John Archibald of the Standard Oil group. Pyne responded in 1884 by unifying the gas light companies in which he had an interest into a single entity, Consolidated Gas Co. of New York.


1837

Commodity specialist joins board

A successful New York trader with a focus on Latin America, Moses Taylor helps broaden City Bank's client base and becomes bank president

Moses Taylor joined City Bank's board during the Panic of 1837, which was triggered by an effective hike in British interest rates. Although detailed records are lacking, it is likely that he came to the bank as the representative of German-born millionaire John Jacob Astor, who employed Taylor's father as his business manager and appears to have been a customer of the bank in the early 1830s. Although the evidence is not definitive, it suggests that Astor initially supported City Bank financially and then extended further aid to the younger Taylor in his new position as a director. "[Taylor's] connection with the Astors has brought gold to his coffers," according to one account published in 1845. Another account published in the 19th century stated that Astor "always backed up Moses when he needed aid." When he joined the board at the age of 31, Taylor was already a prominent New York merchant. After working as an apprentice with leading Latin American shipping merchants G.G. and S.S. Howland, he had set up his own firm to import sugar from Cuba in 1832. The Great Fire of New York destroyed its warehouse in 1835, but the firm quickly recovered and was very successful. It soon expanded into trading other commodities, such as pineapples, limes, and tobacco, and invested in ships to carry cargo between Havana and other Latin American ports. After becoming a director of City Bank, Taylor was invited to invest in companies run by fellow members of the board . The board was then headed by Thomas Bloodgood, a wine merchant of Dutch origin and also New York agent for the family plant nursery on Long Island. Taylor then invested in companies at his own initiative, asking associates in these ventures to join the bank's board. Taylor spent 20 years as a City Bank director before succeeding Gorham Worth as president in 1856; he remained in that post until his death in 1882. He extended his business empire, using the bank as a treasury for his own enterprises.



1841

City Bank, provider of liquidity


City Bank, the eighth-oldest bank in New York, and thus designated no. 8 in the clearing house, was well placed to shield clients during panics. Under Moses Taylor the bank became a vehicle for monitoring and controlling the companies that made up his industrial empire. For deposits, all companies had to keep their principal account with City Bank. In exchange, the bank would extend short-term credits to them as needed. By taking deposits from those with temporary cash surpluses and lending to those with temporary deficits, Taylor was fulfilling the treasury functions of the bank he controlled. It was a provider of liquidity at all times to himself and his companies, the bank's clients. The bank adopted a policy of "ready money," stressing liquidity and investing in call loans as a secondary reserve. It avoided volatile sources of funds. Taylor ran the bank so conservatively, by keeping large amounts of surplus cash, that City Bank was consistently able to fund its clients even during the financial panics that afflicted Wall Street. Clients were shielded from insolvency, and the bank itself was protected from possible failure. It was this conservative policy that made City Bank of New York one of the strongest of the city's banks in the second half of the 19th century. The bank's deposits rose in each of the financial panics during this period, while the average deposits of New York's other banks fell.


1843

America's first trust company


In 1843, when Gorham Worth assumed the presidency of City Bank, Moses Taylor became a director of Farmers' Loan and Trust Company, founded in 1822 as the first trust company incorporated in the United States. He had been a shareholder since 1838. The relationship most likely arose from Taylor's connection to John Jacob Astor, who also owned shares in the company. After Astor died in 1848, records suggest that Taylor may have taken care of the Astor estate through the trust company. Taylor later acquired a controlling interest and eventually became chairman of the executive committee, allowing him to use the company to provide a wide range of financial services to his broader business interests. For bond issues by companies affiliated with Taylor, for example, Farmers' Loan and Trust not only invested in the securities but also acted as trustee and paying agent. The close relationship between bank and trust company lasted for many decades, culminating in a merger of the two companies in 1929.



1861

City Bank finances Union cause

Moses Taylor, as president of City Bank, leads banks' support for Abraham Lincoln; the bank acquires a national charter and changes its name

The American Civil War (1861-1865) occurred after 11 southern states declared secession from the United States and formed the Confederate States of America ("the Confederacy") to fight for independence. The contentious issue was the expansion or restriction of slavery. In the first major battle of the war, the Confederates of the breakaway southern states defeated the Union forces of President Abraham Lincoln in the First Battle of Bull Run in eastern Virginia in 1861. Lincoln soon sought financial assistance from a group of bankers in New York, Philadelphia, and Boston. City Bank president Moses Taylor, spokesman for the group, announced that the banks would subscribe to a $50 million gold loan, with City Bank itself participating. As the war progressed, confusion arose over the thousands of different banknotes in circulation. Congress attempted to develop a uniform national currency by passing the National Bank Act in 1863, which was superseded by another law in 1864. City Bank gave up its state charter in 1865 and became a national bank. To meet federal requirements, it agreed to several conditions: a minimum capitalization of $200,000; no branching; securitization by federal bonds; and retention of 25 percent of its capital as reserves. It could not offer mortgages or exercise trust powers. The benefits, however, outweighed the constraints. National City Bank of New York (as it was renamed in 1865) became a depository for the federal government and began to accept the required reserves of national banks in other cities, giving it the wherewithal to become a bankers' bank. Adding "National" to the name also increased its prestige, indicating that it was able to meet the U.S. government's most stringent requirements. The new name appeared on banknotes of various denominations up to $1,000 that would remain in circulation until 1935.


1866

Transatlantic Cable


Moses Taylor was one of the original investors in the New York, Newfoundland, and London Telegraph Co., founded in 1854 by Cyrus West Field, a successful young businessman who is credited with laying the first transatlantic cable. Taylor was treasurer of the new company and a director. The first cable was completed in 1858 but soon broke down. After interruptions caused by the Civil War between 1861 and 1865, three more unsuccessful attempts were made. The company finally succeeded on the fourth attempt, in 1866, bringing New York into virtually instant communication with London. Field and his associates also founded American Telegraph Co. - this became the biggest telegraph operator in the East, with lines from Maine to Louisiana. Its only major rival was the Western Union Telegraph Co., which was growing its network westward to the Pacific, centered on the Mississippi Valley. Western Union later merged with American Telegraph, giving it a dominant role at the American end of the transatlantic cable. After the merger, Taylor became a Western Union director, a position he would hold for the rest of his life.



1890

Rise of cotton-broker James Stillman

Marking a new era, an influential businessman becomes the bank's new president, taking the bank into a period of rapid development

A native of Connecticut, Charles Stillman moved to Mexico in 1828 and built up a successful business empire spanning cotton, real estate, and silver mining. When Mexico was forced to cede Texas in 1848 after a two-year war with the United States, Stillman helped found the border settlement of Brownsville. Stillman also set up the first steamboat company on the Rio Grande. By placing ships on the Mexican registry, he was able to export cotton throughout the Civil War (1861-1865). Stillman was a long-time National City Bank client. In 1870, his business partner Benjamin Dunning became a director of the bank. When Dunning died in 1890, Charles Stillman's son James took the seat on the board. So began the National City Bank career of a man who was to have a profound influence on the bank's development. Shortly before his death in 1882, National City Bank's Moses Taylor invited James Stillman to take part in several ventures, notably the reorganization of Houston and Texas Central Railroad, of which Taylor was a director, along with New York lawyers William Phelps (a National City Bank director from 1869 to 1894), and William Dodge of Phelps, Dodge and Co. (whose son Cleveland served on the bank's board from 1889 to 1926). Taylor's immediate successor as National City Bank president, his son-in-law Percy Pyne, also cultivated James Stillman. As his health deteriorated, Pyne asked Stillman to help manage two institutions key to the Taylor family business. In 1889, Stillman duly became a director of Farmers' Loan and Trust Co. Then, when Pyne resigned as National City Bank president after a stroke in 1891, the bank's board elected Stillman his successor. Pyne remained on the board as a director until his death in 1895, allowing for a smooth transition at the helm of a bank which, for half a century, had been largely dominated by a single family. The choice of Stillman was prescient. On his watch, the bank grew so rapidly that it moved into a headquarters building the size of a city block, was the first bank in the United States to have $1 billion in assets, and started a foreign department that set the stage for its overseas ventures.


1893

National City Bank forges investment bank alliance

A railroad refinancing opens up new strategic opportunities

In 1882, when Moses Taylor died, the customer base of National City Bank consisted largely of companies such as sugar merchants, cotton brokers, coal mines, gas utilities, and southern railroad companies. In the general character of its business, the bank was not very different from its major competitors. It also looked after the fortunes of railroad baron Cornelius Vanderbilt and, especially, Taylor himself. Yet, it was still relatively small. When James Stillman became president after Percy Pyne's resignation in 1891, it had only three officers (the president himself and two cashiers) and a handful of staff. Under Stillman the bank continued to function as a treasury for companies in the Taylor empire, and he began using the bank to support his own business activities through Union Investment Co. After Union Pacific Railway went into receivership in 1893, National City Bank seized a chance to break into the big league of investment banking. When an attempt to recapitalize Union Pacific was abandoned amid political uncertainties, the task then fell to Jacob Schiff, of investment bank Kuhn, Loeb and Co. Schiff turned to Stillman to help out on the commercial banking side. To cover the costs of the Union Pacific workout, Stillman committed $200,000 of his own funds to an initial bond issue raising $10.5 million, while National City Bank itself subscribed to $250,000 in a subsequent issue for $3.5 million to meet coupon payments on Union Pacific bonds. Overall, Schiff and Stillman arranged nine bond issues, underwritten by Kuhn, Loeb and Co. to raise $105 million over the subsequent three years. Stillman's personal investment in these bond issues amounted to $5.8 million, which was even more than the $3.6 million committed by stockbroker and railroad investor Edward. H. Harriman and almost as much as the $6.5 million subscribed to by Kuhn, Loeb. National City Bank invested $1.8 million and acted as agent to transfer the funds to government.


1897

New forex department for clients with operations abroad

Foreign business requires a new kind of service; correspondent links forged overseas

By the end of the 1800s, some of the large corporate clients of National City Bank conducted much of their business outside the United States. Among them were Standard Oil (particularly strong in China) and American Sugar Refining. In response to their needs, in 1897 the bank opened a foreign exchange department, offering to buy and sell drafts, make cable transfers and collections, and issue travelers' letters of credit. This was a relatively new type of business in the United States. Against this background there was growing European investor interest in dollar-denominated stocks and bonds, especially in London but also in Berlin, Amsterdam, and Brussels. As to capital markets, National City Bank acknowledged that London was still the undisputed leader, notwithstanding the growing importance of the New York, Paris, and Berlin bourses. One of the first big transactions of the new foreign exchange department came in 1899, when the bank received a $5-million deposit from the United States Treasury. This amount was to be credited to Spain as part of a $20-million payment for the Philippines under the treaty ending the Spanish-American War. By 1912, National City Bank had correspondent banking relationships with 132 banks worldwide and deposits with them amounting to $6 million. The foreign exchange department drew many recruits from Europe. In 1907, there were individuals from Austria, Germany, the Netherlands, and Poland. Departmental manager John Gardin had noted that in Europe even messenger boys had to have completed high school or at least graduated from a commercial college before being employed by a bank. They had to be fluent in at least one foreign language and be prepared to work for no pay at all for the first three or four years. "The men come out of their apprenticeship with a thorough business education, well fitted to the battle of life," he wrote. According to Gardin, Americans considering a career in foreign exchange needed a broad world view. They had to be "acquainted with ethnological conditions the world over," he said, with "a knowledge of political events, throughout the universe, besides a certain skill in mathematics, reaching far beyond the multiplication table."



1904

New opening in Panama


In 1903, Panama broke away from Colombia and became an independent state under U.S. protection. As part of this arrangement the United States took over the work on the Panama Canal, which had begun in the 1880s. On August 17, 1904, at the U.S. government's request, IBC opened a branch in Panama City, followed two years later by one in Colón, on the Atlantic side of the young country. IBC provided financing for Panamanian development and banking services for firms working on canal-related business. By 1916, the Panama Canal was in uninterrupted operation and international shipping provided a new client base for financial institutions.


1905

Currency in Shanghai


The Chinese currency system was complex. Each city had its own currency, so there was "foreign exchange" between cities. To add further complication, some foreign banks had the privilege of issuing banknotes. IBC was one of them. When National City Bank later absorbed the IBC branches, it became responsible for the payment of outstanding notes. This five-dollar banknote was issued by IBC in Shanghai, in 1905. Shanghai was IBC's first branch in China, opened in 1902, the same year as its branches in Singapore, Hong Kong, Yokohama, and Manila. Bombay opened shortly afterwards.


1906

Union Pacific gains national potential


By 1906, Union Pacific Railway had acquired shares in five railroads that now lay at the core of the National City Bank's activities. If these had been consolidated with its own lines to the West Coast, Union Pacific would have had a national network. The five railroads were the Illinois Central Railroad, the Chicago and Northwestern Railway, the Chicago, Milwaukee and Saint Paul Railroad, the Baltimore and Ohio Railroad, and the Pennsylvania Railroad. James Stillman took part in underwriting their bond issues and in several cases served as a director. The practice of acquiring other railroad companies allowed Union Pacific to become the largest rail network in the United States.


1908

55 Wall Street, symbol of solidity

National City Bank renovates a Wall Street icon for its new head office, where classical style cloaks new technology and banking innovation

For much of the 20th century, National City Bank's fundamental strengths were expressed in the architecture of its head office, 55 Wall Street. The original Merchants' Exchange, home to the Stock Exchange, stood here but was destroyed in the Wall Street fire of December 1835. In its place rose a new building, designed by Isaiah Rogers. For the main facade, stone columns weighing 45 tons and more than 38 feet long were floated on rafts from quarries in Quincy, Massachusetts, and hauled to the site from the wharf by 20 oxen. Each shaft was formed from one block of stone. In 1863, the federal government took over the building and it became the New York Custom House. In 1899, it was bought by National City Bank for $3,265,000. One of Stillman's colleagues commented, "The idea of occupying an entire city block with a bank was something that made everyone raise his hands in consternation." In 1907, the bank commissioned the leading architects of the day, McKim, Mead and White, to adapt the building. The old structure was so robust that dynamite was needed - the old plaster was stronger than the granite and brick. To make a hole in the ground floor for easy access to the basement, the contractors tried dropping a 15-ton block of granite from about 50 feet. It bounced. Workers found a cannonball embedded in a wall, a keg of gunpowder and more than 100 old-fashioned bombs, probably intended to protect the Custom House during the Draft Riots of 1863. Soon, above the original structure rose a four-story addition, faced with columns in the Corinthian style. At the heart of the new building was a modern steel frame. The old dome was carefully reconstructed in a style reminiscent of the Pantheon in Rome. The project was carried out with astonishing speed. Demolition began on December 3, 1907; the first new steel was laid on May 25, 1908; the building was completed on December 15, 1908. On December 19, some 400 employees helped carry books, papers, typewriters, adding machines, and other office materials across from 52 Wall Street between two lines of police. Over $70 million in cash and $500 million in securities were transferred by hand to the two-story steel vault, and the new building was opened to the public on December 21, 1908.


1909

Corporate clients push abroad


Among the companies that pressed National City Bank to open overseas branches was United States Steel Corp. Its lead bank, the blue-ribbon First National Bank of the City of New York, had no interest in international banking - its chairman believed U.S. banks did not have the necessary experience. So U. S. Steel turned to National City Bank, which had built up expertise in foreign-exchange trading over the previous decade. The steel giant promised to make a substantial deposit and E.I. du Pont de Nemours and Co. offered Vanderlip similar encouragement. Several National City Bank directors were linked with companies that would benefit from foreign branches and were major customers of the bank. W.R. Grace and Co. had extensive shipping, textile, sugar, and other interests on the west coast of South America, for example. International Harvester had sales outlets and agencies on that continent. Armour and Co. had acquired a meatpacking plant in Argentina that exported beef to Europe. Standard Oil had refining and distribution facilities across the world. It was the requirements of clients such as these that led the bank to expand operations abroad.


1909

Rise of Vanderlip, self-made man

Stillman steps back; a visionary new president sees potential in services for clients operating on other continents

At the end of 1908, after National City Bank had moved into its palatial new home at 55 Wall Street, James Stillman, the bank's president, decided to move out of the limelight and adopt a mainly advisory role, based at his home in France. "The completion of the new building is a fitting time for this step," he wrote. "We have erected a superb monument and laid the foundation for limitless possibilities." In January 1909, Stillman resigned as president and assumed the new position of chairman. His successor as president was Frank Vanderlip, who had worked for the bank since 1901, overseeing the establishment of the bond department. Vanderlip was particularly struck by the regional commercial potential offered by the Philippines, the Spanish colony acquired by the United States as part of the treaty ending the Spanish-American war in 1899. While there were already strong ties between the United States and Japan, Vanderlip wrote after the war, the Philippines could be an important gateway to other Asian markets including the Russian Far East. Frank Vanderlip was born in Illinois. He served an apprenticeship in a machine shop at 75 cents a day before landing a job as a stenographer at a Chicago investment house at $10 a week. He then took a one-year course at the University of Illinois and worked as a newspaper reporter, attending supplementary lectures at the University of Chicago. Vanderlip later became financial editor of the Chicago Tribune and, in 1894, bought a part interest in the Chicago Economist, where he served as associate editor for three years. When Lyman Gage, president of First National Bank of Chicago, was appointed secretary of the United States Treasury in 1897, he took Vanderlip with him to Washington as his private secretary. Within three months, Vanderlip was promoted to the position of assistant treasury secretary and was soon involved in the arrangement of a $200-million loan to finance the Spanish-American War. James Stillman was an acquaintance of Gage, and it was this connection that led to his hiring Vanderlip in 1901.


1911

Bonds go to the masses

The National City Company, an affiliate of the bank, breaks the stereotype and adopts modern methods in the sale of bonds

In 1911, National City Bank set up an investment affiliate. It was modeled on the First Security Co. founded in 1908 by First National Bank, a blue- ribbon corporate bank which National City Bank acquired almost half a century later. The National City Company initially served as a holding company for stakes in other banks in New York, Philadelphia, Boston, Washington, Indianapolis, and Kansas City, as well as Cuba, where it had an interest in Banco de Habana. In 1916, the affiliate acquired Wall Street securities firm N.W. Halsey and Co. with branches in four cities on the U.S. East Coast and two in Europe. Over the next three years, the National City Company expanded significantly. By 1919, it employed more than 1,650 people in 31 cities. It had more than 10,000 miles of telegraph cables, including the first transcontinental wire to be used exclusively by an investment bank. In due course, the affiliate acquired the bank's own bond department, creating the foundation of a global securities firm. The investment bank developed strong sales and marketing teams, which adopted modern advertising techniques. Until then "it was considered almost unethical for bond dealers to seek business in ways approved by general merchandisers," the president of National City Company, Charles Mitchell, told trainees in 1919. Partly buoyed by the government drive to sell war bonds to the public in 1917, the National City Company began merchandising corporate bonds like any other daily household item. As Mitchell said, "we took from the experience of successful manufacturers and distributors those pages which had spelled success for them lessons they had learned in advertising and publicity, and in industrial education." Mitchell praised the government for educating the public about investment during its campaigns to sell war bonds. "Government financing," he said, has provided a "liberal education for most people and materially benefited us." That education was partly thanks to National City Bank president Frank Vanderlip. Based on his experience in marketing Spanish-American war bonds for the Treasury, Vanderlip accepted a request by the New York Federal Reserve Bank that he should organize publicity for the first war-bond campaign in mid-1917.


1911

Advertising comes to finance

Following the trail opened up by its securities affiliate, National City Bank gets its message out to the world, stressing sound fundamentals

The establishment of National City Company as an affiliated securities firm in 1911 gave rise to advertising activities soon transferred to the bank itself. By 1919, National City Bank had a fully fledged publicity department. Advertising grew as the bank ventured into retail banking from 1921. Institutional advertising pre-dated direct advertising by many years. In 1904, the bank began to put out a monthly bulletin, United States Securities and Government Finance, written by vice president Frank Vanderlip, formerly assistant treasury secretary in Washington. Vanderlip had once been a financial journalist and had a natural flair for publicity. The initial audience for the bulletin were other national banks who bought government bonds. National City Bank later began to distribute it to foreign banks and translate it into Spanish and French. Other specialist publications included addresses by officers of the bank or studies on particular topics. "The press of the country has made liberal use of the publications of the Bank and these have had not a little weight in constructively molding public opinion," advertising chief Wells Sawyer said in 1919. After the bank began setting up foreign branches in 1914, a new monthly publication known as The Americas was launched. Although devoted primarily to trade and industry in Latin America and the Caribbean, it also covered Europe and Asia. Many articles were written by branch staff or representatives abroad. By the end of the decade, 50,000 copies of the new monthly were being distributed to correspondent banks. It was also sent to schools and colleges, including the University of London, which took 100 a month. As well as advertising its financial results in newspapers, the bank began to increase the amount of information in its regular financial statements. In 1923, staff produced 80,000 copies of an eight-page booklet containing the financial statement for March 31 plus lists of directors, executives, overseas branches, as well as a letter from president Charles Mitchell. The booklet reached destinations around New York on the morning of April 1, the same day as the financial statement appeared in the newspapers.



1912

Client relationship lasts over a century


When the International Banking Corporation, later acquired by National City Bank, opened a branch in the southern Chinese city of Canton (present-day Guangzhou) in 1906, its first client was a trading firm called Li & Fung. At a time when China's foreign trade was largely monopolized by British firms, Li & Fung stood out as the first export firm wholly owned by Chinese. It was founded in 1906 by Fung Pak-liu, a Hong Kong-educated schoolteacher who had recently returned to Guangzhou, and Li To-ming, a Chinese merchant whose family owned a porcelain shop. Business with the United States flourished as Li & Fung's product range expanded from porcelain to include bamboo, rattan, fireworks, jade, and ivory. The company relocated to Hong Kong in 1937 and became the British colony's top garment exporter. In 1973, it went public. Its new issue was oversubscribed 113 times, a record held by the company for 14 years. One of the sons of Fung Pak-liu was Fung Hon-chu, who took over as manager in 1937. At a celebration marking the firm's 75th anniversary, he spoke very positively of the firm's relationship with Citibank. The bank, he said, had supported the company in various ways over the years, with services including trade finance, deposits, foreign exchange, and letters of credit. Citibank "covers all the major cities of the world. ? With its support, we have been able to meet our customers' needs and ensure our own financial liquidity." As Li & Fung managing director, Fung Hon-chu appointed retired Citibanker Ho Chik-kong as a manager in 1969. The former senior officer at First National City Bank's Guangzhou branch had known Fung's father, one of the firm's two co-founders. In 1976, Ho was named as a director of a finance and investment subsidiary of Li & Fung, and later he became group managing director. By 2011, Li & Fung was a multinational group employing close to 37,000 people in 40 economies. Management had passed to the third generation of the Fung family, the Harvard-educated brothers Victor and William Fung. The company remains one of Citi's most longstanding clients outside the United States. As Li & Fung and Citi commemorated a century of partnership, Citi's Hong Kong country officer and Asia Pacific chairman Shengman Zhang said that the two companies enjoyed a "special relationship" that was strong and flexible enough to reach across time and generations. "Such strong ties can only exist where there is trust," Zhang said.


1914

Business blooms in Latin America

National City Bank's first big push overseas reflects the growth in international trade as war breaks out in continental Europe

As World War I was breaking out in Europe, Argentina was enjoying a trade boom. National City Bank's first foreign outpost, the Buenos Aires branch, opened in late 1914, was almost immediately profitable thanks in part to a large foreign-exchange business. National City Bank established ties with Banco de la Nación Argentina, the largest bank in Argentina, and opened accounts with both U.S. corporate clients and local companies. A second foreign branch was established in Rio de Janeiro, Brazil, in April 1915, with a sub-branch in Santos, the coffee-trading center. A second Brazilian branch came a few months later, in São Paulo. It was followed by a branch in Montevideo, Uruguay, and another in Havana, Cuba, which acquired Banco de Habana, partly owned by National City Bank chairman James Stillman. In 1916, branches were opened in the Brazilian city of Salvador (Bahia), the country's sugar-trading center, and the Cuban city of Santiago. National City Bank then entered Chile, its fifth country in Latin America, with a branch in Valparaiso, the country's main port, linked by railroad to Buenos Aires in Argentina on the Atlantic coast. The sailing time from Valparaiso to New York by steamer had just been almost halved by the completion of the Panama Canal in 1914. National City Bank gradually expanded its regional footprint to include branches in Venezuela in 1917 (where the oil boom had attracted many international companies which required financial services), and Peru in 1920. Its affiliate from 1915, International Banking Corporation (IBC), meanwhile established its own branches in Colombia in 1916 and the Dominican Republic in 1917. In 1922, National City Bank also acquired a controlling interest in Banque Nationale de la République Haiti.


1914

The Impact of World War I

Military service for male staff opens up career opportunities for women; the bank's president promotes the sale of Liberty Bonds

World War I broke out in 1914. The United States, after initial efforts by the government to resist involvement, entered the fray in 1917 following a sea-change in U.S. public opinion. While banking operations in combatant countries were adversely affected, in the early years of the war National City Bank managers focused their attention on the commercial opportunities presented by the disruption of European trade and its likely impact on the bank's overseas competitors, notably those in Britain. In 1914, chairman James Stillman offered his Paris residence to the French government for use as a hospital. He also offered 500,000 francs ($200,000) to France's president Raymond Poincaré to support orphans of those admitted to the Légion d'Honneur, the nation's premier official decoration. After America declared war on Germany, many male employees signed up for military service. Consequently, the bank started hiring female clerks in large numbers. Over six weeks in 1917, former librarian Florence Spencer and another assistant chief clerk interviewed more than 1,000 candidates. About 10 percent were accepted, given a week's training, and placed in various departments. Notably, the foreign exchange department received 45 women and the check desk 40. F.C. Schwedtman, the vice president who oversaw the bank's educational activities at this time, urged women working at the bank to be assertive. "From time immemorial, it has been man's place to go out into the world to hunt and collect and women's place to stay at home and prepare and take care of the things which the man has brought in," he told the women's association of the bank in May 1918. "The same policy, however, carried out in business, will not work. To be specific, the business woman must not let the man do all the acquiring of information and knowledge. She must not passively accept information which someone else gives her," Schwedtman said. "When some point comes up in connection with your job that is not clear, ask about it, study it until it is clear." Overall, 518 bank staff entered military service, nearly a third of the total. Among them was Katherine Hay Robinson of the foreign department, who was attached to the Army Signal Corps in France as a telephone operator. She was stationed at the Paris residence of President Woodrow Wilson during the Paris Peace Conference in 1919. Eight employees lost their lives in the war, as did 11 of the 78 men from the International Banking Corporation who saw military service.


1916

IBC pioneers trade finance in Asia

A Connecticut state-chartered bank caters to companies doing business in the Far East

The International Banking Corporation (IBC) was founded in Connecticut in 1901 by a group of businessmen seeking to promote trade with Asia following America's acquisition of the Philippines from Spain. The bank's state charter allowed it to do business anywhere except Connecticut. The founding president was Marcellus Hartley, owner of the Remington Arms Co. Other directors included corporate lawyer Thomas Hubbard, investment bankers Jules Bache and William Salomon, along with representatives of the Equitable and Metropolitan insurance companies. Hubbard, who had previously worked as financial officer for Southern Pacific Railway, assumed the presidency following Marcellus Hartley's death in early 1902. After opening a branch in London in April 1902, IBC established branches in rapid succession in Shanghai, Singapore, Manila, Yokohama, and Hong Kong. It also hired two traders from Deutsche Bank to develop its foreign exchange business in New York. By 1904, the Asian network had spread to Calcutta and Bombay, Kobe, Guangzhou, and Cebu. Additional branches were established in the Chinese cities of Beijing and Hankou in 1909. More followed in 1918 (Java, today part of Indonesia) and 1919 (Burma and China), and others later in China and Japan. IBC was a commercial bank. A large part of its success in China rested on maintaining a close relationship with multinationals operating in China, such as American Trading, Shanghai Telephone, Standard Oil, and British American Tobacco. It received the US government's special encouragement and support, which allowed it to broaden its branch network in the region and begin expanding its business. IBC's business originated with the local subsidiaries of the bank's corporate clients, rather than with their U.S. headquarters. Much of IBC's business was trade-related, such as financing exports of raw silk and tea from China and Japan, cotton and jute from India, and tin and rubber from Singapore. From the Philippines came exports of hemp, copra, sugar, tobacco, and coconut oil. IBC was also involved in the import trade, financing Chinese imports of silver from the United States as well as Japanese imports of cotton from India and wool from Australia. The 19th century had seen a flow of Chinese immigrants to the United States. They worked on the construction of the railroads, and they were a source of labor for agriculture and many industries. Their remittances were an important source of foreign exchange for China, and many of them flowed through the IBC branch in San Francisco.


1917

Vanderlip and the Liberty Bond


In May 1917, the staff magazine, Number Eight, declared: "LIBERTY is what the civilized peoples of the world are striving for. ... to this end has the federal government of the United States sought to enroll as subscribers each and every one of the citizens of this great DEMOCRACY in that gigantic offering - The Liberty Loan."
That same month, the Federal Reserve Bank of New York asked the bank's president, Frank Vanderlip, to organize publicity for the loan campaign. Given his earlier career in public service and public relations, Vanderlip was in his element and performed to such effect that in September he was asked by the U.S. Secretary of the Treasury to become chairman of the War Savings Committee. Vanderlip accepted the offer, taking an unpaid leave of absence from the bank. The experience of mass-marketing gained during the Liberty Bond campaign proved useful in later years when the National City Company under Charles Mitchell sold bonds in quantity to the general public.


1917

Merit becomes key to promotion

Appraisal systems are the basis for career progress; the City Bank Club is a center for education and social activities worldwide

In 1917, National City Bank abandoned the system of automatic salary increases at the beginning of January, relegating it to "the limbo of mid-Victorian business methods." From now on, salaries would be based on merit. At the same time, the bank announced a new staff appraisal system whereby all employees would be interviewed by an officer every four or five months. The new scheme was seen as an opportunity to address weak points in individual personnel records and to give staff the chance to air grievances in private. People were encouraged to take stock of their own work and try to see themselves as others saw them. The bank, however, was cautiously realistic in its approach, warning that this "occasional self- inventory" should not be taken to excess. "Too much introspection is as bad as too little," commented Number Eight, the bank's monthly staff magazine. In a speech at the Havana branch six years later, Charles Mitchell, who had become president of the bank in 1921, restated the bank's commitment to merit-based promotion. "I don't want to look outside of the National City Bank if we need a man to do a piece of work or a woman to take the head of some department ... I have asked the heads of department of this branch and I have asked them in New York and elsewhere to watch, and watch carefully, the work of each individual employee to the end that we may as rapidly as possible advance men and women according to their individual merit," he said. "I want you as individuals to help us build from within rather than from without." Mitchell said the bank also remained committed to bringing Cubans to New York for training. "We shall take on to New York more such men to the end that we may gradually elevate the standards of the Cubans who are in our organization as well as the Americans."


1918

National City Bank puts down new European roots

Despite war on the Continent, bankers see future business prospects

With the purchase of a controlling interest in International Banking Corporation (IBC) in 1915, National City Bank gained a European foothold through the IBC London branch, established in 1902. Although much of Europe was at war, National City Bank opened a branch in the Italian port city of Genoa in 1916. Before the United States entered World War I in 1917, U.S. representatives of the bank could still visit the territories of the "central powers" - the German, Austro-Hungarian and Ottoman empires, along with Bulgaria. The main motivation behind such trips was to assess likely postwar trade conditions, notably in Greece and Turkey, where companies such as Standard Oil and the American Tobacco Co. were active. With strong wartime demand from Germany, Turkey was also becoming an important producer of cotton. About 10 percent of the cotton crop was grown from American seed. The Brussels branch, opened in 1919 Bland Calder, secretary to the bank's vice president Charles Rich, visited the Turkish capital Constantinople (present-day Istanbul) as part of the War Relief Commission set up by the Rockefeller Foundation to help Turkish civilians. "We expected to find a dirty, poorly managed, disorganized city," Calder wrote later in the staff magazine. "We were agreeably surprised, however, to remark an air of good order throughout the city. In fact, if some of New York's streets were as clean as those in Constantinople, we could not complain." After war ended in 1918, the European network expanded with new branches in Brussels in 1919 and Antwerp, Madrid, and Barcelona in 1920 (the year in which National City Bank established a short-lived presence in the South African city of Cape Town). IBC, meanwhile, set up its own branch in Lyon in 1919. Two years later, National City Bank acquired the Paris branch of the Farmers' Loan and Trust Co., which had been set up in 1906. The bank's presence in northern Italy was expanded in 1925 with the opening of a branch in Milan. The European network was badly affected by World War II. It was not until Europe's recovery in the 1950s that it regained a more prominent role in the bank's overall operations.



1920

Veterans of the air

Senior National City Bank officers have links with the young aviation industry and become pioneers of passenger flight

Senior officers of the bank were no strangers to air travel in the 1920s. George Kurz spent considerable time flying in Europe while posted in Berlin as the bank's representative to Central Europe and the Balkans during the 1920s. He once accompanied vice president F. Charles Schwedtman on a three-and- a-half hour flight from Constantinople to Bucharest, which would have taken more than 36 hours by train. William Hoffman, another vice president, got a first-hand look at the latest German aeronautical technology in 1929. He flew from Barcelona to Genoa via Marseilles aboard the new four-engined Dornier R4 Superwal flying boat that had just been delivered to German and Italian airlines. Back in America the same year, National City Company vice president Joseph Ripley joined United Aircraft and other executives on a 10-hour flight between Chicago and Cheyenne aboard the new three-engined Boeing 80 aircraft. The flight was part of efforts to develop a route from Chicago to San Francisco. Ripley was also a director of Pacific Zeppelin Transportation Corp., an affiliate of Goodyear Zeppelin Corp. which began building the world's largest airship, the ZRS-4, in Akron at the end of 1929. National City Bank director James A. Stillman and vice president Joseph Durrell gained first-hand experience of the hazards of air travel. When their flying boat failed to return to their camp as scheduled during an Alaska hunting trip, they were stranded with little food for two weeks and had to be rescued by boat. The plane they had used to reach the isolated camp was lost on another flight.


1921

Landmark deals


In addition to its vast network of more than 30 offices across the United States and Canada, the National City Company had offices in London, Geneva, and Tokyo. The international presence in key markets soon yielded results. In 1921, the company introduced the first Australian borrower to the U.S. market by arranging a $12-million issue of 20-year bonds for the state of Queensland. The bonds were snapped up by investors in a few hours. Two years later, the company arranged a $19.9-million bond issue for Oriental Development Co., the Japanese government agency responsible for developing Korea, who had been annexed by Japan in 1910. The 30-year offering was the first dollar-denominated issue for a Japanese borrower in the United States. Among domestic deals, the company set a world record in 1923 when it teamed up with the Guaranty Co. of New York to arrange a $100-million issue of bonds and debentures for a leading copper and mining company. Proceeds of the deal, the largest industrial financing in the world at the time, went towards the company's acquisition of a majority stake in a Chilean copper company, which controlled the most extensive and one of the most valuable known copper reserves in the world. Proceeds were also used to acquire the capital stock of the U.S. brass company, which at the time was the world's leading manufacturer of copper and brass.


1921

The New York branch network expands

Through mergers, National City Bank acquires a number of branches and builds more, becoming a force in retail banking

In the early 1920s, National City Bank was making a conscious effort to build a retail business. The year 1921 saw the acquisition of the Commercial Exchange Bank, and three domestic branches as part of the bargain. One of these was the 42nd Street branch. Vice president Thomas Reynolds described the new approach to business there: "We are actively interested in individual accounts, balances of which average $500 or more, and are making a consistent effort to develop this type of business, along with the larger accounts that come from business houses." A second acquisition followed in the same year. The merger with Second National Bank, which was founded in 1863 and in which the Stillman family held a controlling interest, brought into the National City Bank network a branch at 28th Street and 5th Avenue. Second National Bank's core client base was the textile and other manufacturers located between 23rd and 34th streets. The year 1924 thus saw National City Bank represented by branches at 42nd Street and Madison Avenue; at 28th Street and 5th Avenue; at the Bowery branch; at 57th Street and 7th Avenue; and at 72nd Street and Amsterdam Avenue. The growth of the network did not stop there. Following a change in the law that allowed national banks to have full-service branches as long as they conformed to state law, by the end of 1929 National City Bank had 37 domestic branches in Manhattan, Brooklyn, Queens, and the Bronx, the fifth-largest domestic branch system in the country. Some of the branches were distinctive architecturally. The Art Deco-style former Canal Street/Broadway branch, which is still standing, was opened in 1927. It is not hard to see a family resemblance between this and its grander cousin in Buenos Aires, opened in 1929. Underlying this domestic expansion was the wish to offer every customer, in the words of the staff magazine Number Eight, "the same worldwide banking, investment and trust facilities that have been developed at Head Office, 55 Wall Street" and so make banking "as simple as buying a dress, a pair of gloves or a piece of furniture."


1928

Pioneer in Panama


In 1928, Elida Arias was appointed as subaccountant of the Panama branch of National City Bank, and so became the only woman among approximately 500 signing officers of the bank worldwide. This was particularly remarkable as, according to Number Eight, the staff magazine, "the feeling in Panama, as in all Latin-American countries, has, until recently, been strongly averse to women entering the business world, and ? because of the fact that Miss Arias was not forced by circumstance to earn her own livelihood." Arias joined the Panama branch when it was still part of the International Banking Corporation network. One of her co-workers was Miss Selma Arosemena, daughter of the president of Panama. According to Number Eight, she, like Arias, "wished to be graduated also from the more narrow confines of purely household duties."


1929

City Bank Farmers Trust Co.


City Bank Farmers Trust Company was a product of the consolidation of the trust organizations of Farmers' Loan and Trust Co. and National City Bank. The trust company, the oldest in America, was formed in 1822 by a charter granted by the New York state legislature. Until 1835, it was known as Farmers' Fire Insurance and Loan Co. From 1823 to 1835, it had quarters in the original Merchants' Exchange Building on Wall Street, until it was destroyed in the Great Fire of 1835. Moses Taylor became a director in 1843, and there had always been a high level of cooperation between the companies. The merger was ratified by the boards of both companies on June 29, 1929. The president of the new organization was to be the trust company's James Perkins, who was later to prove his worth as a steady leader of the bank during the Great Depression.



1931

Learning from the clients

Getting out of the office, young bankers of promise visit 40 industrial facilities during a trip that makes an indelible impression

The best understanding of U.S. industry was not to be attained by sitting in the office. That was the view of National City Bank. So it teamed up with the Thorne Loomis Foundation to offer several of its brightest young bankers a first-hand look at industry over the course of a six-week camping tour. Successful candidates had to have been with the bank for some time and were put forward by supervisors as being "men of promise and of demonstrated executive abilities." The tours were organized by the foundation, which was run by physicist Alfred Loomis and his brother-in-law Landon Thorne. The pair had recently teamed up to acquire investment bank Bonbright and Co. The first trip took place in mid-1931. Ten men between the ages of 18 and 25 took part, including future vice chairman Howard Laeri and Henry Lansing Clute of the foreign tellers department. Led by Bob Emison of the credit department, they set out in a specially equipped truck. Over the next six weeks, the men visited more than 40 facilities in 12 states, mostly in the South and Midwest. They met with senior managers of corporate clients and taking notes was compulsory. Although there were diversions such as flying in Detroit and visits to famous sites in Washington, D.C., the schedule was grueling. "The poor fellows were exhausted ... and the truck was not the speediest thing in the world," said Lewis Cuyler, who later ran the personnel department. "They went through hell with very little sleep ... Bob Emison was always getting them up early in the morning and with an early start it was packing in too much." Clute nevertheless had fond memories of the 4,350-mile journey. "It was a unique experience," he said. "In the six weeks, we saw steel mills, a cannery, wire manufacturing, tire manufacturing, a coal mine, a rayon plant, a chemical plant, a cigarette factory, a cereal maker, a textile mill, a glass factory. Those things certainly left an indelible impression on me and gave me a look at industrial America that I probably wouldn't have been able to obtain in the next 10 or 15 years just working at the bank."


1933

Banking in the Great Depression

The reassuring style of National City Bank's new chairman, James Perkins, suits the uncertain mood of the times

In 1933, the United States was struggling with its deepest economic downturn ever. Despite its size, National City Bank was not spared the massive runs on deposits that were taking place at banks across the country. According to James Perkins, who succeeded Charles Mitchell as the bank's chairman in 1933, average gross deposits fell from $1.26 billion in the week ending February 18 to $967 million in the week ending March 25. Speaking at the annual meeting of shareholders in early 1934, Perkins acknowledged that the situation had been "acute," but noted that by the end of 1933, deposits had partially recovered, to $1.12 billion. Four years after the 1929 crash, however, the Great Depression was still taking its toll on the bank. Operational systems had been reviewed, expenses had been reduced by more than $1.5 million, and executive salaries had been cut. Moreover, no management fund or other extra compensation plan for employees had been in place for three years. Since becoming chairman, Perkins had persuaded the board to set aside an additional $30 million as a contingency reserve and cut the dividend from the annual rate of $2 a share to $1 a share. Yet the bank was still profitable, especially the foreign branch network, which was maintained largely intact under Perkins' tenure. Perkins was not always a believer in overseas branches. During the bank moratorium of 1933, declared by President Roosevelt to prevent a bank run due to lack of public confidence, National City Bank's competitors predicted that the overseas branches would bleed the bank dry of funds. However, such was public trust in National City Bank, that during the closure in the United States the overseas branches showed a shrinkage of less than 2 percent in their deposits. One day, Joseph Durrell, head of the overseas division, showed a gloomy Perkins offers of assistance from friendly competitors, as well as the previous night's reserve sheets, indicating that the bank's cash balance abroad amounted to 73 percent of its branch deposits. At that moment, Perkins became a staunch supporter of the overseas division. Perkins reported, "Under anything like normal conditions the foreign branches make handsome earnings and contribute largely through their services to the building up of domestic deposits." Foreign exchange earnings were said to be particularly brisk in China, which used a silver rather than a gold standard for its currency and was largely shielded from the global downturn. Although the U.S. economy improved during the 1930s, it took more than a decade for the country's gross domestic product to return to its 1929 level.



1940

War returns to Europe

The early stages of World War II pose challenges for Citibankers in Paris and London, as they face invasion and aerial bombardment

The National City Bank business in France was one of the bank's more successful operations in Europe. Major U.S. clients of the Paris branch were Standard Oil, International Harvester, American Radiator and United States Lines. French clients included industrial companies in Lille and silk companies in Lyon. The main sources of income were commercial overdrafts, discounting trade bills, and foreign exchange. Harvey Gerry, who worked in both the Paris and Nice branches between 1931 and 1939, recalled that the bank was very competitive in this market. When German troops invaded France and advanced towards Paris in June 1940, the bank evacuated the branch and relocated to Le Puy, a small town in the mountains of south-central France, which was in the unoccupied zone. "Cash, securities, and files were transported in a truck," Gerry said. "Books, machines, and personnel were crowded into three other trucks." The trip took two days. Of 250 employees, about 50 found their way to Le Puy, where a new branch was set up at the Hotel Bristol, which also provided living quarters for much of the staff. Head office decided to liquidate the French business, although operations in Paris had to be partly resumed to contact those clients who were still in the occupied zone. After the bank had paid indemnities to employees and helped them find new jobs, the number of staff in Le Puy and Paris was progressively reduced to about 20 overall. Before two-way passes between the occupied and unoccupied zones were issued, Gerry recalled that one staff member was said to have crossed German lines in a mailbag.


1941

Women fill gap


As increasing numbers of male staff entered military service, National City Bank started to recruit more women. Women were already working as secretaries, stenographers, typists, and bookkeepers. Mid-1941 saw the hiring of female messengers. After five or six months, female messengers could become junior clerks and study shorthand, typing, banking, and English under the supervision of the personnel department. At the end of 1942, financial incentives were offered for women to study at commercial night schools. The bank teamed up with IBM to offer courses in operating machines to the bank's bookkeeping trainees. By the end of 1942, women accounted for 43 percent of the bank's workforce of almost 10,000, up from 23 percent at the end of 1940.


1946

Visual art serves the bank


After World War II, the bank began commissioning art by important U.S. artists (as opposed to designers) for use in advertisements. Among them were notable figures such as Charles Sheeler, Thomas Hart Benton, and Rockwell Kent. Titled "First in Worldwide Banking," and launched in 1946, this was the U.S. financial industry's first nationwide advertising campaign. It emphasized First National City Bank's extensive foreign capabilities and global expertise in key industries. The campaign lasted nearly a dozen years, and the original paintings formed the core of the company's art collection. By the late 1950s, the bank did own some other notable works inherited when it acquired other companies, but there was no collecting for its own sake. Then the advertising message shifted, and the bank began using art to localize itself within the communities it served. From around 1968, then-president Walter Wriston wanted to demonstrate the bank's relationship with the city in which it was founded. He invested in a New York-themed collection that ranged from an 18th-century Ratzer map of the city to grittier contemporary urban paintings by African American masters Romare Bearden and Jacob Lawrence. Wriston's personal favorite was a piece by the young Richard Estes, titled "Sloan's Supermarket," from the artist's first exhibition. During the 1970s, the city was nearing bankruptcy. First National City Bank's senior management took an active role in its turnaround. William Spencer, the bank's president, led community finance initiatives. Franklin Thomas, then CEO of the Bedford-Stuyvesant Restoration Corporation, was asked to join the board. At the time, Bedford-Stuyvesant was one of New York City's most troubled neighborhoods, and his experience helped the bank initiate "Profile of a City," a study of urban problems using the city as its focus. The bank became an active adviser on important city government bailout initiatives. John Reed, Wriston's successor as chairman, saw the potential for art in a different context. He completely restructured the floor where the bank's top leaders had their offices, treating all seniors - including himself - equally with respect to office accommodation. Reed's strategy was to promote an open exchange of ideas among the leadership. The core of the senior executives' "pod" was designed around a Japanese garden, where the team walked and communicated freely. He moved the dining rooms to the same floor, so that contact with clients occurred where the executives worked. The artwork that decorated the floor built on the collection formed by Walter Wriston. It included paintings from the advertising campaigns, with the addition of a number of other paintings and sculptures, as well as archival photographs reflecting the bank's global reach.


1947

Landmarks in transportation finance

Innovative thinking within the bank contributes to a revolution in the shipping industry, and is applied to big projects in other sectors

The Greek shipping magnate Aristotle Onassis grew his shipping business in the 1930s and 1940s on the basis of salvaging shipwrecked or mothballed freighters and cargo ships. He first became a client of National City Bank in 1931. The end of World War II was an opportunity for Onassis. In the United States, the Ships Sales Act of 1946 released a large number of vessels onto the market, including many of those known as Liberty ships. Onassis and his brother-in-law and rival, Stavros Niarchos, went shopping. Onassis came to National City Bank and became the first Greek to acquire ships with U.S. bank financing. As the global economy rebounded in the postwar years, there was more oil to be moved than there were tankers to move it. In 1947, the demand for fuel oil skyrocketed, and Onassis was able to charge a premium for transporting it. Onassis' style was to think big. The standard tanker of the day, the T-2, weighed 16,600 deadweight tons. He could see no reason why a tanker could not be nearly twice that size, so he commissioned a 28,500-ton tanker, one of the first "supertankers," which he christened the Olympic Games, and headed to National City Bank for financing. The ship was too expensive, however, to finance with the usual short-term loan. The Depression and World War II were uppermost in the minds of most of the bank's lending officers, and the idea of changing the way they were used to lending was tantamount to heresy. They suggested that he seek financing from insurance companies, who often made long-term loans. For short-term cash, though, Onassis came to the bank. A young man in the shipping department by the name of Walter Wriston was assigned to work with him. Between them, they pioneered a new kind of financing. The ship's charter, not its market value, became the collateral; the money earned by the charter was paid direct to the bank, which deducted interest and principal, and put the rest in the shipowner's account. For the first time, a lender was able to rely on the cash-generating potential of a piece of property. The new method accelerated clearance of the debt; Onassis owned the Olympic Games outright within seven years, rather than the expected 20. It was the work that Wriston did on this deal that first led management to single him out him as having top-management potential. By the mid-1960s, Onassis was able to launch a generation of very large crude-oil carriers, ships so big that his original supertanker, the Olympic Games, could almost have been carried on their decks as a lifeboat. Although this financing concept was revolutionary for its time, it caught on quickly and was soon being used to underwrite other big-ticket items, including railroad cars, skyscrapers, and aircraft.



1950

New hiring and training practices bring greater diversity

As society evolves in the 1950s and 1960s, so does the profile of the staff

In the 1950s, the personnel manager, Lewis Cuyler, encountered challenges that reflected the profound social changes taking place in the United States and elsewhere during the postwar era. New York State introduced anti-discrimination legislation. It allowed anyone with a grievance to take a complaint to a commission that would make representations to the corporation concerned, with a view to an informal solution. The bank's top management recognized the importance of the new law. Cuyler took his responsibilities seriously. On one occasion there was a shortage of stenographers in his department, and an African-American woman presented herself as a candidate. When her potential co-workers were consulted by their immediate boss about this possible appointment, they expressed reservations. Cuyler decided to talk to them himself, explaining the new law. "The two girls took the day off," Cuyler recalled, "and much to my delight, the day following they came in and told me, really enthusiastically, they would welcome this girl in the department, and would do everything possible to make her happy there." The applicant was offered the job. "She came in, was employed, and it worked out very well." Cuyler viewed the organization's approaches to such issues as very enlightened. "I think they do show the bank's general attitude towards personnel and problems we had, and some of the things we wanted to accomplish." By the 1950s the bank was beginning to employ a growing number of female officers. The recruitment of graduates, already established practice for several decades for men, was being extended to women and African Americans. Even in the mid-1960s, however, women were rarely employed in the bank's service overseas, and were not often seen in the officers' dining room at the bank's new headquarters at 399 Park Avenue. Walter Wriston is credited with fixing the dining problem, although it took longer for the bank to get comfortable with the idea of sending women abroad. The bank was active, however, in bringing local overseas officers to New York, starting in the early 1950s. Among the first was Tatsuo Umezono, later the first Japanese to be put in charge of the branches in Japan. Over the next decade, foreign officers brought to New York for training included a young Chinese-Singaporean banker named Wong Nang Jang, later the first Singaporean to be put in charge of the Singapore operation. When the bank's 11 Cuban branches were nationalized in 1960, many of the 100 local employees who left for the United States were employed in New York (others were hired by the bank in Puerto Rico and Ecuador). As Walter Wriston put it in typically direct terms after his retirement, "We hired brains and we didn't care what color you were. Talent has no borders." For Wriston, hiring outstanding people was the top priority. "All organizational structures are designed to be run by average people," he said. "If this were not so, all organizations would break down because most of us are average. If you have outstanding people, as we do, any organization will run at 150 percent of rate capacity."


1951

Bank supports Marshall plan


For three years immediately after the end of World War II, National City Bank operations in Europe were confined to two branches in London. It was not until mid-1948 that the bank reopened the Paris branch of the International Banking Corporation, its foreign banking subsidiary. This coincided with the setting-up of the Economic Cooperation Administration by the United States, to run its European Recovery Program for Western Europe. Under this initiative, later known as the Marshall Plan, National City Bank arranged a large number of commercial letters of credit for shipments to countries receiving U.S. government aid. By the time the program came to an end in 1951, the United States had channeled almost $13 billion to Western European countries and Turkey. The main recipients were Britain, France, and the new Federal Republic of Germany, where the bank established a representative office in Frankfurt at the beginning of 1953.


1955

Focus on Middle East and Africa

In the mid-1950s, looking to the future, the bank extends its operations beyond Europe and Asia to new areas of economic promise

With much of Europe in ruins, overseas expansion in the years immediately after the end of World War II was limited largely to opening new branches and buildings in existing franchises on other continents, notably Latin America and Asia. A particular focus was Japan, where the U.S. military occupation was creating new opportunities. In 1955, operations were extended to four new countries - Egypt, Liberia, Lebanon, and Saudi Arabia. The bank's first Middle East branch opened in Cairo in April, followed by a second in Beirut in October, and a third in Jeddah in December. In Liberia, it acquired Bank of Monrovia in September of the same year. In 1958, African operations were expanded to South Africa, where the bank had had a brief presence after World War I. The beginnings of a pan-African network came in 1965 with the acquisition of 40 percent of Banque Internationale pour l'Afrique Occidentale. As well as three branches in France, this organization had five branches each in Ivory Coast and Senegal, four each in Cameroon and Niger, three each in Gabon and Nigeria, two each in Congo, Mauritania, and Upper Volta, and one each in the Central African Republic, Dahomey (now Benin), Mali, and Togo. The Gulf presence expanded to include a Dubai branch in 1964. In 1967, a second branch opened in Saudi Arabia, in Riyadh. In 1969, First National City Corporation, the bank holding company formed in 1968, acquired 35 percent of Iranians' Bank, a local bank with four offices in Iran. An office in Tehran followed in 1974, the same year that First National City Bank opened a Jordan branch. In 1975, a new branch was opened in North Yemen.


1956

A game-changer


Innovative financing allowed Walter Wriston to help trucking magnate Malcom McLean pioneer the integration of transportation on sea and land. When National City Bank was organizing its transportation department, it focused its attention on the top 10 trucking companies in the United States. McLean Trucking, based in Winston-Salem, North Carolina, was one of the largest. McLean, as innovative in trucking as Wriston was in banking, recognized that he was in the transportation business, not just in trucking. He viewed a ship as comparable to a highway - he wanted to install racks so that truck trailers could be anchored on cargo vessels. Others he had approached for backing thought the idea was untenable. National City Bank, however, teamed up with him to finance the project, which involved buying the Waterman Steamship Corporation for some $42 million, financed entirely by the bank. The deal was a game-changer. Foreshadowing leveraged buyouts by decades, it required no out-of-pocket investment by the buyers. Equally startling, Wriston insisted that the underwriters of the preferred-stock offering deviate from customary practice - which had been for investment banks to make only a "best effort" at placing an underwriting - and commit to buying any unsold stock. McLean designed new kinds of trailers to fit onto his new fleet of ships, a design that ultimately led to the invention of the cargo container. McLean's company evolved into Maersk Sea-Land, which, by 2011, was shipping more than a million containers a year. By the early 21st century, some 60 percent of world trade was traveling at some time or another in cargo containers. Those ports that were slow to adapt to the container age gradually declined in importance.


1958

Eurodollars for the multinationals

In London, the bank helps develop the market for borrowing and lending dollars outside the United States

Donald Howard was working in London as a First National City Bank trainee in 1958, just as the eurodollar market was starting to develop. A product of Cold War tensions, the eurodollar market was born when the Soviet Union began depositing dollars in Paris rather than New York. The market for accepting and paying interest on dollars outside the United States soon moved across the English Channel to London, and "just took off like a rocket," Howard recalled. "We didn't start the eurodollar market, but once we learned how it was played, we were the biggest in it almost from the beginning." Following the success of negotiable certificates of deposits in the United States, Howard - who later returned to New York - worked with his London colleagues to develop a eurodollar CD market and, ultimately, a eurosterling CD market. "It was a long time, somewhere in the mid-1960s, before we started soliciting sterling business in British companies," he said. "When I first went out and knocked on doors, I was frequently the first banker they had ever seen in their offices." When the United States started making it difficult to send dollars out of the country, a new market sprang up in standby facilities for U.S. companies abroad. Lawrence Heath, who joined the overseas division in 1960, helped to arrange the first such facility in London in 1966. It was for about $35 million and was priced at half a percentage point above the average 90-day eurodollar deposit rate offered by First National City Bank and other U.S. banks in London. "Later LIBOR came along," Heath said, referring to the subsequent emergence of the London Inter-Bank Offered Rate. "We didn't have that before. We created it with the average of the three rates." Heath said.


1958

The move to midtown Manhattan

Planning for future expansion, the bank moves northwards from the old financial district into a building designed for the modern age

In the late 1950s, many big companies were moving from the traditional home of the financial district to Midtown Manhattan. In 1958, First National City Bank decided to join the exodus. The old home at 55 Wall Street was overcrowded and ill-suited to modern security and office technology, and the bank was planning for future expansion. The bank's president, James Stillman Rockefeller, decided that 399 Park Avenue should become the head office. The new building, which included a retail branch, was designed in the glass-and-steel architectural idiom of the time. A historical echo can be detected in the fact that the plot had originally been owned by John Jacob Astor, an associate of the bank in its very early days. The initial excavations had been undertaken on a speculative basis by a descendant, Vincent Astor, who was facing cash difficulties. The bank was able to take over the site at a reasonable price. In December 1959, 41 stories above Park Avenue, Gary Horn, a construction worker of Native American ancestry, edged his way along a steel girder and drove home the 306,000th steel bolt. The building had been ceremonially "topped out." Stillman Rockefeller pulled a rope to raise an American flag on a pole at ground level, and the whole flagpole assembly was raised 515 feet by a derrick and placed on top of the building. The new premises at 399 Park Avenue were officially opened on March 27, 1961. Full occupancy was planned for the end of May. The office move took place at the end of a business quarter, when volume of work was typically double the norm. The check-processing, domestic books, and account reconcilement functions were moved without interruption to their work - some 1,300,000 checks went through the system over the Easter weekend. The building and its facilities represented a new age. Staff dining facilities set new standards. By comparison with 55 Wall Street, the telephone system, with a design capacity of 5,000 extensions, was highly sophisticated, allowing direct calls to be made from outside to staff members for the first time. First National City Bank was a subscriber to a forerunner of the fax system, although in the early days, documents had to be wrapped around a cylinder prior to scanning and transmission. One relic of the past remained, at least for a time - the building was fitted with an updated version of the pneumatic tube system for carrying messages. The new building did have one disadvantage in the early days. The decision to move back-office operations to Park Avenue slowed down the clearing of checks, which had to be transported physically to the New York Clearing House back on Wall Street. A solution was found in moving these processes to a dedicated new building at 111 Wall Street in 1968. Citigroup's head office remained at 399 Park Avenue for more than 50 years before 388 Greenwich Street became our headquarters in 2016.



1961

Negotiable certificates of deposit

Riding the "wave of the future," First National City Bank becomes the leading bank in the New York metropolitan area, and top bank overseas

By 1965, Fortune magazine was describing First National City Bank as the "wave of the future" for American banking. It had surpassed its rivals in terms of local branch network; with 150 branches, it was the leading bank in the New York metropolitan area. In terms of assets, it was now America's second-largest bank after Bank of America. It was the top bank overseas, with 163 branches and affiliates in 55 countries and territories. What was more, earnings had kept on growing too. What was the explanation for such a breathtaking growth performance? The magazine noted that the bank had been well placed to expand its domestic retail business with higher-yielding products such as consumer mortgages and personal installment loans. It had pioneered consumer loans as early as 1928 and had been the most aggressive in nourishing the new postwar mass market, helping to develop markets for both car and student loans. First National City Bank was also the only major New York commercial bank with a national charter. Applications to open new branches were processed by the comptroller of the currency at the Federal Treasury Department, who was eager to grant rapid approvals. Banks with state charters had to be approved by the New York State Banking Department and by either the Federal Reserve or the Federal Deposit Insurance Corp. While it had also moved into long-term corporate lending, aircraft leasing, and factoring, First National City Bank's biggest coup was to pioneer the negotiable certificate of deposit (CD) in 1961. Walter Wriston and John Exter, the former Federal Reserve official, noticed that European banks had been issuing such instruments with maturities of three to five years, but they were non-marketable and non-negotiable. Wriston and Exter realized that a marketable time deposit that paid interest would be attractive to corporate investors. And so, by adapting the European idea, the bank found a way to reverse the steady outflow of funds from corporate checking accounts that had begun in the late 1950s. In effect, it was now offering to pay interest to get back funds it was previously getting interest-free. As Fortune noted, "the new instrument took the banking community by storm," with the value of outstanding negotiable CD issues reaching $15 billion by 1965. For First National City Bank, negotiable CDs were now the biggest source of funds after savings deposits.


1967

Cards revolutionize banking

Growth is delivered by the credit-card business, offering an alternative to the traditional "bricks-and-mortar" banking model

According to John Reed, the origins of the credit-card business lay in the need to make a line of credit available to consumers efficiently. Citi already had a personal-loan department, but the overheads were high with consequently high interest charges. Unlike in Britain, overdraft banking was not allowed in the United States. Hence, the invention of the Everything Card in the early 1960s. The Everything Card was accepted only in New York. At the time, a national card was still unknown. When John Reed was running the consumer business in the 1970s, his colleague Dave Phillips pointed out that, since the card relationship was already based on contacts by phone and mail, there was no reason why it should not be extended outside the area where the bank had branches. Reed explained, "So we decided to start a direct mail campaign around the country to get customers. By then credit bureaus had come into being, as well as credit scoring, and so we had the ability to get a credit check on people prior to mailing them a card. Within a year and a half we were the biggest direct mail people in the country." The rest of the banking industry protested vigorously. "They said it's not fair to poach customers from out of your geography," Reed recalled. "I spent about a year pacifying bankers whose customers we had taken, but we developed a nationwide card business." To address the challenges of granting credit, Citibank drew on the expertise of companies such as Ford Motor Credit, GMAC, and General Foods. For instance, Richard Braddock, a former brand manager at General Foods, was recruited in 1973. He went on to become Citicorp's president and chief operating officer. A blend of techniques - credit scoring supplemented by effective marketing - took Citi into the intensive use of branding and advertising, in a style not traditionally associated with the banking industry. In the words of Steven Freiberg, who was later head of the global credit-card business, "Now, more than 30 years on, it doesn't sound extraordinary. But back in those days the reaction was, You did what?!' " By 1994, Citibank had become the world's largest issuer of bank and charge cards with almost 50 million cards active - 34 million in the United States, nine million in other countries, and almost seven million Diners Club cards. Citibank was also issuing five million private-label cards for department stores and other retail outlets. In North America and Europe, the company consolidated the card businesses under a single team, which ran 15 processing and customer-service facilities. It was the second-largest card issuer in Belgium and Greece. In Asia, cards were Citibank's fastest-growing business, with three million cards in force, making it the largest issuer in the region. In addition to being dominant in almost every Asian market where it operated, the bank was also the exclusive credit-card partner for the region's biggest frequent-flyer program, encompassing seven airlines. The number of cards was also growing in Latin America, where Citibank was approaching the top market share position in several markets.


1967

Reorganizing for efficiency

A new corporate structure and emphasis on customer needs rather than geographical territories bring greater focus on profitability

By the time George Moore was serving as chairman and Walter Wriston as president in 1967, management consultants McKinsey and Co. had concluded that the bank was not maximizing the potential returns from its various markets. Nor was it able to provide sufficient management direction as the business evolved. As for overseas operations, relationships with multinational clients were fragmented - up to 40 officers could be working in different locations at different times on a single account. Once these shortcomings were identified, the bank began to address them. As a first step, shareholders approved the establishment of a holding company, First National City Corporation, in 1968. This company then acquired the bank as a wholly owned subsidiary. The "one-bank holding company" complied with the Bank Holding Company Act of 1956, which restricted the activities of holding companies owning "two or more" banks. Wriston and Moore explained to the shareholders that the new structure meant that "Citibank can be more useful to more people." The new company would be able to establish "new services either de novo or through acquisitions which build on Citibank's professionalism and expertise in the financial field." As a second step, in 1969, First National City Corporation put into place a new management structure. It was now less geographically focused and more oriented to the types of customer, be they individuals, small to medium-sized businesses, national or multinational companies, overseas customers, or wealthy individuals. The new structure included an operating division to oversee back-office functions. At around the same time, a "management profit report" was developed. Here, future chairman John Reed played a major role. According to Al Costanzo, who took over the overseas division in 1967, management began to analyze "where you made money and where you lost money. And this quantitative process made us a lot more sophisticated." The typical way of preparing budgets, he said, used to be to go out into the field and ask for a few lines on plans for the upcoming year. "The clerk was asked to get some figures and what he did was look at this year's figures and make a few adjustments." A more sophisticated approach was needed. What evolved, according to Costanzo, was the "idea of developing information to manage a business." The bank adopted an increasingly quantitative approach to managing the business. Costanzo's thinking was rooted in his own experience in Greece 20 years earlier. After spending a couple of years in Italy working on the Marshall Plan for rebuilding postwar Europe, the then Treasury official was appointed as the U.S. member of the Greek Currency Commission in 1951. Attached to the Greek central bank for the next four years, Costanzo took a more quantitative approach to banking. In those days, the central bank was involved in commercial lending and the young American found himself negotiating loans with Greek industrialists. "In Greece, like everywhere else, you made loans based on a guy's reputation and character. You never asked for figures." Costanzo changed that. He began doing his own cash-flow projections. It took the clients a while to get used to the new approach. "It annoyed the hell out of everybody. But they gradually began to do it and they figured that was the only way they would get some money."



1970

Fresh faces come to the board

In the 1970s, the board of directors becomes more representative in terms of race and gender

When Walter Wriston became president of the bank in 1967 and chairman in 1970, the composition of the board was not exceptional for the time, in that it consisted largely of white American men. Most were captains of industry and other prominent business leaders. The only non-U.S. citizen was Lord Aldington, chairman of the British bank Grindlays, with which First National City Bank had recently forged a partnership. He became a director in 1969. Every chairman had in those days the opportunity to gradually renew the composition of the board as existing members retired, and Walter Wriston made full use of it. The 1970s were a decade of massive social and economic change, and gradually the board came to reflect Wriston's vision of the modern world. As John Reed put it, "He always liked to have on the board people whose opinion he respected, and with whom he liked to talk, not only with regard to Citibank things but more broadly." In 1970, for example, the academic world was represented on the board through the appointment of Dr. Laurence Fouraker, dean of Harvard Business School. The decade also saw women directors in the boardroom. This was not mere tokenism - it was widely accepted that Wriston judged people purely on their merits and what they would contribute as board members. According to Reed, one factor in opening Wriston's eyes to the potential of women in senior positions was the influence of his wife Kathy, herself a successful lawyer. In 1973 Citi appointed its first woman director, Eleanor Sheldon, a sociologist and president of the Social Science Research Council. Toward the end of the decade a second woman director was appointed - Juanita Kreps, a labor economist who went on to serve as U.S. Secretary of Commerce from 1977 to 1979, the first woman in that position. Wriston was blind not only to gender, but to color also. Among the first new members to be appointed during his tenure was 36-year-old African-American lawyer Franklin Thomas - despite the fact that Thomas had been close to the Democratic politician Robert Kennedy, with whose political stance Wriston was not in sympathy. Thomas was a former U.S. Attorney for the Southern District of New York and deputy police commissioner in New York City. At the time of his appointment he was running a non-profit community-development corporation. Thomas went on later to head the Ford Foundation. He would still be on the board in 2008, when he was a consultant for a non-profit institution in South Africa, a country Citicorp had left in 1987 to return seven years later upon the collapse of the apartheid regime. Thomas' knowledge of South African affairs helped form the bank's views as to what the private sector attitude to apartheid should be. Another notable appointee was Brazilian financial technocrat Mario Simonsen, who joined the board in 1980 when he was vice chairman of the Brazilian Institute of Economics. A finance minister of Brazil in the 1970s, Simonsen was credited with recognizing earlier than many other observers the need for Brazil to adopt policies to fight the inflation that afflicted the country during the crises of the 1980s. He remained a director until the mid-1990s. The spirit of openness that characterized these appointments was reflected at the same time in management appointments.


1974

Citicards


In late 1974, Citicorp pioneered the use of cards at its 230 branches in New York. Known as Citicards, they enabled customers to cash personal checks up to the full amount of their balances. They could swipe a card in a terminal and receive authorization in 10 seconds. Following a one-year trial, the system was extended in late 1975 to give customers with checking accounts the four most frequently sought pieces of information, including the account balance at 8:00 a.m., and the date the customer's last check had cleared the account. The cards could also be used to show how much credit was available to the customer through the bank's overdraft system and how much was owed, including interest. With 2,800 terminals in the bank's branches and another 2,000 in retail outlets around New York, the system was believed to be one of the largest networks of computer terminals in the United States at the time.


1976

Focus shifts to retail banking

The business is transformed as consumer banking becomes a priority, and the ATM delivers 24-hour service

In 1974, John Reed became head of the new Consumer Services Group. Believing that consumer banking would become a core business, he outlined a long-term vision. "We are creating something new," he wrote in 1976. "I refer to a fundamentally new business starting with a dedication to the consumer, and to the proposition that we can offer a set of services that will substantially satisfy a family's financial needs under terms and conditions that will earn the shareholders an adequate profit while creating a healthy, positive and straightforward relationship with the customer." Written on vacation, this document became known in Citicorp annals as the "Memo from the Beach." "Working in the consumer bank in the early years was like a political campaign internally, particular at the beginning," recalled Pam Flaherty, who, in 1973, as assistant to international banking chief George Vojta, had accompanied Reed on a six-month trip identifying promising consumer markets abroad. "It was a real sense of mission, a sense of ... creating a new kind of business that was really going to benefit the customer." Another strand in Reed's thinking proved very important in later decades: "One of the key thought processes around the consumer bank was called success transfer. The idea was that we would identify ideas and products in one business in one geography and transmit them to another. The most ubiquitous was the automatic teller machine, or ATM." "At the time, there were no customer-friendly ATMs available and only limited capability of developing the fully trustworthy online interactive computer system which was necessary to run them," Reed said. Citicorp tried unsuccessfully to procure supplies. "So we built our own hardware, wrote our own software and introduced the system. Our first was to introduce a complete system for the City of New York." The ATM was launched at a branch in Queens in 1977. By the end of that year, all the bank's New York branches would have at least two machines operating 24 hours a day, seven days a week. "From the beginning, John Reed insisted that there would be two ATMs in every place," Pam Flaherty said. "People thought this was ridiculous as it vastly increased the costs. His view was that machines are not infallible and our promise is 24 hours a day." This commitment was the origin of the slogan "Citi never sleeps," which dates back to that era.


1977

Ethical approach brings solution

When the structural engineer responsible for Citicorp's new headquarters proposes urgent modifications, the bank responds positively

The former Citicorp Center, completed in 1977, is one of the most distinctive features of the New York skyline, and one of the most robustly built. Behind this strength is a story of sound ethics and cooperation between professionals. A year or so after the building was finished, and after it was fully occupied, a New Jersey engineering student did some calculations on the effects of "quartering winds" - winds striking it on the diagonal - given the unconventional positioning of the tower's "feet," which are midway along the sides, rather than at the corners. The results were worrying. The project's structural consultant William J. LeMessurier, initially incredulous, uncovered a problem. It lay in the method by which the building's internal wind braces had been joined, following some decisions taken during the construction phase. Although there was no suggestion of failure to observe building regulations, LeMessurier decided silence was not an option, and Walter Wriston and John Reed were brought into the picture. The hurricane season was approaching fast. There was an urgent need for action. So, without disrupting the lives of the office workers, two-inch-thick steel plates were welded over more than 200 bolted joints. Each day from 5 p.m. to 8 p.m., plywood enclosures were built around the places where, from 8 p.m. to 4 a.m., an army of welders would get to work. Flying into LaGuardia Airport one Sunday night, LeMessurier could see the Citicorp Center lit up by sparks. "The welders were working up and down the building, fixing the joints," the New Yorker reported him as saying. "It was an absolutely marvelous thing to see." The construction professionals had accepted their social responsibilities. The bank had cooperated in finding a solution, accepting an offer of compensation without, as the New Yorker magazine put it, the "punitive impulse that often poisons such negotiations." Everyone involved emerged with enhanced reputations.



1980

Connecting the dots

With the aid of Citi's global network, a flourishing business provides processing and clearing for international customers

From its beginnings, the City Bank of New York was involved in international transactions and finance. In 1902, according an industry observer of the time, it was the only bank that could pay out "any sum of money in any currency in any city in the world within hours." This means that it had to establish effective transaction services. Like its peers, it had a front office where officers assessed risks and made loans, and it had a back office where transactions were cleared and settled, and all the paperwork was processed. The bank's early focus on corporate clients with large foreign operations afforded it a unique perspective on the cash management and trade finance needs of international corporations . The bank took on the role of trusted adviser and business enabler to an expanding, global client base. In the 1980s and 1990s, with the rise of outsourcing and offshore manufacturing, Citibank expanded its transaction services network. Branch operations were established to offer cash management and trade finance to clients as they entered new markets, set up foreign subsidiaries, or entered into joint ventures. As Citi became more locally embedded, the local currency deposits generated by this expanding business allowed the bank also to provide banking services to local clients. In turn, as these local clients from the emerging markets sought to grow beyond their domestic markets, they relied on Citi to facilitate their trade flows, optimize the flow of cash across their expanding operation, and integrate the financial operations of new businesses they acquired. Citi served financial institutions by providing access to local clearing, settlement, and custody services in countries where they did not have a presence, and consequently established the industry's largest proprietary network. This network was further leveraged as the investment industry expanded. In the first decade of the 21st century, Citi acquired ABN AMRO's custody network, as well as Forum Financial and Bisys, to extend its suite of middle- and back-office capabilities in fund services. Asset managers and institutional investors across the Americas, Europe, and Asia rely on Citi for market access and core processing, accounting, performance management, and compliance-monitoring services that enable them to focus on growing their business. Citi connects diverse counterparties and enables flows across a broad range of financial and non-financial transactions, from helping multinational corporations manage their working capital, to helping banks in Africa and Latin America efficiently connect with trade counterparties in Asia. In the United States, Citi processes some 13 million passport applications for the U.S. Department of State each year. Today, Citi's clients across the corporate, financial, and public sectors rely on Global Transaction Services not only to "connect the dots" across their network of business entities and subsidiaries, but to deliver services that form a vital part of their financial operation.


1982

Citigold: spreading affluence


The Citigold service was inaugurated in Hong Kong in 1982. It made Citi's global wealth-management expertise available to "mass affluent" individuals with $100,000 or more to invest. It was such a success that it was soon adopted, with local adjustments to the minimum investment required, by franchises around the world. By 2011, the service was available in more than 550 Citigold Centers in 36 countries and had just been introduced to Vietnam, where the bank's first retail branch in Ho Chi Minh City had recently opened. For Vietnam, which had a population of about 90 million, the minimum investment was set at $50,000. "The launch of the Citigold platform and the retail bank is a first step in what I think will be a many-step process of Citi entering the consumer space in a very big way," Vietnam country officer Brett Krause said. "The Citigold brand is fortuitous for us in Vietnam because gold is so important to the Vietnamese. It's a place where gold is central to people's wealth preservation. People trade gold, buy gold and store gold so to have a brand like Citigold is powerful in itself."


1986

Sowing the seeds for a modern private bank


Citi's private banking roots date back to the 1820s when a predecessor company of today's Citi Trust (a trust and estate-planning division) started managing the accounts of wealthy British and other European families domiciled in the United States. However, the private bank's modern form, as part of the Institutional Clients Group, can be traced back to an initiative by Walter Wriston, who formed the international services division. This merged all units within Citi that managed the financial-planning needs of wealthy individuals. Wriston's commitment to the business and its clientele was legendary. He was even known to have picked up a client or two flying into the airport at New York. These private-client relationships often brought in institutional business for Citi. In 1982, the division became the International Private Bank; and, in 1986, under John Reed, it was transformed into the Private Banking Group, with a business model that fundamentally continues to this day. It was in 1986 that the phrase "wealth management" was originally coined, and the decision made to be a private bank, as opposed to a brokerage business. The late 1980s and the 1990s saw rapid expansion to onshore centers from traditional offshore locations, such as Geneva and London, leading to the creation of a truly global private bank.


1987

The company does the right thing

Citi writes off developing-country debts in 1986, but stands by its customers, with long-term business benefits

When the United States raised interest rates to counter inflation in the early 1980s, the value of the dollar soared against other currencies. Several countries that had borrowed dollars during the second half of the 1970s began to face repayment difficulties, leading to what came to be known as the "Third World debt crisis." Looking back on the $3-billion write-off on debts of Brazil and other developing countries in 1987, Citicorp chairman John Reed said it took him more than a year to convince everyone that it was the right thing to do. A year later, the chairman was still convinced as to the correct course. "I went back to the board, and this time they felt much more comfortable," he said. The write-off led to a net loss of $1.1 billion in 1987, the bank's first since 1934. Reed was unperturbed. "We were the lead negotiator in Mexico, Brazil, Argentina and these were the big countries at the time. So it was natural for us to take that first step." Citicorp later wrote off a further $1.7 billion from its cross-border refinancing portfolio. By 1991, Reed was able to say, "We put the cross-border refinancing portfolio issue behind us ... indeed, our corporate and consumer businesses in Latin America are thriving - because, unlike some of our competitors, we didn't back away from our customers there." However, in 1990, the board faced a new challenge when a downturn, particularly in the U.S. real-estate market, led to a fresh write-off. The following year, to strengthen its balance sheet, Citicorp sold stock to Prince Al-Waleed bin Talal, a grandson of the founding king of Saudi Arabia. He injected more than $500 million into the company in exchange for a minority shareholding. At the same time, Citicorp decided to mark up its venture-capital fund from book value to market value, recognizing a $457-million increase in capital.



1998

Momentous encounter leads to merger

The leaders of two of the United States' financial services giants see the potential in a strategic merger, and Citigroup is born

One spring evening in 1998, Citibank's chairman, John Reed, sat down to dinner with Sanford I. Weill, the chief executive of Travelers Group. The two men were in Armonk, a small hamlet in Westchester County, New York, where Travelers Group had a conference center. The subject of their conversation was a $140-billion merger. Some weeks earlier, 20 of Weill's top executives had met to consider possible new acquisition targets. Someone proposed Citicorp. "As we talked, I saw that the idea really wowed the group," Weill wrote in his memoirs. "Citicorp stuck out like a strategic home run." After their dinner in Armonk, Reed and Weill met for a Friday morning breakfast with their respective teams. They looked at what each side might bring to the table. Citicorp had its unique global position and strengths in credit cards, foreign exchange, private banking, derivatives, and relationships with multinational companies. Travelers Group had leading franchises in consumer finance, insurance, asset management, investment banking and capital markets, as well as an array of distribution platforms. It was decided to arrange the combined organization in three broad areas - consumer businesses; corporate and investment banking; and private banking and asset management. The group agreed on 50:50 ownership and an 18-member board for the new company, which would take its name from the "Citi" in Citicorp and the "Group" in Travelers Group - to form "Citigroup." Discussions continued through Saturday. Agreement was reached on an arrangement whereby Reed and Weill would each have a veto over big decisions. According to Weill, the final decision to move ahead came on Sunday morning, when he received a call from Reed. Three days later, the Travelers Group board met to discuss the merger, with briefing papers that described the companies as "Jupiter" for Travelers and "Saturn" for Citicorp. News of the merger was released to the world on April 6, 1998. "Undoubtedly, putting together such giants would propel us into a universe of our own," Weill said. Crucial to the rationale underlying the merger was the prospective repeal of the Glass-Steagall Act (Banking Act) of 1933, which had stipulated the separation of commercial and investment banking in the United States. The repeal was signed into law by President Bill Clinton on November 12, 1999.



2000

A transatlantic merger


Sir Winfried Bischoff, former chairman of Schroders, explained that the decision to sell the investment bank to Citi came from a recognition that it needed capital to expand. "Between 1984, when I became chief executive, and 2000, the stock price of Schroders had gone up about a hundred times. So from a relatively small firm it became a sizable firm - from a $100-million firm it became a $10-billion firm. We had a half-way decent European business, we had an outstandingly good U.K. business and we had a very good Asian business ... the only possible buyer would have to be a large American firm." This meshed with Sandy Weill's strategy of expanding Citigroup by acquisition. Sir Win recalled, "I felt that Salomon together with Citibank together with Schroders would actually be a pretty complete entity."


2001

Investment in Poland


Among Citi's major transactions during the early years of the 21st century was an investment in Poland's Bank Handlowy w Warszawie, which joined the group in 2001. Bank Handlowy, established in 1870 by businessman, political activist, newspaper publisher, and philanthropist Leopold Kronenberg, is Poland's oldest commercial bank and was one of the few banks supporting trade with Western Europe and Russia before World War I. After 1945, it became the main correspondent bank for foreign banks in Poland. Bank Handlowy returned to the Warsaw Stock Exchange in 1997, after an absence of almost 60 years. Citibank had established a Polish subsidiary in 1991. Under a deal completed in 2001, Citibank transferred all the assets of its Polish company to Bank Handlowy in exchange for a majority of Handlowy's shares. By 2011, Bank Handlowy was serving more than 20,000 corporate clients and more than a million individual customers. A wide range of corporate, investment, and retail banking services is offered under the Citi Handlowy brand.


2001

Mergers create banking giants abroad

In Mexico and Poland, old-established banks with their own histories and traditions join the Citigroup worldwide network

Under the leadership of Sandy Weill, Citigroup pursued an active program of acquisition. In 2001, the company acquired Mexico's Grupo Financiero Banamex-Accival for $12.5 billion, the largest U.S./ Mexico corporate merger to that date. Three months after the merger was completed, Banamex (now Citibanamex) celebrated its integration with Citigroup at an evening ceremony at its Santa Fe complex in Mexico City. Overnight, 35.9 million transactions had been transferred, 117 Citigroup systems had been interconnected, and 200 systems of both institutions had been closed down. The integrated operation comprised more than 1,400 branches and more than 4,200 ATMs. "While similar integration processes in our country between banks that are our competitors have required 12, 15 and up to 24 months to be completed, we completed the most important phase in three months," said Manuel Medina-Mora. "Today we are one single bank. And we are making history." Citibanamex was founded through the 1884 merger of Banco Nacional Mexicano and Banco Mercantil Mexicano, two banks that had operated independently since 1882. For the next 30 years, it had dual roles as both a commercial bank and a central bank, issuing banknotes and collecting taxes. It was nationalized at the onset of the Latin American debt crisis in 1982 (Mexico was one of the first countries to be seriously affected) and run as a state-owned credit association for nine years, before being reprivatized in 1991. Citigroup itself has very deep roots in Mexico. The International Banking Corporation, later acquired by National City Bank, set up its first branch in Mexico City in 1903 and a second in Monterrey the following year. Although both were closed during the revolution which began in 1910, National City Bank opened in 1929. Three years later, it was not affected by a government order banning foreign banks from opening branches. As a result, until 1994, Citibank was the only foreign deposit-taking institution in Mexico.


2005

Citi Inclusive Finance brings scale


Established in 2005, Citi Inclusive Finance (founded as Citi Microfinance) is a commercial initiative. It works with Citi's other businesses and across regions to provide products and services for microfinance institutions (MFIs) - networks and investors lending to the underserved. Citi Inclusive Finance serves more than 100 MFIs in over 40 countries around the world, and has helped make microfinance an integral part of the global financial infrastructure. Citi supports the commercial development of MFIs through:
• Local currency funding and transaction services
• Corporate finance and capital-markets solutions
• Credit, savings, insurance, and remittance products
• Innovation, financing, and product development with MFIs and other partners
• Encouraging transparency and proper risk management within the industry
Under a successful partnership launched in 2006, Citi and the U.S. Overseas Private Investment Corporation (OPIC) have provided more than $270 million in funding to 34 MFIs across 19 countries. The MFIs have created microloans for more than 900,000 borrowers, 92 percent of whom are women.


2007

Amid economic turmoil, Citi recapitalizes

As crisis hits the financial world, the U.S. government backs Citi

For the United States, the first years of the 21st century were a time of low interest rates and an inflow of investment funds from fast-growing emerging economies and oil-producing countries. One consequence was the widespread availability, and build-up, of low-cost private debt, which fueled over-expansion in the housing market. In late 2007, market conditions began to deteriorate, home prices started on what became a steep decline, and residential-mortgage defaults began to rise. The increasing defaults and subsequent drop in the values of mortgage-backed securities weakened many financial institutions, including Citi. Facing significant losses on its mortgage portfolio, Citigroup commenced raising capital through public and private offerings that raised more than $30 billion over two months in late 2007. However, in 2008, economic conditions deteriorated further, culminating in the collapse of the 158-year-old Lehman Brothers investment bank in September, and prompting further upheavals in the credit and equity markets. Amid widespread uncertainty in the banking sector, in October the U.S. government stepped in with the Troubled Asset Relief Program (TARP). Initially, this provided a combined $125 billion in preferred equity to nine major U.S. financial institutions in order to strengthen their capital positions and boost the broader economy. Citi received $25 billion in TARP capital in October and an additional $20 billion in capital in November 2008. Citi also entered into a loss-sharing program with the U.S. Treasury on $300 billion of loans and securities backed by residential and commercial real estate, consumer loans, and other assets. Citi issued $7 billion in preferred stock to the Treasury and the Federal Deposit Insurance Corporation in exchange for the loss-sharing agreement. In February 2009, Citi announced that it would issue common stock in exchange for certain third-party-owned preferred securities, to increase its tangible common equity without any additional U.S. government investment. As part of this exchange, $25 billion of the U.S. government's preferred shares were converted to common shares as well. In January 2009, Citi announced a reorganization that would allow it to focus on its core banking franchise while reducing non-core assets over time. The following month, chief executive Vikram Pandit appeared before the U.S. House Financial Services Committee with seven other CEOs of companies that had received TARP funds. Following public criticism of large Wall Street remuneration packages, he made his own position clear. He intended to take a mere $1 a year as salary and no bonus until Citi returned to profitability. "I get the new reality and I will make sure Citi gets it as well," he told the committee. At the end of 2009, Citi raised $20.5 billion in public equity, used the proceeds to repay the $20 billion of preferred shares owned by the U.S. Treasury, and terminated its loss-sharing agreement at the same time. By the end of 2010, the U.S. government had sold all of its common shares in Citi. In total, the U.S. Treasury netted a cumulative profit for taxpayers of $12 billion as a result of its investment in Citi. "We will always be grateful to the American people for their crucial support during the crisis," Pandit said. In March 2010, Pandit explained that Citi had become "a fundamentally different company than it was two years ago." Indeed, it had re-emerged as one of the best-capitalized major banks in the United States.



2010

Helping small businesses develop


For small businesses operating in underprivileged communities, financing can be difficult to access. In 2010, Citi and the Citi Foundation launched the Communities at Work Fund, making capital to the tune of $200 million available to financial institutions with strong ties to underserved, hard-to-reach communities. One of the largest borrowers is IFF (formerly the Illinois Facilities Fund), based in Chicago and serving five states in the Middle West. It is the country's leading nonprofit facilities lender. Its loans have supported projects costing almost a billion dollars in all and creating 41,000 jobs. Citi and the Citi Foundation have also partnered with ACCION Texas, a nonprofit microenterprise development program that provides loans and business support to entrepreneurs - many of them from minority groups - who cannot get finance through conventional channels. Citi and the Citi Foundation's help has taken the form of philanthropic donations, volunteer support, and the leadership of the Citi Community Development team in Texas (including the chairmanship of the board of directors). Those supported by ACCION included the owner of the Sunshine Health Food Store. She started the business with just $2,300 from an income-tax rebate and her credit card. After a year, having been turned down by several banks, she went to ACCION, which was sufficiently impressed by her commitment and professionalism that they offered her a loan of $12,500. She seized the opportunity. Janie Barrera, president and CEO of ACCION Texas-Louisiana, said, "Citi is a community builder, a risk-taker and an entrepreneur. That's what we are. And so is Arga."


2010

Smart banking the way forward

Redesigning banking processes around customer needs boosts business growth and brand awareness in Tokyo

Following Citi's establishment of a new relationship with a mass-transit company in Singapore, the bank's Global Ventures and Innovation unit in New York was exploring the potential for a similar tie-up in Japan. It did not materialize, but the thinking behind it led to an alternative retail strategy for boosting growth and brand awareness. Realizing that product segmentation alone was not the best basis for getting to know customers, the bank conducted research into nine segments of the retail market. It was decided that Citi could serve four segments well. These were defined as baby boomers, the prosperous, the achievers, and the up-and-coming. With the aid of psychographics and behavioral analysis, a "smart banking" experience was built around the way in which these four types of customer wanted to interact with their financial institutions. For achievers and up-and-coming people, screens and technology were important. These customers generally worked long hours and had little time for finding a branch, queuing, filling out forms, and waiting to be served. The other two segments, baby boomers and prosperous people, were more traditional, preferring greater personal engagement with knowledgeable staff. They also placed greater emphasis on physical surroundings. For the development of a new look, Citi turned to an international design company responsible for the iconic look of many notable retail stores. After an initial try-out at the City Hall MRT station branch in Singapore, the Japanese pilot branches were launched in 2010. In central Tokyo, customers were now greeted by a huge "media wall," displaying local weather, news, and financial updates, tailored to the location and time of day. Touch screens offered a wide range of services, and staff were on hand to provide assistance either in the branch or via live video conferencing. By re-engineering more than 100 transactions, Citi was also able to reduce the space taken up by the back office, with the result that branches in prime locations made greater economic sense. After the introduction of the new branches, Citi was soon ranked as top retail bank in Japan by Nihon Keizai Shimbun, the financial newspaper, as compared with 57th place in 2009. By April 2011, Citi had rolled out 48 "smart banking" branches in 11 countries and territories. There were 21 in Taiwan. There were also 21 mini-smart-banking locations in five countries, including 14 in the Philippines and 11 in Singapore.


2010

Structuring Islamic transactions


In the 1980s, Citi's corporate finance team in London became aware of the demand for a range of banking products that was compliant with Islamic principles, one of which is that earning interest on an investment is not allowed. In 1996, the Citi Islamic Investment Bank was set up in Bahrain. It benefited from the services of a Sharia board, peopled by reputable Islamic scholars, who would endorse banking products as acceptable from a religious viewpoint. Citi took products such as bonds, derivatives, syndicated loans, and trade finance products and converted them into Sharia-compliant instruments. Over the years, the technology was exported from the Middle East to other markets such as Malaysia, Indonesia, Pakistan, and Turkey. By 2010, Malaysian Airports Holdings Bhd (MAHB) was operating 39 airports in Malaysia and also had a presence in India, Turkey, and the Maldives. In 2010, Citi arranged an inaugural offering of 1 billion ringgit in Islamic medium-term notes for the company. The issue was oversubscribed nine times, attracting a diverse group of investors from financial institutions and asset-management companies to pension funds, insurance companies, and even some corporates. Proceeds were used for the construction of the world's biggest low-cost carrier terminal and to refinance short-term borrowings. Citi was chosen for its "global expertise and strong credentials in structuring Islamic transactions," according to Faizal Mansor, the company's chief financial officer. "Overall, we're very pleased with Citi. They have helped us to achieve superb ratings for the company. Citi's expertise allowed us to tap the capital markets at the opportune time and gain enormous support in our future as a world-class airport business."


2012

Citi

June 16, 1812 to June 16, 2012

In 2012, Citi celebrated our 200th anniversary. Our principles - common purpose, responsible finance, ingenuity and leadership - are the bridge that connects our 200-year history with the future we want to create. When these principles guide our actions, we endure and thrive. Our anniversary provided us with an opportunity to reflect on our history and prepare for the future.

Copyright © 2019 Citigroup, Inc.
https://www.citigroup.com/citi/about/timeline/

 

 

Citigroup
Board of Directors
Board Committees

Peter Babej
Chief Executive Officer
Asia Pacific

Kristine Braden
Chief of Staff, Office of the CEO*

Mark Carawan
Chief Compliance Officer

Michael Corbat
Chief Executive Officer
Citigroup

Michael Corbat
Michael L. Corbat is Chief Executive Officer of Citigroup, the world's global bank, with approximately 200 million customer accounts and activities in more than 160 countries and jurisdictions.

Since becoming CEO in 2012, he has focused on leveraging Citi's unique global network to serve its institutional and consumer banking clients with an emphasis on strong execution and the highest ethical standards. In the process, Mr. Corbat has made Citi a simpler, smaller, safer and stronger institution. Citi has improved the quality and consistency of earnings, and Mr. Corbat is committed to creating shareholder value by serving Citi's stakeholders and fulfilling Citi's mission of enabling economic growth and progress.

Mr. Corbat has been at Citi and its predecessor companies since his graduation from Harvard University with a bachelor's degree in economics in 1983. Prior to his current role, Mr. Corbat was CEO of Europe, Middle East and Africa where he oversaw all of Citi's business operations in the region, including consumer banking, corporate and investment banking, securities and trading and private banking services. Previously, Mr. Corbat served as the CEO of Citi Holdings, Citi's portfolio of non-core businesses and assets. In this role, he oversaw the divestiture of more than 40 businesses and divested more than $500 billion assets, reducing risk on the Company's balance sheet and freeing up capital to invest in Citi's core banking business.

Mr. Corbat has also served as the CEO of Citi's Global Wealth Management unit and was Head of the Global Corporate and Global Commercial Bank at Citi, a role in which he led the firm's efforts to provide best-in-class financial services to top-tier multi-national corporations and financial institutions around the world.

Mr. Corbat has been honored by several civic and cultural organizations. He serves as Chairman of The Clearing House Association Supervisory Board and Vice Chairman of the Financial Services Forum. He is also an executive committee member of the Partnership for New York City, a permanent board member of the Bank Policy Institute, and sits on the Board of Trustees of the United States Ski and Snowboard Association.


Ellen M. Costello

Grace E. Dailey

Barbara Desoer

John C. Dugan

Jane Fraser
President of Citi
Chief Executive Officer
Global Consumer Banking

Duncan P. Hennes

Peter Blair Henry

Bradford Hu
Chief Risk Officer
Bradford Hu is the Chief Risk Officer for Citigroup. In this role, he leads the global Risk Management organization, which is responsible for developing the Group’s risk governance framework, recommending its risk appetite and ensuring that all risks generated by the business are measured, reviewed and monitored on an ongoing basis. Mr. Hu reports to Citigroup CEO Michael Corbat and is a member of Citi’s Executive Management Team.

Before assuming this role in January 2013, he served as Chief Risk Officer for Citi Asia Pacific, where he was responsible for managing the firm's risks across all of Citi’s businesses in the region’s 17 markets, including consumer banking, corporate and investment banking, securities and trading and private banking services.

Prior to joining Citi in 2008, Brad worked at Morgan Stanley for more than 20 years, where he served as CEO of Morgan Stanley Taiwan and held a number of senior leadership roles in Firm Management, the Global Equity Division, Global Capital Markets, and Investment Banking. Brad has more than 15 years of experience in Asia, having worked and lived in Hong Kong, Tokyo and Taipei.

Brad is the Chairman of the Board of Trustees for the Global Association of Risk Professionals (GARP) and serves on the Board of Trustees for The Asia Society and The Museum of American Finance. He is a member of the Financial Advisory Roundtable of the Federal Reserve Bank of New York, as well as a member of the Advisory Board for the Amos Tuck School of Business.

Brad graduated from the Massachusetts Institute of Technology in 1985, earning S.B. and S.M. degrees in electrical engineering and computer science with a concentration in economics, and received his M.B.A. with High Distinction from the Amos Tuck School of Business Administration, Dartmouth College, where he was elected Edward Tuck Scholar. Brad is married with two children.

S. Leslie Ireland

Jay Jacobs

Renée J. James

David Livingstone
Chief Executive Officer
Europe, Middle East & Africa

Mark Mason
Chief Financial Officer
Citigroup

Mary McNiff
CEO, Citibank, N.A.

Gene McQuade

Gary M. Reiner

Jessica Roos
Chief Auditor

Edward Skyler
Executive Vice President
Global Public Affairs

Diana L. Taylor

Ernesto Torres Cantu
Chief Executive Officer
Latin America

James S. Turley

Sara Wechter
Head of Human Resources

Rohan Weerasinghe
General Counsel and Corporate Secretary

Mike Whitaker
Head of Enterprise Infrastructure, Operations & Technology

Deborah C. Wright

Alexander Wynaendts

Paco Ybarra
Chief Executive Officer
Institutional Clients Group
Paco Ybarra is CEO of Citi’s Institutional Clients Group, which comprises Banking, Capital Markets and Advisory, Markets and Securities Services, Treasury and Trade Solutions and the Citi Private Bank. He is a member of the Executive Management Team, Chairman of the Institutional Clients Group Risk Management Committee and serves as a Member of the Board of Grupo Financiero Citibanamex, S.A. de C.V.

Prior to assuming his current role in May 2019, Mr. Ybarra was Global Head of Markets and Securities Services. He joined the bank in 1987 in Spain as a Management Associate. During his career he has held positions in Spain, Mexico, Singapore, New York and London. In November 2006, he became Co-Head of Global Fixed Income, and in 2011 he was appointed Global Head of Markets. In November 2013, his responsibilities were expanded to include the Securities Services businesses. He was appointed Deputy Head of the Institutional Clients Group in October 2018.

Mr. Ybarra holds a bachelor’s degree in economics from the University of Valencia in Spain and an M.B.A. from I.E.S.E. in Barcelona. He is a member of the Board of Directors of EMPower in the United Kingdom, which supports local organizations in emerging markets countries that provide at-risk youth with the tools and resources they need to lead healthy, productive lives, and is a member of the Alumni Board of the IESE Business School.



https://www.citigroup.com/citi/about/our_leaders.html

 

EX-24.01 6 citi-exhibit2401x12312018.htm EXHIBIT 24.01

Exhibit 24.01


POWER OF ATTORNEY

Annual Report on Form 10-K

Citigroup Inc.


I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Michael Corbat
(Signature) Michael Corbat



POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Ellen M. Costello

(Signature) Ellen M. Costello


POWER OF ATTORNEY
Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ John C. Dugan
(Signature) John C. Dugan


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Duncan P. Hennes
(Signature) Duncan P. Hennes


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Peter Blair Henry (Signature) Peter Blair Henry


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Franz B. Humer (Signature) Franz B. Humer


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ S. Leslie Ireland
(Signature) S. Leslie Ireland


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Lew W. Jacobs
(Signature) Lew W. Jacobs


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Renée J. James
(Signature) Renée J. James



POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Eugene M. McQuade
(Signature) Eugene M. McQuade



POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Gary M. Reiner
(Signature) Gary M. Reiner


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Anthony M. Santomero
(Signature) Anthony M. Santomero

 

POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Diana L. Taylor
(Signature) Diana L. Taylor


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ James S. Turley
(Signature) James S. Turley


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Deborah C. Wright
(Signature) Deborah C. Wright


POWER OF ATTORNEY

Annual Report on Form 10-K
Citigroup Inc.

I, the undersigned, a director of Citigroup Inc., a Delaware corporation, do hereby constitute and appoint Michael L. Corbat, John C. Gerspach and Rohan Weerasinghe, and each of them severally, to be my true and lawful attorneys-in-fact and agents, each acting alone with full power of substitution and re-substitution, to sign my name to the Annual Report on Form 10-K of Citigroup Inc. for the fiscal year ended December 31, 2018, and all amendments thereto, and to file, or cause to be filed, the same with all exhibits thereto (including this power of attorney), and other documents in connection therewith with the U.S. Securities and Exchange Commission, provided that such Annual Report on Form 10-K in final form, and any amendment or amendments thereto and such other documents, be approved by said attorneys-in-fact, or by any one of them; and I do hereby grant unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully and to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.


IN WITNESS WHEREOF, I have subscribed these presents this 15th day of January, 2019.

/s/ Ernesto Zedillo Ponce de Leon

(Signature) Ernesto Zedillo Ponce de Leon



https://www.sec.gov/Archives/edgar/data/831001/000083100119000027/citi-exhibit2401x12312018.htm

 

 

 

 

FEDERAL RESERVE SYSTEM
Travelers Group Inc.
New York, New York
Citicorp
New York, New York
Order Approving Formation of a Bank Holding Company
and Notice to Engage in Nonbanking Activities
Travelers Group Inc. ("Travelers"), a holding company for securities,
insurance and other financial services firms, has requested the Board’s approval
under section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. § 1842)
("BHC Act") to become a bank holding company by acquiring all the voting shares
of Citicorp, a bank holding company within the meaning of the BHC Act, and all of
Citicorp’s subsidiary banks, including its lead subsidiary bank, Citibank, N.A., New
York, New York ("Citibank"). 1/ Travelers also has requested the Board’s approval
under section 4(c)(8) of the BHC Act and section 225.24 of the Board’s Regulation
Y (12 C.F.R. 225.24) to acquire various domestic nonbank subsidiaries and
investments of Citicorp, including Citibank, Federal Savings Bank, San Francisco,
California, and Citicorp Securities Inc., New York, New York, and to retain certain
nonbanking subsidiaries of Travelers, including Travelers Bank & Trust, fsb,
Newark, Delaware, and Salomon Smith Barney Inc., New York, New York.
Travelers proposes to own and operate these companies and to conduct the
proposed activities in accordance with the requirements of the BHC Act, Regulation
Y and relevant Board orders governing these activities and subsidiaries. In addition,
-2-
2/ Travelers also proposes to acquire Citicorp's export trading company, pursuant to
section 4(c)(14) of the BHC Act, and the agreement and Edge corporations of
Citicorp, pursuant to sections 25 and 25A, respectively, of the Federal Reserve Act
("FRA") (12 U.S.C. §§ 601 et seq., 611 et seq.).
3/ Travelers also has requested an exemption under section 23A of the FRA for a
subsidiary of Citibank to purchase the stock of Travelers's Canadian consumer
finance subsidiary.
4/ Asset data for Travelers and Citicorp are as of June 30, 1998, unless otherwise
noted.
Travelers has filed applications and notices under section 4(c)(13) of the BHC Act
(12 U.S.C. § 1843(c)(13)) and the Board’s Regulation K (12 C.F.R. 211) to acquire
the foreign operations of Citicorp and to retain certain foreign investments and
continue certain foreign activities of Travelers. 2/ Finally, Travelers has requested an
exemption from the quantitative requirements of section 23A of the FRA to permit
Citicorp to transfer its existing mortgage subsidiary, Citicorp Mortgage, Inc.
("CMI"), to Citibank to facilitate financing for CMI's business using liquidity
available to Citibank. 3/
Travelers, with total consolidated assets of approximately $420 billion,
is a diversified financial services firm engaged in a variety of securities, insurance,
lending, financial advisory, and other financial activities in the United States and
overseas. 4/ More than 70 percent of Travelers's total assets and more than 60
percent of its total revenues are associated with activities that are permissible for
-3-
5/ These percentages do not account for a number of activities and investments that
might be restructured or conformed to the requirements of the BHC Act without
divestiture or complete termination of the activity.
bank holding companies under the BHC Act, including securities underwriting,
dealing, brokerage, and advisory activities; mortgage lending and consumer finance
activities; consumer advisory activities; and credit-related insurance activities. 5/
Travelers also engages domestically and internationally in a number of
nonbanking activities that are not permissible for bank holding companies, which
Travelers proposes to conform to the requirements of the BHC Act or divest. These
activities include underwriting property and casualty, life and commercial insurance
and annuities; general insurance agency activities; investing in more than 5 percent
of the voting shares of commercial companies; controlling and distributing shares of
open-end investment companies registered under the Investment Company Act of
1940 ("mutual funds"); real estate management and investing activities; proprietary
trading in physical commodities; oil and gas exploration and investments; and
certain other impermissible activities and investments. Travelers has committed to
conform all impermissible activities to the requirements of the BHC Act by
restructuring the activity or subsidiary, by terminating the activity, or by selling or
divesting the subsidiary, as necessary, within the period provided in the BHC Act
for new bank holding companies to conform impermissible investments and
activities.
In addition, Travelers controls several domestic subsidiaries that
cannot be affiliated with a bank under section 20 of the Glass-Steagall Act
(12 U.S.C. § 377). These companies engage in securities underwriting and dealing
activities, distributing shares of open-end mutual funds, and controlling open-end
mutual funds. Travelers has committed to conform the activities of these companies
to the requirements of the Glass-Steagall Act and the Board's orders and
interpretations thereunder, including the limitations on the amount of revenue
-4-
6/ The ranking data for Citicorp and Travelers are based on data as of
December 31, 1997, and reflect the proposed merger of NationsBank Corporation,
Charlotte, North Carolina, with BankAmerica Corporation, San Francisco,
California, which the Board approved. See NationsBank Corporation, 84 Federal
Reserve Bulletin 858 (1998).
7/ Notice of the proposal was published in the Federal Register (63 Federal
Register 17,874 (1998)) and in local newspapers in accordance with the Board’s
Rules of Procedure. See 12 C.F.R. 262.3(b).
derived from securities underwriting and dealing activities, on consummation of the
proposed transaction in accordance with the requirements of this order.
Citicorp, with total consolidated assets of approximately $331 billion,
is the third largest commercial banking organization in the United States and the 22d
largest commercial banking organization in the world. 6/ Citicorp’s subsidiary banks
and savings associations operate in California, Connecticut, Delaware, Florida,
Georgia, Illinois, Maryland, Nevada, New Jersey, New York, South Dakota, Texas,
Utah, Virginia, Washington, D.C., Guam, Puerto Rico, and U.S. Virgin Islands.
Citicorp operates approximately 1100 branches and offices in the United States and
almost 100 foreign countries, and engages in a number of permissible nonbanking
activities.
The proposed transaction would create the largest commercial banking
organization in the United States and the world, initially with total consolidated
assets of approximately $751 billion. Travelers's subsidiary depository institutions
operate in Delaware. Travelers has indicated that after the proposed acquisition the
combined organization would operate under the name Citigroup Inc.
Public Comment on the Proposal
To give interested members of the public an opportunity to submit
comments to the Board on the statutory factors that it is charged with reviewing, the
Board published notice of the proposal and provided a period for public comment.7/
The Board extended the initial public comment period to accommodate the broad
-5-
8/ A number of commenters requested that the Board extend the public comme

Citibank/Citigroup


For Immediate Release

Citigroup Inc. (NYSE: C)
April 16, 2018

Citi Announces Opening of its Offices in Saudi Arabia

highlights
Launches a Work Readiness Community Program in Support of Saudi Youth

Carmen Haddad-Citi Country Officer-Saudi Arabia and Vice Chairperson-Citigroup Saudi Arabia, Andrew Baird, President and CEO, EFE Global, H.E. Eng. Ibrahim Al-Omar, Global Governor of the Saudi Arabian General Investment Authority, Michael L. Corbat-Chief Executive Officer, Atiq Rehman-CEO, Middle East and Africa, Omar Almohammady, Citigroup Saudi Arabia Board Member, James C. Cowles-CEO for Europe, Middle East and Africa, Alberto J. Verme-Chairman, Citi Institutional Clients Group, also Chairman-Citigroup Saudi Arabia and Zuhair Al Zahrani, Citi Foundation recipient and graduate, to announce the renewed grant with EFE to support 40 youth from Saudi Arabia.

Ahmet Bekce, Corporate Banking Head, MENA, Carmen Haddad, Citi Country Officer-Saudi Arabia and Vice Chairperson-Citi Saudi Arabia, H.E. Eng. Ibrahim Al-Omar, Governor of the Saudi Arabian General Investment Authority, Michael L. Corbat, Chief Executive Officer of Citigroup, James C. Cowles, Citi's CEO for Europe Middle East and Africa, Atiq Rehman, Chief Executive Officer Citi Middle East and Africa, Omar Almohammady, Citigroup Saudi Arabia Board Members and Alberto J. Verme-Chairman, Citi Institutional Clients Group, also Chairman-Citigroup Saudi Arabia, mark the occasion.




Riyadh, Saudi Arabia – Citi today announced the official opening of its new offices in Riyadh, Saudi Arabia, located at the Kingdom Tower. The inauguration ceremony was attended by H.E. Eng. Ibrahim Al-Omar, Governor of the Saudi Arabian General Investment Authority, and top Citi officials, including Michael L. Corbat, Chief Executive Officer; James C. Cowles, CEO for Europe, Middle East and Africa; Atiq Rehman, CEO, Middle East and Africa; Alberto J. Verme, Chairman, Citi Institutional Clients Group, also Chairman-Citigroup Saudi Arabia; Carmen Haddad, Citi Country Officer, Saudi Arabia and Vice Chairperson, Citigroup Saudi Arabia; Ahmet Bekce, Corporate Banking Head, MENA, and Citigroup Saudi Arabia Board Member; and Omar Almohammady, Citigroup Saudi Arabia Board Member. The ceremony was followed by a client reception at the Four Seasons Hotel hosting top clients, regulators and officials.

"We are delighted to establish an office in the Kingdom and be open for business on the ground. The expansion to Saudi is in line with our strategy to be present in the region's biggest economy and contribute to its transformation," said Mr. Corbat. "Citi continues to support the Kingdom's national agenda for a diverse and sustainable economy and we aim to play a key role towards realizing this vision. We will strive to make a positive financial and social impact by providing Citi's best in class resources, capabilities and practices to our partners and stakeholders."

In 2017, the Saudi Arabian Capital Market Authority (CMA) granted Citi a license to provide a range of Investment Banking, Debt and Equity Capital Markets, Markets, and Securities Research capabilities to its local and international institutional clients. Citigroup Saudi Arabia recently held its inaugural board meeting in Riyadh, setting the stage for the global bank to deploy its suite of corporate products on the ground to help support Saudi Arabia's economic transformation.

"Saudi Arabia is a strategically important market for Citi and we are very proud to re-establish our operations to serve our client base here,'' said Carmen Haddad, Citi Country Officer-Saudi Arabia and Vice Chairperson-Citigroup Saudi Arabia. ''Citi looks forward to playing an active role in the Saudi banking sector with the aim of supporting the Kingdom's Vision 2030."

At the opening ceremony, the Citi Foundation also announced the renewal of their fifth year of partnership with Education For Employment (EFE), the leading youth employment organization in the Middle East and North Africa (MENA), through a grant worth USD $300,000. The EFE-Citi Foundation partnership is part of the Citi Foundation's Pathways to Progress initiative designed to equip urban youth with career readiness tools and opportunities to thrive in today's economy. This year, 40 youth from Saudi Arabia will benefit from the EFE program along with youth in the UAE, Morocco and Tunisia.

"The EFE partnership falls within our efforts to reach 500,000 youth globally and to help the next generation become work-ready," said Haddad. "We're thrilled to continue our partnership with EFE and to help young Saudis build financial and workplace skills."

"EFE's 67,000 alumni demonstrate a simple truth: when youth have access to opportunity, they can thrive in life and build brighter futures for their families through five years of partnership, the Citi Foundation's visionary support for EFE has directly enabled hundreds of MENA youth to enter the world of work, and has helped us build the organizational foundation needed to scale this impact in the long-term," said Andrew Baird, President and CEO, EFE-Global.


Citi
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi.

About Citi Foundation
The Citi Foundation works to promote economic progress and improve the lives of people in low-income communities around the world. We invest in efforts that increase financial inclusion, catalyze job opportunities for youth, and reimagine approaches to building economically vibrant cities. The Citi Foundation's "More than Philanthropy" approach leverages the enormous expertise of Citi and its people to fulfill our mission and drive thought leadership and innovation. For more information, visit www.citifoundation.com.

About Education For Employment
Education For Employment (EFE) is the leading youth employment organization in the Middle East and North Africa that nurtures the potential of Arab youth to thrive in life through their jobs. Since 2006, EFE has linked over 67,000 Arab youth to a job or the world of work through locally-run EFE affiliates in Egypt, Jordan, Morocco, Palestine, Tunisia, Saudi Arabia and Yemen, and support hubs in the USA, Europe, and the UAE. To learn more, please visit www.efe.org and follow @EFE Global


Copyright © 2019 Citigroup, Inc.
https://www.citigroup.com/citi/news/2018/180416a.htm

DEF 14A 1 citi_def14a.htm DEFINITIVE PROXY STATEMENT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to §240.14a-12



CITIGROUP INC.
(Name of Registrant as Specified In Its Charter)



(Name of Person(s) Filing Proxy Statement, if other than the Registrant)




Payment of Filing Fee (Check the appropriate box):
[X] No fee required.

[ ]

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.


1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:


[ ]

Fee paid previously with preliminary materials.



[ ]

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.


1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:



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Citigroup Inc.
388 Greenwich Street
New York, NY 10013


March 16, 2016


Dear Stockholder:


We cordially invite you to attend Citi’s Annual Stockholders’ Meeting. The Annual Meeting will be held on Tuesday, April 26, 2016, at 9:00 am in The Grand Ballroom at the University of Miami, Student Center Complex, 1330 Miller Drive, Coral Gables, Florida. Directions to the 2016 Annual Meeting location are provided on pages 103 and 104 of this Proxy Statement.


At the Annual Meeting, stockholders will vote on a number of important matters. Please take the time to carefully read each of the proposals described in the attached Proxy Statement.


Thank you for your support of Citi.


Sincerely,

Michael E. O’Neill
Chairman of the Board



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LETTER FROM THE BOARD OF DIRECTORS TO OUR STOCKHOLDERS


Operating the business in a decidedly challenging economic, political and social environment, the Citi management team delivered full-year net income of over $17 billion — our best annual profit since the financial crisis — and also reached a number of significant financial milestones. Importantly, our 2015 stress test submission received no objection from the Federal Reserve Board, enabling the firm to return a meaningful amount of capital to its shareholders. A comprehensive Resolution Plan was submitted to the Federal Reserve and the Federal Deposit Insurance Corporation, and we are awaiting their evaluation.


Shortly after Mike Corbat took on the CEO role three-and-a-half years ago, he presented a set of metrics to the Board that he felt the company should use in evaluating its performance. We agreed, and these targets, which management committed to achieve by the end of 2015, were publicly disclosed. As discussed and shown in the charts included in the Compensation Discussion and Analysis section of this proxy, the stated objectives were for the most part achieved, and our overall operating performance in 2015 was more than respectable when compared to those of our eight-firm peer group. We can be proud of what has been accomplished, but the management team and your directors recognize that further improvement in the firm’s financial performance is essential if our shareholders are to be appropriately rewarded.


In the context of the recent market turmoil and decline in bank stocks, including our own, it has obviously been difficult to celebrate the success of the turnaround in the firm’s performance that has occurred in the past three years. Clearly, investors are concerned about the sharp decline in commodity prices, the slowing economic expansion in the emerging markets, and the negative impact on bank profitability were interest rates to remain low for an extended period. We do not dismiss these concerns, but you should take comfort from the firm’s ample capital and liquidity and the fact that a great deal of time and effort has been devoted to building a sound and active risk management function. We are confident that Mike and his team are up to the task of guiding the firm through whatever challenges lie ahead.


The work of embedding a culture of ethical decision-making throughout the organization continued apace in 2015. The firm’s Mission and Value Proposition clearly defines the desired culture, articulates Citi’s purpose and broader role in society, and lays out the firm’s expectation for its employees in fulfilling its purpose and role. Revamped leadership standards, which better reflect our ethics and execution priorities, are an important factor in performance evaluation and compensation decisions. The Board’s Ethics and Culture Committee will continue to monitor management’s initiatives, as well as their implementation and results.


In recent years your directors have spent a considerable amount of time with management reviewing the company’s strategy and exploring alternatives. In the process of these reviews, our strategy has been further refined. The Board believes it builds on the firm’s distinct competitive advantages and provides important diversification benefits. Each of our Institutional and Consumer businesses is expected to generate half of the company’s net income, with half of that income generated in the U.S. and the other half sourced internationally. We operate through a unique international network that enables the firm to transact business in over 160 countries. We have a particular advantage in the emerging markets that are still projected to grow more quickly than the developed markets, including the United States, albeit with greater volatility. We believe we are on the right track and that your investment will be rewarded. Rest assured that we take very seriously our fiduciary obligation to you to ensure that the firm is operated with your interests at heart. We believe the Board, as constituted, has the requisite skills and experience to accomplish that objective.


A short synopsis of management’s Board-supported operating practices in executing the strategy seems in order. The management team has appropriately and adeptly exited businesses that did not and were unlikely to produce adequate returns on invested capital. Though much of the necessary simplification and streamlining of the firm has been accomplished, optimizing the company's portfolio of businesses and support functions is a never-ending process. As a matter of course, management will continue to monitor the performance and prospects of individual businesses, and, after thorough reviews, withdraw capital from those that are unlikely to meet the firm’s return expectations. At the same time, incremental capital will be invested in businesses where we have a competitive advantage and attractive long-term prospects even when such investments do not generate immediate returns (for example, the current investment in our credit card businesses). Lastly and crucially, the return of capital to you our shareholders continues to be a vital component of management’s execution priorities. In the existing and likely-to-continue slow growth



Citi 2016 Proxy Statement ii


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environment, there are not enough attractive investment opportunities in either our existing businesses or permissible new ventures to fully invest the capital being generated by the firm. Hence, capital return becomes the default course of action. Of course, it will be essential to continue to satisfy the Federal Reserve and other regulators that we are operating in a prudent manner in order to achieve our capital return objectives.


We remain convinced that the strategy we have adopted, and which our management team is executing, continues to be the one that will be the most accretive for our shareholders over time. However, as we have demonstrated in the past, should evidence mount that some of our key underlying assumptions have proven faulty, the Board, working with management, will make whatever mid-course corrections are required.


We believe in the mission of this iconic institution, and we are thankful to have your ongoing support as we work toward achieving our goals. Dialogue with shareholders is a fundamental feature of a healthy, well-governed organization, and we will continue to make it a priority. As always, you are encouraged to write with thoughts, concerns or suggestions to Citigroup Inc. Board of Directors c/o Rohan Weerasinghe, General Counsel and Corporate Secretary, 388 Greenwich Street, New York, New York, 10013.



Michael L. Corbat

Gary M. Reiner

Ellen M. Costello

Judith Rodin

Duncan P. Hennes

Anthony M. Santomero

Peter B. Henry

Joan E. Spero

Franz B. Humer

Diana L. Taylor

Renée J. James

William S. Thompson, Jr.

Eugene M. McQuade

James S. Turley

Michael E. O’Neill

Ernesto Zedillo Ponce de Leon


www.citigroup.com iii

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Citigroup Inc.
388 Greenwich Street
New York, NY 10013


Notice of Annual Meeting of Stockholders


Dear Stockholder:


Citi’s Annual Stockholders’ Meeting will be held on Tuesday, April 26, 2016, at 9:00 am in The Grand Ballroom at the University of Miami, Student Center Complex, 1330 Miller Drive, Coral Gables, Florida. Directions to the 2016 Annual Meeting are provided on pages 103 and 104 of this Proxy Statement. You will need an admission ticket or proof of ownership of Citi stock to enter the meeting. Live audio of the Annual Meeting will be webcast at www.citigroup.com.


At the meeting, stockholders will be asked to:


•elect the directors listed in this proxy statement,

•ratify the selection of Citi’s independent registered public accounting firm for 2016,

•consider an advisory vote to approve Citi’s 2015 executive compensation,

•approve additional authorized shares under the Citigroup 2014 Stock Incentive Plan,

•approve the Amended and Restated 2011 Citigroup Executive Performance Plan,

•act on certain stockholder proposals, and

•consider any other business properly brought before the meeting, or any adjournment or postponement thereof, by or at the direction of the Board of Directors.

The close of business on February 29, 2016 is the record date for determining stockholders entitled to vote at the Annual Meeting. A list of these stockholders will be available at Citi’s headquarters, 388 Greenwich Street, New York City, for at least 10 days before the Annual Meeting or any adjournment or postponement thereof.


Citi has utilized the Securities and Exchange Commission rule allowing companies to furnish proxy materials to its stockholders over the Internet. This process allows us to expedite our stockholders’ receipt of proxy materials, lower the costs of distribution, and reduce the environmental impact of our Annual Meeting.


In accordance with this rule, on or about March 16, 2016, we sent to those current stockholders who were stockholders at the close of business on February 29, 2016, a notice of the 2016 Annual Meeting containing a Notice of Internet Availability of Proxy Materials (Notice). The Notice contains instructions on how to access our Proxy Statement and Annual Report and vote online. If you received a Notice and would like to receive a printed copy of our proxy materials from us instead of downloading a printable version from the Internet, please follow the instructions for requesting such materials included in the Notice.


Please vote by telephone, mobile phone, or Internet (instructions are on your proxy card, voter instruction form, or Notice, as applicable), so that your shares will be represented whether or not you attend the Annual Meeting. If you receive your materials by mail, please sign, date, and promptly return the enclosed proxy card in the enclosed envelope.


By order of the Board of Directors,


Rohan Weerasinghe
Corporate Secretary
March 16, 2016



Citi 2016 Proxy Statement iv

CONTENTS



PROXY STATEMENT HIGHLIGHTS


1 ABOUT THE ANNUAL MEETING


4 HOW WE HAVE DONE

9 Annual Report

9 CORPORATE GOVERNANCE

10 Corporate Governance Materials Available on Citi’s Website

11 Corporate Governance Guidelines

11 Director Independence

13 Meetings of the Board of Directors and Committees

15 Meetings of Non-Management Directors

16 Board Leadership Structure

16 Board Diversity

16 Board’s Role in Risk Oversight

16 Committees of the Board of Directors

17 nvolvement in Certain Legal Proceedings

20 Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation

20 Indebtedness

22 Business Practices Committees

23 Code of Ethics for Financial Professionals

23 Ethics Hotline

23 Code of Conduct

24 Communications with the Board

24 STOCK OWNERSHIP


25



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 26

PROPOSAL 1: ELECTION OF DIRECTORS 27

Director Criteria and Nomination Process 27

Director Qualifications 28

The Nominees 31

Directors’ Compensation 47

AUDIT COMMITTEE REPORT 51


PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 52


PROPOSAL 3: ADVISORY VOTE TO APPROVE CITI’S 2015 EXECUTIVE COMPENSATION 54

Our Stockholder Engagement 54

Compensation Discussion and Analysis 55

Executive Summary 55

2015 Company Performance 60

Citi’s Executive Compensation Awards 61

Risk and Citi’s Incentive Compensation Programs 72

Citi’s Additional Executive Compensation Practices 73

The Personnel and Compensation Committee Report 76

2015 Summary Compensation Table and Compensation Information 77

Management Analysis of Potential Adverse Effects of Compensation Plans 86

PROPOSAL 4: APPROVAL OF ADDITIONAL AUTHORIZED SHARES UNDER THE CITIGROUP 2014 STOCK INCENTIVE PLAN 86

PROPOSAL 5: APPROVAL OF THE AMENDED AND RESTATED 2011 CITIGROUP EXECUTIVE PERFORMANCE PLAN 90

STOCKHOLDER PROPOSALS 92

Submission of Future Stockholder Proposals 102



Cost of Annual Meeting and Proxy Solicitation


102



Householding


102



Directions to Annual Meeting Location 103



ANNEXES

Annex A - Additional Information Regarding Proposal 3


A-1

Scorecard Glossary A-1

Citigroup — Non-U.S. GAAP Financial Measures Reconciliations A-3

Annex B - Additional Information Regarding Proposal 4  B-1

Supplemental Information on Equity Plan Grants  B-1

Description of the Citigroup 2014 Stock Incentive Plan  B-2

Certain U.S. Federal Income Tax Consequences  B-7

Equity Compensation Plan Information  B-9


Citigroup 2014 Stock Incentive Plan (as amended and restated as of April 26, 2016, subject to approval by stockholders)   B-9

Annex C - Additional Information Regarding Proposal 5    C-1

Description of the Amended and Restated 2011 Citigroup Executive Performance Plan  C-1

2011 Citigroup Executive Performance Plan (as amended and restated as of January 1, 2016)  C-3


www.citigroup.com v


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Citi 2016 Proxy Statement

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PROXY STATEMENT HIGHLIGHTS

MEETING AND VOTING INFORMATION

Time and Date
9:00 am, April 26, 2016
Place
University of Miami
The Grand Ballroom at the Student Center Complex
1330 Miller Drive
Coral Gables, FL 33146

Record Date
February 29, 2016

Voting

Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each Director nominee and one vote for each of the other proposals to be voted on.

Admission
An admission ticket is required to enter Citi’s Annual Meeting.

BOARD AND CORPORATE GOVERNANCE HIGHLIGHTS


Director Nominees

Name

Age

Director
Since

Principal
Occupation

Other Current
Public Company
Directorships


Michael L. Corbat
55
2012
Chief Executive Officer, Citigroup Inc.
None

Ellen M. Costello
61
2016
Former President and CEO, BMO Financial Corporation, and Former U.S. Country Head, BMO Financial Group
•DH Corporation

Duncan P. Hennes
59
2013
Co-Founder and Partner, Atrevida Partners, LLC
• Syncora Holdings, Ltd.

Peter B. Henry
46
2015
Dean, New York University, Leonard N. Stern School of Business
None

Franz B. Humer
69
2012
Former Chairman, Roche Holding Ltd
• Diageo plc (Chairman)
• Kite Pharmaceuticals

Renée J. James
51
2016
Operating Executive, The Carlyle Group
• Oracle Corporation
• Sabre Corporation
• Vodafone Group Plc

Eugene M. McQuade
67
2015
Former Vice Chairman, Citigroup Inc. and Former CEO, Citibank, N.A.
• XL Group plc (Chairman)

Michael E. O’Neill
69
2009
Chairman, Citigroup Inc.
None

Gary M. Reiner
61
2013
Operating Partner, General Atlantic LLC
• Hewlett-Packard Company
• Box Inc.


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PROXY STATEMENT HIGHLIGHTS


Name

Age

Director
Since

Principal
Occupation

Other Current
Public Company
Directorships


Judith Rodin
71
2004
President, Rockefeller Foundation
• Comcast Corporation

Anthony M. Santomero
69
2009
Former President, Federal Reserve Bank of Philadelphia
• RenaissanceRe Holdings, Ltd.
• Penn Mutual Life Insurance Company

Joan E. Spero
71
2012
Senior Research Scholar, Columbia University School of International and Public Affairs
• IBM
• International Paper

Diana L. Taylor
61
2009
Vice Chair, Solera Capital LLC
• Brookfield Asset Management
• Sotheby’s

William S. Thompson, Jr.
70
2009
Former CEO, Pacific Investment Management Company
None

James S. Turley
60
2013
Former Chairman and CEO, Ernst & Young
• Emerson Electric Co.
• Intrexon Corporation
• Northrop Grumman Corporation

Ernesto Zedillo Ponce de Leon
64
2010
Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University
• Alcoa Inc.
• Procter & Gamble Company
• Grupo Prisa


Summary of Director Nominees



The nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy and to oversee management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills, experience, and backgrounds necessary to oversee Citi’s efforts toward becoming a simpler, smaller, safer, and stronger financial institution, while mitigating risk and operating within a complex financial and regulatory environment.

Independence

Tenure



Citi 2016 Proxy Statement 2


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PROXY STATEMENT HIGHLIGHTS

Corporate Governance Highlights


Citi is active in ensuring its governance practices are at the leading edge of best practices. Highlights include:

Alignment with Stockholders


✓ The Board supported a Proxy Access Stockholder Proposal in 2015 and subsequently amended its By-laws to grant stockholders the right to have stockholder nominees to the Board included in the Company’s proxy materials


✓ Citi has an independent Chair


✓ If there is no independent Chairman of the Board, Board will appoint a lead independent Director


✓ Majority vote standard for uncontested Director elections


✓ Stockholders have the right to call a special meeting and to act by written consent


✓ No super majority vote provisions in our governing instruments



Compensation Governance


✓ Emphasize pay-for-performance alignment


✓ Base a majority of total compensation on performance


✓ Retention of an independent compensation consultant by the Personnel
and Compensation Committee


✓ Expanded clawback policies for employees


✓ Executive officers and directors are required to retain at least 75% of the equity awarded to them as incentive compensation; Executive officers are required to retain 50% of such equity awards for one year following the termination of their employment



Adhere to Corporate Governance Best Practices


✓ Ethics and Culture Committee of the Board was formed in 2014


✓ Meaningful Political Activities Statement and disclosure of Citi’s political contributions


✓ Posted the names of significant trade and business associations of which Citi is a participant on Citi’s website to provide more transparency


✓ Members of Citi’s Board of Directors and Citi’s executive officers are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan



www.citigroup.com 3


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ABOUT THE ANNUAL MEETING


Annual Meeting of Stockholders

• Time and Date
9:00 am, April 26, 2016

• Place

University of Miami
The Grand Ballroom at the Student Center Complex
1330 Miller Drive
Coral Gables, FL 33146

• Record Date
February 29, 2016

• Voting

Stockholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for each Director nominee and one vote for each of the other proposals to be voted on.

• Admission
An admission ticket is required to enter Citi’s Annual Meeting.

Meeting Agenda and Voting Matters

Board Vote Recommendation

Page Reference (for more detail)

Election of Directors


FOR EACH DIRECTOR NOMINEE

27-50

Ratification of KPMG LLP (KPMG) as auditor for 2016

FOR
52-53


Advisory vote to approve Citi’s 2015 executive compensation

FOR
54-76

Approve additional authorized shares under the Citigroup 2014 Stock Incentive Plan

FOR
86-90

Approve the Amended and Restated 2011 Citigroup Executive Performance Plan

FOR
90-92

Stockholder Proposals 6-10

AGAINST
92-102

Transact other business that properly comes before the meeting





Who is soliciting my vote?

The Board of Directors of Citigroup Inc. is soliciting your vote at the 2016 Annual Meeting of Citi’s stockholders.

Where and when will the Annual Meeting take place?

The Annual Meeting is scheduled to begin at 9:00 am on April 26, 2016 in The Grand Ballroom at the Student Center Complex of the University of Miami. The Student Center Complex is located on 1330 Miller Drive in Coral Gables, Florida. Please see pages 103 and 104 for directions to the facility. Live audio of the Annual Meeting will be webcast at www.citigroup.com.


Why did I receive a one-page Notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials?

Pursuant to rules adopted by the Securities and Exchange Commission (SEC), we have elected to mail to many of our stockholders a Notice of Internet Availability of the Proxy Materials (Notice) instead of a paper copy of the proxy materials. All stockholders receiving the Notice will have the ability to access the proxy materials over the Internet and receive a paper copy of the proxy materials by mail on request. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. In addition, the Notice contains instructions on how you may access proxy materials in printed form by mail or electronically on an ongoing basis. This process has allowed us to expedite our stockholders’ receipt of proxy materials, lower the costs of distribution and reduce the environmental impact of our Annual Meeting.



Citi 2016 Proxy Statement 4

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ABOUT THE ANNUAL MEETING


Why didn’t I receive a notice in the mail about the Internet availability of the proxy materials?


We are providing some of our stockholders, including stockholders who have previously asked to receive paper copies of the proxy materials and some of our stockholders who are living outside of the United States, with paper copies of the proxy materials instead of a Notice. In addition, we are providing a Notice by e-mail to those stockholders who have previously elected delivery of the proxy materials electronically. Those stockholders should have received an e-mail containing a link to the website where those materials are available and a link to the proxy voting website.


How can I access Citi’s proxy materials and Annual Report electronically?


This Proxy Statement and the 2015 Annual Report are available on Citi’s website at www.citigroup.com. Click on “About Us,” and then “Corporate Governance.” Most stockholders can elect not to receive paper copies of future Proxy Statements and Annual Reports and can instead view those documents on the Internet.


If you are a stockholder of record, you can choose this option and save Citi the cost of producing and mailing these documents by following the instructions provided when you vote over the Internet. If you hold your Citi stock through a bank, broker or other holder of record, please refer to the information provided by that entity for instructions on how to elect not to receive paper copies of future Proxy Statements and Annual Reports.


If you choose not to receive paper copies of future Proxy Statements and Annual Reports, you will receive an e-mail message next year containing the Internet address to use to access Citi’s Proxy Statement and Annual Report. Your choice will remain in effect until you tell us otherwise or until your consent is deemed to be revoked under applicable law. You do not have to elect Internet access each year. To view, cancel or change your enrollment profile, please go to www.InvestorDelivery.com.


What will I be voting on?


• Election of Directors (see pages 27-50).
• Ratification of KPMG as Citi’s independent registered public accounting firm for 2016 (see pages 52-53).
• An advisory vote to approve Citi’s 2015 executive compensation (see pages 54-76).
• Approval of additional authorized shares under the Citigroup 2014 Stock Incentive Plan (see pages 86-90).
• Approval of the Amended and Restated 2011 Citigroup Executive Performance Plan (see pages 90-92).
• Five stockholder proposals (see pages 92-102).

An agenda will be distributed at the meeting.

How many votes do I have?

You will have one vote for every share of Citi common stock you owned on February 29, 2016 (the record date).

How many votes can be cast by all stockholders?

2,941,223,643, consisting of one vote for each of Citi’s shares of common stock that were outstanding on the record date. There is no cumulative voting.

How many votes must be present to hold the meeting?

To constitute a quorum to transact business at the Annual Meeting, the holders of a majority of the votes that can be cast, or 1,470,611,823 shares, must be present or represented by proxy at the Annual Meeting. We urge you to vote by proxy even if you plan to attend the Annual Meeting, so that we will know as soon as possible that enough votes will be present for us to hold the Annual Meeting. Persons voting by proxy will be deemed present at the meeting even if they abstain from voting on any or all of the proposals presented for stockholder action. Shares held by brokers who vote such shares on any proposal will be counted as present for purposes of establishing a quorum, and shares treated as broker non-votes for one or more proposals will nevertheless be deemed present for purposes of constituting a quorum for the Annual Meeting.

Does any single stockholder control 5% or more of any class of Citi’s voting stock?

Yes, there are two stockholders that each control more than 5%. According to a Schedule 13G Information Statement filed by Blackrock Inc. and certain subsidiaries (BlackRock) on January 21, 2016, BlackRock may be



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ABOUT THE ANNUAL MEETING



deemed to beneficially own 6.8% of Citi’s common stock. According to a Schedule 13G Information Statement filed by The Vanguard Group (Vanguard) on February 11, 2016, Vanguard may be deemed to beneficially own 5.50% of Citi’s common stock.


For further information, see Stock Ownership—Owners of More than 5% of Citi Common Stock on page 26 in this Proxy Statement.


How do I vote?


You can vote by proxy whether or not you attend the Annual Meeting. To vote by proxy, stockholders have a choice of voting over the Internet, by mobile phone, by telephone or by using a traditional proxy card.


Vote by Internet

Vote by
Mobile Phone

Vote by Phone

Vote by Mail

Vote in Person


Go to
www.proxyvote.com. You will need the 16 digit number included in your proxy card, voter instruction form, or Notice.

You can scan this QR code to vote with your mobile phone. You will need the 16 digit number included in your proxy card, voter instruction form, or Notice.


Call the number on your proxy card or the number on your voter instruction form. You will need the 16 digit number included in your proxy card, voter instruction form, or Notice.


Send the completed and signed proxy card or voter instruction form to the address on your proxy card or voter instruction form.


See the below instructions regarding attendance at the Annual Meeting.



To reduce our administrative and postage costs, we ask that you vote through the Internet, by telephone, or by using your mobile phone, all of which are available 24 hours a day. To ensure that your vote is counted, please remember to submit your vote by 11:59 pm ET on April 25, 2016.


If you are a record holder of Citi common stock, you may attend the Annual Meeting and vote in person. If you want to vote in person at the Annual Meeting, and you hold your Citi common stock through a securities broker (that is, in “street name”), you must obtain a proxy from your broker and bring that proxy to the Annual Meeting.


How do I get a printed proxy card?

There are three ways for stockholders to request a proxy card and a full set of materials at no charge if you received a Notice instead of the printed materials. In all three examples you will need the 16 digit Control Number printed on the Notice.

Requesting a proxy card

By telephone: 1-800-579-1639;
By Internet: www.proxyvote.com; or
By e-mail: sendmaterial@proxyvote.com (send a blank e-mail with the 16 digit Control Number in the subject line).

Can I change my vote?

Yes. Just send in a new proxy card or voter instruction form with a later date, cast a new vote by telephone or Internet, or send a written notice of revocation to Citi’s Corporate Secretary at the address on the cover of this Proxy Statement. If you attend the Annual Meeting and want to vote in person, you can request that your previously submitted proxy not be used.



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ABOUT THE ANNUAL MEETING


What if I don’t vote for some of the matters listed on my proxy card?


If you return a signed proxy card without indicating voting instructions, your shares will be voted, in accordance with the Board’s recommendation for the nominees listed on the card, for KPMG as independent registered public accounting firm for 2016, for Citi’s 2015 executive compensation, for an amendment to the Citigroup 2014 Stock Incentive Plan, for the approval of the Amended and Restated 2011 Citigroup Executive Performance Plan, and against the stockholder proposals.


Can my broker vote my shares for me on the election of Directors or executive compensation matters?


No. Please note that the rules that govern when brokers may vote your shares have changed. Brokers may no longer use discretionary authority to vote shares on the election of Directors or on executive compensation matters, including the advisory vote on compensation, the approval of additional authorized shares under the Citigroup 2014 Stock Incentive Plan, and the approval of the Amended and Restated 2011 Citigroup Executive Performance Plan if they have not received instructions from their clients. Please see the following question for an explanation of those matters on which brokers may vote your shares.


Can my shares held in street name be voted if I don’t return my voter instruction card and don’t attend the Annual Meeting?


If you don’t vote your shares held in street name, your broker can vote your shares on matters that the New York Stock Exchange (NYSE) has ruled discretionary.


Discretionary Items. KPMG’s appointment is a discretionary item. NYSE member brokers who do not receive instructions from beneficial owners may vote on this proposal as follows: (i) a Citi affiliated member is permitted to vote your shares in the same proportion as all other shares are voted with respect to this proposal; and (ii) all other NYSE member brokers are permitted to vote your shares at their discretion.


Non-discretionary Items. Brokers will not be able to vote your shares on the election of Directors, the advisory vote to approve Citi’s 2015 executive compensation, the approval of additional authorized shares under the Citigroup 2014 Stock Incentive Plan, the approval of the Amended and Restated 2011 Citigroup Executive Performance Plan, and the stockholder proposals if you fail to provide instructions. Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given.


If your shares are registered directly in your name, not in the name of a bank or broker, you must vote your shares or your vote will not be counted. Please vote your proxy so your vote can be counted.


If I hold shares through Citigroup’s employee benefit plans and do not provide voting instructions, how will my shares be voted?


If you hold shares of common stock through Citigroup’s employee benefit plans or stock incentive plans and do not provide voting instructions to the plans’ trustees or administrators, your shares will be voted in the same proportion as the shares beneficially owned through such plans for which voting instructions are received, unless otherwise required by law.



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ABOUT THE ANNUAL MEETING


What vote is required, and how will my votes be counted, to elect Directors and to adopt the other proposals?


The following chart describes the proposals to be considered at the meeting, the vote required to elect Directors and to adopt each of the other proposals, and the manner in which votes will be counted:




Proposal


Voting Options


Vote Required to Adopt the
Proposal


Effect of
Abstentions


Effect of
“Broker
Non-Votes”(1)



Election of Directors.


For, against, or
abstain on each
nominee.


A nominee for Director will be
elected if the votes cast for such
nominee exceed the votes cast
against such nominee.


No effect.


No effect.



Ratification of KPMG.


For, against, or
abstain.


The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.


Treated as votes
against.


Brokers have
discretion to
vote.



Advisory vote to
approve Citi’s 2015
executive compensation.


For, against, or
abstain.


The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.


Treated as votes
against.


No effect.



Approval of additional
authorized shares under
the Citigroup 2014 Stock
Incentive Plan.


For, against, or
abstain.


The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.


Treated as votes
against.


No effect.



Approval of the
Amended and Restated
2011 Citigroup Executive Performance Plan.


For, against, or
abstain.


The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.


Treated as votes
against.


No effect.



Five stockholder
proposals.


For, against, or
abstain.


The affirmative vote of a majority
of the shares of common stock
represented at the Annual Meeting
and entitled to vote thereon.


Treated as votes
against.


No effect.


(1) A broker non-vote generally occurs when a broker is not permitted to vote on a matter without instructions from a customer having beneficial ownership in the securities and has not received such instructions. Broker non-votes will not be counted as shares entitled to vote on the proposal.

If a nominee for Director is not re-elected by the required vote, he or she will remain in office until a successor is elected and qualified or until his or her earlier resignation or removal. Citi’s By-laws provide that in the event a Director nominee is not re-elected, such Director shall offer to resign from his or her position as a Director. Unless the Board decides to reject the offer or to postpone the effective date of the offer, the resignation shall become effective 60 days after the date of the election.

The result of the advisory vote to approve Citi’s 2015 executive compensation is not binding on the Board, whether or not the resolution is passed under the voting standards described above. In evaluating the stockholder vote on the advisory resolution, the Board will consider the voting results in their entirety.


Is my vote confidential?


In 2006, the Board adopted a confidential voting policy as a part of its Corporate Governance Guidelines. Under the policy, except as necessary to meet applicable legal requirements, all votes, whether submitted by proxies, ballots, Internet voting, telephone voting, or otherwise are kept confidential for registered stockholders who request confidential treatment. If you are a registered stockholder and would like your vote kept confidential, please check the appropriate box on the proxy card or follow the instructions when submitting your vote by telephone, mobile phone, or by the Internet. If you hold your shares in “street name” or through an employee benefit plan or stock incentive plan, your vote already receives confidential treatment and you do not need to request confidential treatment in order to maintain the confidentiality of your vote.

The confidential voting policy will not apply in the event of a proxy contest or other solicitation based on an opposition Proxy Statement and in certain other limited circumstances. For further details regarding this policy, please see the Corporate Governance Guidelines, available on Citi’s website www.citigroup.com.



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Could other matters be decided at the Annual Meeting?


We don’t know of any other matters that will be considered at the Annual Meeting. If a stockholder proposal that was excluded from this Proxy Statement is brought before the meeting, the Chairman will declare such proposal out of order, and it will be disregarded, or we will vote the proxies against the proposal. If any other matters arise at the Annual Meeting that are properly presented at the meeting, the proxies will be voted at the discretion of the proxy holders.


What happens if the meeting is postponed or adjourned?


Your proxy will still be good and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted.


Do I need a ticket to attend the Annual Meeting?


Yes, you will need an admission ticket or proof of ownership of Citi common stock to enter the Annual Meeting. When you arrive at the Annual Meeting, you may be asked to present photo identification, such as a driver’s license.


•If you received a Notice of Internet Availability of Proxy Materials, you must bring the Notice to gain admission to the Annual Meeting.

•If you did not receive a Notice but received a paper copy of the proxy materials and your shares are held in your name, please bring the admission ticket printed on the top half of the proxy card supplied with your materials.

•If you did not receive a Notice but received a paper copy of the proxy materials and your shares are held in the name of a bank, broker, or other holder of record, please bring the admission ticket that was enclosed with your materials.

•If you receive your proxy materials by e-mail, you will need proof of ownership to be admitted to the Annual Meeting. A recent brokerage statement or letter from a bank or broker is an example of proof of ownership.

• If you arrive at the meeting without an admission ticket, we will admit you only if we are able to verify that you are a Citi stockholder. If you hold your shares in a joint account, both owners can be admitted to the Annual Meeting, provided that proof of joint ownership is given. Citi will not be able to accommodate guests at the Annual Meeting. Any persons needing special assistance should contact Shareholder Relations by phone at 1-860-291-4262 or at the following e-mail address: shareholderrelations@citi.com.




HOW WE HAVE DONE


ANNUAL REPORT


If you received these materials by mail, you should have also received Citi’s Annual Report to Stockholders for 2015 with them. The 2015 Annual Report is also available on Citi’s website at www.citigroup.com. We urge you to read these documents carefully. In accordance with the SEC’s rules, the Five-Year Performance Graph appears in the 2015 Annual Report on Form 10-K.



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CORPORATE GOVERNANCE


Citigroup Inc. (Citigroup, Citi, or the Company) continually strives to maintain the highest standards of ethical conduct: reporting results with accuracy and transparency and maintaining full compliance with the laws, rules and regulations that govern Citi’s businesses. Citi is active in ensuring its governance practices are at the leading edge of best practices. Below is a compilation of Citi’s Corporate Governance initiatives:




•Adopted, in 2015, proxy access;

•Formed a standing Ethics and Culture Committee of the Board of Directors to oversee management’s efforts to foster a culture of ethics within Citi;

•Adopted strong executive compensation governance practices, including expanded clawback policies and a requirement that executive officers must hold a substantial amount of vested Citi common stock for at least one year after they cease being executive officers;

•Amended our Corporate Governance Guidelines to provide that members of Citi’s Board of Directors and Citi’s Executive Officers (i.e., Section 16 Insiders) are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan;

•Eliminated super-majority vote provisions contained in our Restated Certificate of Incorporation;

•Amended our By-laws, after electing an independent Chair in 2009, to provide that if Citi does not have an independent Chairman of the Board, the Board shall elect a lead independent Director;

•Amended our By-laws to include a majority vote standard for uncontested Director elections;

•Amended our By-laws to give stockholders of at least 25% of the outstanding common stock the right to call a special meeting;






Made the Board and executive officers subject to a stock ownership commitment;






Permitted stockholders to act by written consent;






Amended our Political Activities Statement (formerly Citi’s Political Contributions and Lobbying Statement) to increase disclosure about our lobbying practices and oversight. The Political Activities Statement provides meaningful disclosure about:






our lobbying policies and procedures including grassroots lobbying;






payments made by Citi for direct lobbying;






trade and business association participation;






membership in any tax-exempt group that writes and endorses model legislation; and






the Board’s oversight of lobbying activities, trade and business association participation, and political contributions;






Amended the charter of the Nomination, Governance and Public Affairs Committee to clarify that the Committee has oversight responsibility for trade association payments in addition to oversight responsibility for political contributions and lobbying activities;






Provided more clarity on our political contributions and trade and business association disclosure by:






creating a link on our website to federal and state government websites where our lobbying activities are reported;






initiating a process to require trade and business associations to which Citi pays dues to attest that no portion of such payments are used for independent expenditures; and






listing the names of our significant trade and business associations on Citi’s website.









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CORPORATE GOVERNANCE MATERIALS AVAILABLE ON
CITI’S WEBSITE


In addition to our Corporate Governance Guidelines, other information relating to corporate governance at Citi is available on the Corporate Governance section of our website, including:


• Audit Committee Charter

•Ethics and Culture Committee Charter

• Nomination, Governance and Public Affairs Committee Charter

•Personnel and Compensation Committee Charter

• Risk Management Committee Charter

•Code of Conduct

•Code of Ethics for Financial Professionals

•Citi’s Compensation Philosophy

•By-laws and Restated Certificate of Incorporation

• Corporate Political Activities Statement

• A list of our 2015 Political Contributions and the names of Citi’s significant trade and business associations

Citi stockholders may obtain printed copies of these documents by writing to Citigroup Inc., Corporate Governance, 601 Lexington Avenue, 19th Floor, New York, NY 10022.


CORPORATE GOVERNANCE GUIDELINES


Citi’s Corporate Governance Guidelines embody many of our long-standing practices, policies, and procedures, which are the foundation of our commitment to best practices. The Guidelines are reviewed at least annually, and revised as necessary, to continue to reflect best practices. The full text of the Guidelines, as approved by the Board, is set forth on Citi’s website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Corporate Governance Guidelines.” The Guidelines outline the responsibilities, operations, qualifications, and composition of the Board.

Our goal is that at least two-thirds of the members of the Board be independent. A description of our independence criteria and the results of the Board’s independence determinations are set forth below.

The Guidelines require that all members of the required committees of the Board (Audit; Nomination, Governance and Public Affairs; and Personnel and Compensation) be independent. Committee members are appointed by the Board upon recommendation of the Nomination, Governance and Public Affairs Committee. Committee membership and Chairs are rotated periodically. The Board and each Committee have the power to hire and fire independent legal, financial or other advisors, as they may deem necessary, without consulting or obtaining the approval of management. Meetings of the non-management Directors are held as part of every regularly scheduled Board meeting and are presided over by the independent Chairman.

The number of other for-profit public or non-public company boards on which a Director may serve is subject to a case-by-case review by the Nomination, Governance and Public Affairs Committee, in order to ensure that each Director is able to devote sufficient time to performing his or her duties as a Director. Interlocking directorates are prohibited (inside Directors and executive officers of Citi may not sit on boards of companies where a Citi outside Director is an executive officer).


If a Director has a substantial change in professional responsibilities, occupation or business association, he or she is required to notify the Nomination, Governance and Public Affairs Committee and to offer his or her resignation from the Board. The Nomination, Governance and Public Affairs Committee will evaluate the facts and circumstances and make a recommendation to the Board whether to accept the resignation or request that



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the Director continue to serve on the Board. If a Director assumes a significant role in a not-for-profit entity, he or she is asked to notify the Nomination, Governance and Public Affairs Committee.


Directors are expected to attend Board meetings and meetings of the Committees on which they serve and the Annual Meeting of stockholders. All of the Directors then in office, except for Ernesto Zedillo Ponce de Leon, attended Citi’s 2015 Annual Meeting (either in person or via audioconference). Mr. Zedillo Ponce de Leon was unable to attend the 2015 Annual Meeting as he was unexpectedly called away to participate in a peacekeeping mission in Russia.


The Nomination, Governance and Public Affairs Committee nominates one of the members of the Board to serve as Chairman of the Board on an annual basis. The Nomination, Governance and Public Affairs Committee also conducts an annual review of Board performance, and each standing committee (except for the Executive Committee) conducts its own self-evaluation. As part of the self-evaluation, the Board engages in an examination of its own performance of its obligations on such matters as regulatory requirements, strategic and financial oversight, oversight of risk management, executive compensation, succession planning, and governance matters, among many others topics. The committees evaluate themselves against the requirements of their charters and other aspects of their responsibilities. The full Board and each committee then discuss the results of its own self-evaluation in executive session, highlighting actions to be taken in response to the discussion.


Directors have full and free access to senior management and other employees of Citi. New Directors are provided with an orientation program to familiarize themselves with Citi’s businesses and its legal, compliance, regulatory and risk profile. Citi provides educational sessions on a variety of topics, which all members of the Board are invited to attend. These sessions are designed to allow Directors to, for example, develop a deeper understanding of a business issue or a complex financial product.


The Board reviews the Personnel and Compensation Committee’s report on the performance of senior executives in order to ensure that they are providing the highest quality leadership for Citi. The Board also works with the Nomination, Governance and Public Affairs Committee to evaluate potential successors to the Chief Executive Officer (CEO).


If a Director, or an immediate family member who shares the Director’s household, serves as a director, trustee or executive officer of a foundation, university, or other not-for-profit organization, and such entity receives contributions from Citi and/or the Citi Foundation, such contributions must be reported to the Nomination, Governance and Public Affairs Committee at least annually.


Members of Citi’s Board of Directors and Citi’s executive officers (i.e., Section 16 Insiders) are not permitted to hedge their Citi securities or to pledge their Citi securities as collateral for a loan. The Guidelines restrict certain financial transactions between Citi and its subsidiaries on the one hand and Directors, senior management and their immediate family members on the other. Personal loans from Citi or its subsidiaries to Citi’s Directors and its most senior executives, or immediate family members who share any such person’s household, are prohibited, except for mortgage loans, home equity loans, consumer loans, credit cards, overdraft checking privileges and margin loans to employees of a broker-dealer subsidiary of Citi made on market terms in the ordinary course of business. See Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation on pages 20-22 of this Proxy Statement.


The Guidelines prohibit investments or transactions by Citi or its executive officers and those immediate family members who share an executive officer’s household in a partnership or other privately held entity in which an outside Director is a principal or in a publicly traded company in which an outside Director owns or controls more than a 10% interest. Directors and those immediate family members who share the Director’s household are not permitted to receive initial public offering allocations. Directors and their immediate family members may participate in Citi-sponsored investment activities, provided they are offered on the same terms as those offered to similarly situated non-affiliated persons. Under certain circumstances, or with the approval of the appropriate committee, members of senior management may participate in certain Citi-sponsored investment opportunities. Finally, there is a prohibition on certain investments by Directors and executive officers in third-party entities when the opportunity comes solely as a result of their position with Citi.



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DIRECTOR INDEPENDENCE


The Board has adopted categorical standards to assist the Board in evaluating the independence of each of its Directors. The categorical standards, which are set forth below, describe various types of relationships that could potentially exist between a Director or an immediate family member of a Director and Citi, and set thresholds at which such relationships would be deemed to be material. Provided that no relationship or transaction exists that would disqualify a Director under the categorical standards and no other relationships or transactions exist of a type not specifically mentioned in the categorical standards that, in the Board’s opinion, taking into account all facts and circumstances, would impair a Director’s ability to exercise his or her independent judgment, the Board will deem such person to be independent.


The Board and the Nomination, Governance and Public Affairs Committee reviewed certain information obtained from Directors’ responses to a questionnaire asking about their relationships with Citi, and those of their immediate family members and primary business or charitable affiliations and other potential conflicts of interest, as well as certain data collected by Citi’s businesses related to transactions, relationships or arrangements between Citi on the one hand and a Director, immediate family member of a Director, or a primary business or charitable affiliation of a Director, on the other. The Board reviewed certain relationships or transactions between the Directors or immediate family members of the Directors or their primary business or charitable affiliations and Citi and determined that the relationships or transactions complied with the Corporate Governance Guidelines and the related categorical standards. The Board also determined that, applying the Guidelines and standards, which are intended to comply with the NYSE corporate governance rules, and all other applicable laws, rules and regulations, each of the following Director nominees standing for election or re-election is independent:

• Ellen M. Costello
• Duncan P. Hennes
• Peter B. Henry
• Franz B. Humer
• Renée J. James
• Michael E. O’Neill
• Gary M. Reiner
• Judith Rodin
• Anthony M. Santomero
• Joan E. Spero
• Diana L. Taylor
• William S. Thompson, Jr.
• James S. Turley
• Ernesto Zedillo Ponce de Leon


The Board has determined that Michael L. Corbat and Eugene M. McQuade are not independent. Mr. Corbat is our Chief Executive Officer and Mr. McQuade previously served as the Chief Executive Officer of Citibank, N.A., our largest banking subsidiary.


Independence Standards

To be considered independent, a Director must meet the following categorical standards as adopted by our Board and reflected in our Corporate Governance Guidelines. In addition, there are other independence standards under NYSE corporate governance rules that apply to all directors and certain independence standards under SEC and FDIC rules that apply to specific committees.

Categorical Standards

•Advisory, Consulting and Employment Arrangements

➤ During any 12-month period within the last three years, neither a Director nor any immediate family member of a Director shall have received from the Company, directly or indirectly, any compensation, fees or benefits in an amount greater than $120,000, other than amounts paid (a) pursuant to the Company’s Amended and Restated Compensation Plan for Non-Employee Directors or (b) to an immediate family member of a Director who is a non-executive employee of the Company or one of its affiliated legal entities.

➤ In addition, no member of the Audit Committee, nor any immediate family member who shares such individual’s household, nor any entity in which an Audit Committee member is a partner, member or executive officer shall, within the last three years, have received any payment for accounting, consulting, legal, investment banking or financial advisory services provided to the Company.


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Business Relationships




➤ All business relationships, lending relationships, deposit and other banking relationships between the Company and a Director’s primary business affiliation or the primary business affiliation of an immediate family member of a Director must be made in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons.


➤ In addition, the aggregate amount of payments for property or services in any of the last three fiscal years by the Company to, and to the Company from, any company of which a Director is an executive officer or employee or where an immediate family member of a Director is an executive officer, must not exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues in any single fiscal year.


➤ Loans may be made or maintained by the Company to a Director’s primary business affiliation or the primary business affiliation of an immediate family member of a Director, only if the loan: (i) is made in the ordinary course of business of the Company or one of its subsidiaries, is of a type that is generally made available to other customers, and is on market terms, or terms that are no more favorable than those offered to other customers; (ii) complies with applicable law, including the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley), Regulation O of the Board of Governors of the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) Guidelines; (iii) when made does not involve more than the normal risk of collectability or present other unfavorable features; and (iv) is not classified by the Company as Substandard (II) or worse, as defined by the Office of the Comptroller of the Currency in its “Rating Credit Risk” Comptroller’s Handbook.




Charitable Contributions




Annual contributions in any of the last three calendar years from the Company and/or the Citi Foundation to a charitable organization of which a Director, or an immediate family member who shares the Director’s household, serves as a Director, trustee or executive officer (other than the Citi Foundation and other charitable organizations sponsored by the Company) may not exceed the greater of $250,000 or 10% of the charitable organization’s annual consolidated gross revenue.




Employment/Affiliations




➤ A Director shall not:




(i)


be or have been an employee of the Company within the last three years;



(ii)


be part of, or within the past three years have been part of, an interlocking directorate in which a current executive officer of the Company serves or has served on the compensation committee of a company that concurrently employs or employed the Director as an executive officer; or



(iii)


be or have been affiliated with or employed by (a) the Company’s present or former primary outside auditor or (b) any other outside auditor of the Company and personally worked on the Company’s audit, in each case within the three-year period following the auditing relationship.



➤ A Director may not have an immediate family member who:




(i)


is an executive officer of the Company or has been within the last three years;



(ii)


is, or within the past three years has been, part of an interlocking directorate in which a current executive officer of the Company serves or has served on the compensation committee of a company that concurrently employs or employed such immediate family member as an executive officer; or



(iii)


(a) is a current partner of the Company’s outside auditor, or a current employee of the Company’s outside auditor and personally works on the Company’s audit, or (b) was within the last three years (but is no longer) a partner of or employed by the Company’s outside auditor and personally worked on the Company’s audit within that time.





Immaterial Relationships and Transactions




The Board may determine that a Director is independent notwithstanding the existence of an immaterial relationship or transaction between the Company and (i) the Director, (ii) an immediate



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family member of the Director or (iii) the Director’s or immediate family member’s business or charitable affiliations, provided the Company’s Proxy Statement includes a specific description of such relationship as well as the basis for the Board’s determination that such relationship does not preclude a determination that the Director is independent. Relationships or transactions between the Company and (i) the Director, (ii) an immediate family member of the Director or (iii) the Director’s or immediate family member’s business or charitable affiliations that comply with the Corporate Governance Guidelines, including but not limited to the Director Independence Standards that are part of the Corporate Governance Guidelines and the sections titled Financial Services, Personal Loans and Investments/Transactions, are deemed to be categorically immaterial and do not require disclosure in the Proxy Statement (unless such relationship or transaction is required to be disclosed pursuant to Item 404 of SEC Regulation S-K).




Definitions




For purposes of the Corporate Governance Guidelines, (i) the term “immediate family member” means a Director’s or executive officer’s (designated as such pursuant to Section 16 of the Securities Exchange Act of 1934) spouse, parents, step-parents, children, step-children, siblings, mother- and father-in law, sons- and daughters-in-law, and brothers- and sisters-in-law and any person (other than a tenant or domestic employee) who shares the Director’s household; (ii) the term “primary business affiliation” means an entity of which the Director or executive officer, or an immediate family member of such a person, is an officer, partner or employee or in which the Director, executive officer or immediate family member owns directly or indirectly at least a 5% equity interest; and (iii) the term “related party transaction” means any financial transaction, arrangement or relationship in which (a) the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, (b) the Company is a participant, and (c) any related person (any Director, any executive officer of the Company, any nominee for Director, any stockholder owning in excess of 5% of the total equity of the Company, and any immediate family member of any such person) has or will have a direct or indirect material interest.


MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES






The Board of Directors met 20 times in 2015. During 2015, the Audit Committee met 18 times, the Ethics and Culture Committee met six times, the Nomination, Governance and Public Affairs Committee met eight times, the Operations and Technology Committee met six times, the Personnel and Compensation Committee met 13 times, and the Risk Management Committee met 15 times. The Executive Committee did not meet in 2015.


During 2015, Mses. Spero and Taylor and Messrs. Hennes, McQuade, Santomero, Thompson, Turley and Zedillo served on and/or chaired a number of ad hoc committees covering such topics as compliance and M&A matters and international subsidiary governance. In addition, during 2015, Mses. Spero and Taylor and Messrs. Hennes, Henry, McQuade, Reiner, Santomero and Turley served on the Board of Directors of Citibank, N.A., which is a wholly owned subsidiary of Citi.


Each incumbent director attended at least 75% of the meetings of the Board and of the standing committees of which he or she was a member during 2015.



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MEETINGS OF NON-MANAGEMENT DIRECTORS


Citi’s non-management Directors meet in executive session without any management Directors in attendance each time the full Board convenes for a regularly scheduled meeting, which is usually six times each year, and, if the Board convenes a special meeting, the non-management Directors ordinarily meet in executive session. During 2015, Mr. O’Neill presided at each executive session of the non-management Directors. In addition, the independent Directors met in executive session during 2015.


BOARD LEADERSHIP STRUCTURE


Citi currently has an independent Chairman separate from the CEO. The Board believes it is important to maintain flexibility in its Board leadership structure and has had in place different leadership structures over the past years, depending on the Company’s needs at the time, but firmly supports having an independent Director in a Board leadership position at all times. Accordingly, Citi’s Board, on December 15, 2009, adopted a By-law amendment which provides that if Citi does not have an independent Chairman, the Board shall elect a lead independent Director having similar duties to an independent Chairman, including leading the executive sessions of the non-management Directors at Board meetings. Citi’s Chairman provides independent leadership of the Board. Having an independent Chairman or lead Director enables non-management Directors to raise issues and concerns for Board consideration without immediately involving management. The Chairman or Lead Director also serves as a liaison between the Board and senior management. Citi’s Board has determined that the current structure, an Independent Chair, separate from the CEO, is the most appropriate structure at this time, while ensuring that, at all times, there will be an independent Director in a Board leadership position. The Board believes its approach to risk oversight, including, importantly, the reporting line of the Chief Risk Officer to the Risk Management Committee, ensures that the Board can choose many leadership structures without experiencing a material impact on its oversight of risk.




Citi has had an independent Chairman since 2009.






BOARD DIVERSITY


Diversity is among the critical factors that the Nomination, Governance and Public Affairs Committee considers when evaluating the composition of the Board. For a company like Citi, which operates in more than 100 countries around the globe, diversity includes race, ethnicity and gender as well as the diversity of the communities and geographies in which Citi operates. Included in the qualifications for Directors listed in the Company’s Corporate Governance Guidelines is “whether the candidate has special skills, expertise and background that would complement the attributes of the existing Directors, taking into consideration the diverse communities and geographies in which the Company operates.” Citi’s Board is committed to ensuring that it is comprised of individuals whose backgrounds reflect the diversity represented by our employees, customers and stakeholders. The candidates nominated for election at Citi’s 2016 Annual Meeting exemplify that diversity: five nominees are women (31%) and two nominees (13%) are African-American or Hispanic. In addition, each Director candidate contributes to the Board’s overall diversity by providing a variety of perspectives, personal and professional experiences and backgrounds, as well as other characteristics, such as global and international business experience. The Board believes that the current nominees reflect an appropriate diversity of gender, age, race, geographical background and experience and is committed to continuing to consider diversity issues in evaluating the composition of the Board.




Citi recently added two women to our Board bringing total representation to 5 women of 16 directors, or 31%.






BOARD’S ROLE IN RISK OVERSIGHT


The Board oversees Citi’s global risk management framework. At each regularly scheduled Board meeting, the Board receives a risk report from the Chief Risk Officer with respect to the Company’s approach to management of major risks, including management’s risk mitigation efforts, where appropriate. Global Risk Management, led by the Chief Risk Officer, is a company-wide function that is responsible for an integrated effort to identify, assess and manage risks that may affect Citi’s ability to execute on its corporate strategy and



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fulfill its business objectives. The Board’s role is to oversee this effort. The Risk Management Committee enhances the Board’s oversight of risk management. The Committee’s role is one of oversight, recognizing that management is responsible for executing Citi’s risk management policies. The Chief Risk Officer reports to both the Risk Management Committee and the Chief Executive Officer. The Committee’s responsibilities include reviewing risk management and compliance policies and programs for, and reporting on, Citi and its subsidiaries; approving and adjusting risk limits subject to ratification by the Board; and consulting with management on the effectiveness of risk identification, measurement, and monitoring processes, and the adequacy of staffing and action plans, as needed. In addition, the Nomination, Governance and Public Affairs Committee reviews reputational issues and the Personnel and Compensation Committee reviews compensation programs to ensure that they do not, among other things, encourage imprudent risk-taking. The Risk Management Committee also meets on a monthly basis to provide oversight over matters related to resolution and recovery planning, Citi’s Comprehensive Capital Analysis and Review (CCAR) practices, Resolution Planning, and Citi’s compliance with the Volcker Rule of the Dodd-Frank Act.


COMMITTEES OF THE BOARD OF DIRECTORS


The standing committees of the Board of Directors are:


The Audit Committee, which assists the Board in fulfilling its oversight responsibility relating to (i) the integrity of Citigroup’s consolidated financial statements, financial reporting process and systems of internal accounting and financial controls; (ii) the performance of the internal audit function (“Internal Audit”); (iii) the annual independent integrated audit of Citigroup’s consolidated financial statements and effectiveness of Citigroup’s internal control over financial reporting, the engagement of the independent registered public accounting firm (“Independent Auditors”) and the evaluation of the Independent Auditors’ qualifications, independence and performance; (iv) policy standards and guidelines for risk assessment and risk management; (v) Citigroup’s compliance with legal and regulatory requirements, including Citigroup’s disclosure controls and procedures; and (vi) the fulfillment of the other responsibilities set out herein. The report of the Committee required by the rules of the Securities and Exchange Commission is included in this Proxy Statement.


The Board has determined that each of Ms. Costello and Messrs. O’Neill, Santomero, and Turley qualifies as an “audit committee financial expert” as defined by the SEC and each such director as well as Mr. Henry are considered “financially literate” under NYSE rules, and, in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each is independent within the meaning of applicable SEC rules, the corporate governance rules of the NYSE, and the FDIC guidelines.


The Audit Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”


The Ethics and Culture Committee, which oversees Management’s efforts to foster a culture of ethics within the organization; oversees and helps shape the definition of Citi’s value proposition; oversees Management’s efforts to enhance and communicate Citi’s value proposition, evaluates Management’s progress, and provides feedback on these efforts; reviews and assesses the culture of the organization to determine if further enhancements are needed to foster ethical decision-making by employees; and oversees Management’s efforts to support ethical decision-making in the organization, evaluate Management’s progress, and provide feedback on these efforts. The Committee also reviews Citi’s Code of Conduct and the Code of Ethics for Financial Professionals.


The Ethics and Culture Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citigroup Board of Directors’ Committee Charters.”


The Executive Committee, which acts on behalf of the Board if a matter requires Board action before a meeting of the full Board can be held.


The Nomination, Governance and Public Affairs Committee, which is responsible for identifying individuals qualified to become Board members and recommending to the Board the Director nominees for the next Annual Meeting of stockholders. It leads the Board in its annual review of the Board’s performance and makes recommendations as to the composition of the committees for appointment by the Board. The Committee takes a leadership role in shaping corporate governance policies and practices, including recommending to the



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Board the Corporate Governance Guidelines and monitoring Citi’s compliance with these policies and practices and the Guidelines. The Committee is responsible for reviewing and approving all related party transactions involving a Director or an immediate family member of a Director and any related party transaction involving an executive officer or immediate family member of an executive officer if the transaction is valued at $50 million or more, in each case, other than certain enumerated ordinary course transactions. See Certain Transactions and Relationships, Compensation Committee Interlocks, and Insider Participation on pages 20-22 of this Proxy Statement for a complete description of the Policy on Related Party Transactions. The Committee, as part of the Board’s executive succession planning process, in conjunction with the Personnel and Compensation Committee, evaluates and nominates potential successors to the CEO and provides an annual report to the Board on CEO succession. The Committee also reviews Director Compensation and Benefits. The Nomination, Governance and Public Affairs Committee is also responsible for reviewing Citi’s policies and programs that relate to public issues of significance to Citi and the public at large and reviewing relationships with external constituencies and issues that impact Citi’s reputation. The Committee also has responsibility for reviewing public policy and reputational issues facing Citi; reviewing political contributions and lobbying expenditures and payments to trade associations made by Citi, charitable contributions made by Citi and the Citi Foundation; reviewing Citi’s policies and practices regarding supplier diversity; reviewing the work of Citi’s Business Practices Committees; and reviewing Citi’s sustainability policies and programs, including environmental policies. The Committee’s focus is global, reflecting Citi’s global footprint.


With respect to regular succession of the CEO and senior management, Citi’s Board evaluates internal, and, when appropriate, external candidates. To find external candidates, Citi seeks input from the members of the Board and senior management and/or from recruiting firms. To develop internal candidates, Citi engages in a number of practices, formal and informal, designed to familiarize the Board with Citi’s talent pool. The formal process involves an annual talent review conducted by senior management at which the Board studies the most promising members of senior management. The Board learns about each person’s experience, skills, areas of expertise, accomplishments, and goals. This review is conducted at a regularly scheduled Board meeting on an annual basis. In addition, members of senior management are periodically asked to make presentations to the Board at Board meetings and at the Board strategy sessions. These presentations are made by senior managers at the various business units as well as those who serve in corporate functions. The purpose of the formal review and other interaction is to ensure that Board members are familiar with the talent pool inside Citi from which the Board would be able to choose successors to the CEO and evaluate succession for other senior managers as necessary from time to time.


The Board has determined that, in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each of the members of the Nomination, Governance and Public Affairs Committee is independent according to the corporate governance rules of the NYSE.


The Nomination, Governance and Public Affairs Committee Charter, as adopted by the Board, is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Board of Directors’ Committee Charters.”


The Operations and Technology Committee, which is responsible for overseeing the scope, direction, quality, and execution of Citi’s technology strategies formulated by management; and providing guidance on technology as it may pertain to, among other things, Citi business products and technology platforms.


The Personnel and Compensation Committee, which has been delegated broad authority to oversee compensation of employees of the Company and its subsidiaries and affiliates. The Committee will regularly review Citi’s management resources and performance of senior management. The Committee is responsible for determining the compensation for the CEO and approving the compensation of other executive officers of the Company and members of Citi’s Operating Committee. The Committee is also responsible for approving the incentive compensation structure for other members of senior management and certain highly compensated employees (including discretionary incentive awards to covered employees as defined in applicable bank regulatory guidance), in accordance with guidelines established by the Committee from time to time. The Committee also has broad oversight over compliance with bank regulatory guidance governing Citi’s incentive compensation.


The Committee annually reviews and discusses the Compensation Discussion and Analysis required to be included in the Company’s Proxy Statement with management, and, if appropriate, recommends to the Board that the Compensation Discussion and Analysis be included. Additionally, the Committee reviews and



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approves the overall goals of Citi’s material incentive compensation programs, including as expressed through Citi’s Compensation Philosophy and provides oversight for Citi’s incentive compensation programs so that they both (i) appropriately balance risk and financial results in a manner that does not encourage employees to expose Citi to imprudent risks, and (ii) are consistent with bank safety and soundness. Toward that end, the Committee meets periodically with Citi’s Chief Risk Officer to discuss the risk attributes of Citi’s incentive compensation programs.


The Committee has the power to hire and fire independent compensation consultants, legal counsel, or financial or other advisors as it may deem necessary to assist it in the performance of its duties and responsibilities, without consulting or obtaining the approval of senior management of the Company. The Committee has retained Frederic W. Cook & Co. (Cook & Co.) to provide the Committee with advice on Citi’s compensation programs for senior management. The amount paid to Cook & Co. in 2015 is disclosed in the Compensation Discussion and Analysis on page 75 of this Proxy Statement.


The Board has determined that in addition to being independent according to the Board’s independence standards as set out in its Corporate Governance Guidelines, each of the members of the Personnel and Compensation Committee is independent according to the corporate governance rules of the NYSE. Each of such Directors is a “non-employee Director,” as defined in Section 16 of the Securities Exchange Act of 1934, and is an “outside Director,” as defined by Section 162(m) of the Internal Revenue Code.


The Personnel and Compensation Committee Charter is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Board of Directors’ Committee Charters.”


The Risk Management Committee, which has been delegated authority to assist the Board in fulfilling its responsibility with respect to (i) oversight of Citigroup’s risk management framework, including the significant policies and practices used in managing credit, market, operational, and certain other risks; (ii) oversight of Citigroup’s policies and practices relating to funding risk, liquidity risk and price risk, which constitute significant components of market risk, and risks pertaining to capital management; and (iii) oversight of the performance of the Fundamental Credit Risk credit review function. The Committee reports to the Board of Directors regarding Citigroup’s risk profile, as well as its risk management framework, including the significant policies and practices employed to manage risks in Citigroup’s businesses, as well as the overall adequacy of the Risk Management function.


The Risk Management Committee Charter is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Board of Directors’ Committee Charters.”


The following table shows the current membership of each of the Committees.




Committees


Current Members



Audit Committee


Ellen M. Costello


Peter B. Henry


Michael E. O’Neill


Anthony M. Santomero


James S. Turley (Chair)



Ethics and Culture Committee


Franz B. Humer (Chair)


Michael E. O’Neill


Judith Rodin


Ernesto Zedillo Ponce de Leon



Executive Committee


Franz B. Humer


Michael E. O’Neill (Chair)


Anthony M. Santomero


Diana L. Taylor


William S. Thompson, Jr.


James S. Turley



Nomination, Governance and Public Affairs
Committee

Michael E. O’Neill
Judith Rodin
Diana L. Taylor (Chair)
Ernesto Zedillo Ponce de Leon



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Committees

Current Members

Operations and Technology Committee
Gary M. Reiner (Chair)
Renée J. James

Personnel and Compensation Committee
Michael E. O’Neill
Judith Rodin
Diana L. Taylor
William S. Thompson. Jr. (Chair)

Risk Management Committee
Duncan P. Hennes
Franz B. Humer
Renée J. James
Eugene M. McQuade
Anthony M. Santomero (Chair)
William S. Thompson. Jr.
James S. Turley
Ernesto Zedillo Ponce de Leon


INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS


There are no legal proceedings to which any Director, officer, or principal stockholder, or any affiliate thereof, is a party adverse to Citi or has a material interest adverse to Citi.


CERTAIN TRANSACTIONS AND RELATIONSHIPS, COMPENSATION COMMITTEE INTERLOCKS, AND INSIDER PARTICIPATION

The Board has adopted a policy setting forth procedures for the review, approval, and monitoring of transactions involving Citi and related persons (Directors and executive officers or their immediate family members). A copy of Citi’s Policy on Related Party Transactions is available on our website at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Citi Policies.” Under the policy, the Nomination, Governance and Public Affairs Committee is responsible for reviewing and approving all related party transactions involving Directors or an immediate family member of a Director. Directors may not participate in any discussion or approval of a related party transaction in which he or she or any member of his or her immediate family is a related person, except that the Director must provide all material information concerning the related party transaction to the Nomination, Governance and Public Affairs Committee. The Nomination, Governance and Public Affairs Committee is also responsible for reviewing and approving all related party transactions valued at more than $50 million involving an executive officer or an immediate family member of an executive officer. The Transaction Review Committee, comprised of the Chief Financial Officer, Chief Risk Officer, General Counsel, Chief Compliance Officer, and the Head of Public Affairs, is responsible for reviewing and approving all related party transactions valued at less than $50 million involving an executive officer or an immediate family member of an executive officer. The policy also contains a list of categories of transactions involving Directors or executive officers, or their immediate family members who are pre-approved under the policy, and therefore need not be brought to the Nomination, Governance and Public Affairs Committee or the Transaction Review Committee for approval.


The Nomination, Governance and Public Affairs Committee and the Transaction Review Committee will review the following information when assessing a related party transaction:


• the terms of such transaction;

• the related person’s interest in the transaction;

• the purpose and timing of the transaction;

• whether Citi is a party to the transaction, and if not, the nature of Citi’s participation in the transaction;


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• if the transaction involves the sale of an asset, a description of the asset, including date acquired and cost basis;

• information concerning potential counterparties in the transaction;

• the approximate dollar value of the transaction and the approximate dollar value of the related person’s interest in the transaction;

• a description of any provisions or limitations imposed as a result of entering into the proposed transaction;

• whether the proposed transaction includes any potential reputational risk issues that may arise as a result of or in connection with the proposed transaction; and

• any other relevant information regarding the transaction.

Based on information contained in a Schedule 13G filed with the SEC, BlackRock and Vanguard reported that they beneficially owned 5% or more of the outstanding shares of Citi’s common stock as of December 31, 2015, see Stock Ownership — Owners of More than 5% of Citi Common Stock in this Proxy Statement on page 26. During 2015, our subsidiaries provided ordinary course lending, trading, and other financial services to BlackRock and Vanguard and their respective affiliates and clients. These transactions were entered into on an arm’s length basis and contain customary terms and conditions and were on substantially the same terms as comparable transactions with unrelated third parties.


Citi has established funds in which employees have invested. In addition, certain of our executive officers have from time to time invested their personal funds directly, or directed that funds for which they act in a fiduciary capacity be invested, in funds arranged by Citi’s subsidiaries on the same terms and conditions as the other outside investors in these funds, who are not our executive officers, or employees. Other than certain “grandfathered” investments, in accordance with Sarbanes-Oxley and the Citi Corporate Governance Guidelines, executive officers may invest in certain Citi-sponsored investment opportunities only under certain circumstances and with the approval of the appropriate committee.


Citigroup Capital Partners II, L.P. and Citigroup Venture Capital International Growth Partnership II, L.P. are funds that were formed in 2006 and 2007, respectively. They invest either directly or via a master fund in private equity investments. Citi matches each dollar invested by an employee with an additional two-dollar commitment to each fund, or feeder fund, in which an employee has invested. Citi’s match is made by a loan to the fund. Each eligible employee, subject to vesting, receives the benefit of any increase in the value of the fund attributable to the loan made by Citi, less the interest paid by the fund on the loan, as well as any increase in the value of the fund attributable to the employee’s own investment. In accordance with the funds’ offering memoranda, executive officers are not eligible to participate in the funds on a leveraged basis.


The following distributions exceeding $120,000 with respect to investments in Citigroup Capital Partners II, L.P. and Citigroup Venture Capital International Growth Partnership II, L.P. were made to executive officers in 2015:


Citigroup Capital
Partners II, L.P.
Cash Distributions

Michael Corbat
$ 143,418

James Cowles
$ 339,585

James Forese
$ 286,836

Manuel Medina-Mora*
$ 226,390

Citigroup Venture
Capital International
Growth Partnership II, L.P.
Cash Distributions

James Cowles
$ 708,536

James Forese
$ 314,905

Manuel Medina-Mora*
$ 629,809

William Mills
$ 314,905

* Mr. Medina-Mora retired from Citigroup in 2015.

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In 2015, Citi performed corporate banking and securities brokerage services in the ordinary course of our business for certain organizations in which some of our Directors are officers or directors. In addition, in the ordinary course of business, Citi may use the products or services of organizations in which some of our Directors are officers or directors.


The persons listed on page 76 of this Proxy Statement are the current members of the Personnel and Compensation Committee. No current or former member of the Personnel and Compensation Committee was a part of a “compensation committee interlock” during fiscal year 2015 as described under SEC rules. In addition, none of our executive officers served as a director or member of the compensation committee of another entity that would constitute a “compensation committee interlock.” No member of the Personnel and Compensation Committee had any material interest in a transaction with Citi or is a current or former officer of Citi, and no member of the Personnel and Compensation Committee is a current employee of Citi or any of its subsidiaries. In addition, no member of the Board, or any immediate family member of the Board, engaged Cook & Co. for any compensation-related services in 2015.


Mr. Corbat has entered into an Aircraft Time Sharing Agreement with Citiflight, Inc. (a subsidiary of Citigroup Inc.) that allows him to reimburse Citi for the cost of his personal use of corporate aircraft based on the aggregate incremental cost of the flight to Citi. Aggregate incremental cost is calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent service or, if higher, the charge allowed under Federal Aviation Regulation 91.501(d). Mr. Corbat reimbursed Citi $140,077 related to his personal use of corporate aircraft during 2015.


For a portion of 2015, Mr. McQuade served as the Vice Chairman of Citigroup Inc. Mr. McQuade received approximately $176,164 as compensation for his service as the Vice Chairman of Citigroup from January 1, 2015 to May 1, 2015. Mr. McQuade’s compensation relates solely to his service as an employee and not as a director of Citigroup. His compensation for his service as a director is reported in the Director Compensation Table on pages 47-50 of this Proxy Statement. In 2015, certain previously awarded shares granted to Mr. McQuade when he was an employee of Citigroup vested; this included Performance Share Units and Capital Accumulation Program Awards. On February 19, 2013, Mr. McQuade received from Citi an award of Performance Share Units in a target award of 47,801.15. Based on adjustments due to performance conditions described in the Compensation Discussion and Analysis section of this Proxy Statement, Mr. McQuade was entitled to receive 32,456.98 Performance Share Units on February 19, 2016, when the share units vested. Performance Share Units are paid in cash and Mr. McQuade received a cash payment of $1,315,270 for the share units on February 19, 2016. On February 18, 2014, Mr. McQuade received from Citi an award of Performance Share Units in a target award of 44,398.36. Those share units are scheduled to vest on December 31, 2016. During his employment at Citi, Mr. McQuade also received shares of Citi common stock awarded under the Capital Accumulation Program. Approximately 40,242 shares vested on January 20, 2016, representing the deferred portion of Mr. McQuade’s annual incentive awards for 2011, 2012, and 2013 which was awarded to him under the Capital Accumulation Program. These shares are reported in the Beneficial Ownership Table on page 25 of this Proxy Statement. Mr. McQuade has 34,149 unvested shares remaining from his Capital Accumulation Program Awards. These unvested shares remain subject to fluctuations in Citi’s common stock price as well as the Citi Clawbacks. In addition, Mr. McQuade was granted 100,000 Stock Options in 2011 at a grant price of $49.10, which vested in three equal installments. The expiration date for the Stock Options is February 14, 2017. The Stock Options are reported on page 25 of this Proxy Statement.


An adult child of Mr. Humer, a Director, is employed by Citi’s Institutional Clients Group and received 2015 compensation of $751,082. An adult child of John Gerspach, Citi’s CFO, is employed in Citi’s Compliance function and received 2015 compensation of $129,000. The compensation for these employees was established by Citi in accordance with its employment and compensation practices applicable to employees with equivalent qualifications and responsibilities and holding similar positions. Mr. Humer and Mr. Gerspach do not have a material interest in the employment relationship nor share a household with their respective family members who are employees of Citi.


INDEBTEDNESS


Other than certain “grandfathered” margin loans, in accordance with Sarbanes-Oxley and the Citi Corporate Governance Guidelines, no margin loans may be made to any executive officer unless such person is an employee of a broker-dealer subsidiary of Citi and such loan is made in the ordinary course of business.



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Certain transactions in excess of $120,000 involving loans, deposits, credit cards, and sales of commercial paper, certificates of deposit, and other money market instruments and certain other banking transactions occurred during 2015 between Citibank, N.A. and other Citi banking subsidiaries on the one hand and certain Directors or executive officers of Citi, members of their immediate families, corporations or organizations of which any of them is an executive officer or partner or of which any of them is the beneficial owner of 10% or more of any class of securities, or associates of the Directors, the executive officers or their family members on the other. The transactions were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, that prevailed at the time for comparable transactions with other persons not related to the lender and did not involve more than the normal risk of collectability or present other unfavorable features. Personal loans made to any Director or an executive officer must comply with Sarbanes-Oxley, Regulation O and the Corporate Governance Guidelines, and must be made in the ordinary course of business.


BUSINESS PRACTICES COMMITTEES


The business practices committees for each of Citi’s businesses and regions review business activities, sales practices, product design, potential conflicts of interest, and other franchise or reputational risk issues escalated to these committees. The business practices committee at the corporate level reviews issues escalated by a business practices committee at the business or regional level that may present franchise, reputational and/or systemic risks. All reviews by the business practices committees are conducted with due consideration of the context and facts presented to the committees.


The business practices committees, which are comprised of our most senior executives, provide the guidance necessary for Citi’s business practices to meet the highest standards of professionalism, integrity, and ethical behavior consistent with Citi’s Mission and Value Proposition. Our business leaders, in addition to confirming our commitment to the principles of responsible finance and protecting Citi’s franchise, are responsible for establishing a framework for compliance with applicable laws and regulations, Citi policies and ethical standards.


Business practices concerns may be raised through a variety of sources, including business practices working groups, other in-business committees, or the control functions. Relevant issues from the business practices committees are reported on a regular basis to the Nomination, Governance and Public Affairs Committee of the Board.


CODE OF ETHICS FOR FINANCIAL PROFESSIONALS


The Citi Code of Ethics for Financial Professionals applies to Citi’s Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Financial Officer) and Controller (Principal Accounting Officer) and all Finance Professionals and Administrative Staff in a finance role, including Controllers, CSS Finance & Risk Operations (RO), Financial Planning & Analysis, Treasury, Tax, Strategy and M&A, Investor Relations and the Regional/Business teams. Citi expects all of its employees to act in accordance with the highest standards of personal and professional integrity in all aspects of their activities, to comply with all applicable laws, rules and regulations, to deter wrongdoing and abide by the Citi Code of Conduct and other policies and procedures adopted by Citi that govern the conduct of its employees. The Code of Ethics is intended to supplement the Citi Code of Conduct. A copy of the Code of Ethics is available on our website at www.citigroup.com. Click on “About Us” then “Corporate Governance,” and then “Code of Ethics for Financial Professionals.” We will disclose amendments to, or waivers from, the Code of Ethics, if any, on our website.


ETHICS HOTLINE


Citi expects employees to raise concerns or questions regarding ethics, discrimination or harassment matters, and to promptly report suspected violations of these and other applicable laws, regulations, Citi policies, procedures or standards. Citi offers several channels by which employees and others may report ethical concerns, including, without limitation, concerns about accounting, internal controls or auditing matters. We provide a global Ethics Hotline, a toll-free number that is available 24 hours a day, seven days a week, 365 days a year, and is staffed by live operators who can connect to translators to accommodate multiple languages.



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Calls to the Ethics Hotline are received by a third-party vendor, located in the United States, which reports the calls to the Citi Ethics Office for handling. Ethical concerns may also be reported through a dedicated e-mail address, multi-lingual website submission, fax line, and conventional mailing address. Any individual may also raise a concern by accessing Citi’s public-facing corporate website. Individuals may choose to remain anonymous to the extent permitted by applicable laws and regulations. We prohibit retaliatory actions against anyone who raises concerns or questions in good faith, or who participates in a subsequent investigation of such concerns.


CODE OF CONDUCT


The Board has adopted a Code of Conduct, which provides an overview of the laws, regulations and Citi policies and procedures applicable to the activities of Citi, and sets forth the standards of ethics and professional behavior expected of employees and representatives of Citi. The Code of Conduct applies to every Director, officer and employee of Citi and its consolidated subsidiaries. All Citi employees, directors, and officers are required to read and comply with the Code of Conduct. In addition, other persons performing services for Citi may be subject to the Code of Conduct by contract or other agreement. The Code of Conduct is publicly available in multiple languages at www.citigroup.com. Click on “About Us,” then “Corporate Governance,” and then “Code of Conduct.”


COMMUNICATIONS WITH THE BOARD


Stockholders or other interested parties who wish to communicate with a member or members of the Board, including the Chairman or the non-management Directors as a group, may do so by addressing their correspondence to the Board member or members, c/o the Corporate Secretary, Citigroup Inc., 388 Greenwich Street, New York, NY 10013. The Board of Directors has approved a process pursuant to which the office of the Corporate Secretary will review and forward correspondence to the appropriate person or persons for response.



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STOCK OWNERSHIP


Citi has long encouraged stock ownership by its Directors, officers and employees to align their interests with the long-term interests of stockholders. The Board and executive officers are subject to a stock ownership commitment, which requires these individuals to maintain a minimum ownership level of Citigroup stock. Executive officers are required to retain at least 75% of the equity awarded to them as incentive compensation (net of amounts required to pay taxes and option exercise prices) as long as they are executive officers. In addition, a stock holding period applies after the executive officer leaves Citi or is no longer an executive officer. He or she must retain, for one year after ending executive officer status, 50% of the shares previously subject to the stock ownership commitment. Directors are similarly required to retain at least 75% of the net equity awarded to them, further aligning their interests with stockholders. The Board may revise the terms of the stock ownership commitment from time to time to reflect legal and business developments warranting a change. In addition, Directors and executive officers may not enter into hedging transactions in respect of Citi’s common stock or other securities issued by Citi, including securities granted by the Company to the Director or executive officer as part of his or her compensation and securities purchased or acquired by the Director or executive officer in a non-compensatory transaction.


The following table shows the beneficial ownership of Citi common stock by our Directors and certain executive officers at February 29, 2016. For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act, pursuant to which a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock that such person has the right to acquire within 60 days of the date of determination.


Beneficial Ownership Table




Name


Common
Stock
Beneficially
Owned
Excluding
Options(1)


Options
Exercisable
Within 60
Days


Owned by or Tenant
in Common with
Family Member,
Trust, Mutual Fund
or 401(K)(2)


Total
Beneficial
Ownership


Receipt
Deferred(3)


Total



Stephen Bird
173,583
100,000
95,000
368,583

368,583


Don Callahan
198,973
188,982

387,955

387,955


Ellen M. Costello






4,048

4,048


Michael Corbat
263,281
150,000
1,781
415,062

415,062

James Forese
279,371
234,490

513,861

513,861


John Gerspach
107,662
150,000
124,197
381,859

381,859

Duncan P. Hennes
6,418


6,418
4,048
10,466

Peter B. Henry
2,297


2,297
4,048
6,345

Franz B. Humer
13,642


13,642
4,048

17,690

Renée J. James




4,048

4,048

Eugene M. McQuade
23,032
100,000
72,802
195,834
4,048

199,882

Michael E. O'Neill
89,587

53,200
142,787


142,787

Gary M. Reiner
12,296


12,296
4,048

16,344

Judith Rodin
34,456

36
34,492
4,048

38,540

Anthony M. Santomero
29,547


29,547
4,048

33,595


Joan E. Spero
22,264


22,264
4,048

26,312

Diana L. Taylor
21,679


21,679
4,048

25,727

William S. Thompson, Jr.
2,974

90,815
93,789
4,048

97,837


James S. Turley
7,543


7,543
4,048

11,591

Ernesto Zedillo Ponce de Leon
20,332


20,332
4,048

24,380

Total (29 Directors and Executive Officers as a group)

1,962,620

1,233,313

459,214

3,655,147

56,672

3,711,819




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STOCK OWNERSHIP



(1) The stock reported for certain directors in this column includes deferred common stock which is fully vested and which the director or directors have the right to acquire within 60 days.

(2) Stock held as a tenant-in-common with a family member or trust, owned by a family member, held by a trust for which the Director or executive officer is a trustee but not a beneficiary or held by a mutual fund which invests substantially all of its assets in Citi common stock.

(3) Amounts represent Directors’ deferred common stock. The deferred common stock vests immediately; however, if a Director retired or resigned from the Board during the year of grant, the Director would forfeit a pro rata portion of the award.

At February 29, 2016, no Director or executive officer owned as much as 1% of Citi’s common stock.

At February 29, 2016, all of the Directors and executive officers as a group beneficially owned approximately 0.13% of Citi’s common stock.

Mr. Reiner also owns 485 depositary shares of Citi’s 5.9% Fixed/Float Non-Cumulative Preferred Stock, Series B, which represents 0.065% of such series of preferred stock.

Mr. Thompson also owns 18,768 depositary shares of Citi’s 6.875% Fixed/Float Non-Cumulative Preferred Stock, Series K, which represents .03% of such series of preferred stock.

Mr. Callahan also owns 4,170 depositary shares of Citi’s 6.3% Noncumulative Preferred Stock, Series S, which represents 0.01% of such series of preferred stock.

Mr. Mills also owns 1,000 depositary shares of Citi’s 5.95% Fixed/Floating Rate Noncumulative Preferred, Series Q, which represents 0.08% of such series of preferred stock.

Owners of More than 5% of Citi Common Stock

Name and Address of Beneficial Owner

Beneficial Ownership

Percent of Class


BlackRock Inc(a)
55 East 52nd Street, New York, NY 10055
Amount beneficially owned
201,894,757

6.8 %


The Vanguard Group Inc(b)
100 Vanguard Blvd., Malvern, PA 19355
Amount beneficially owned
163,849,049
5.5 %

(a) Based on the Schedule 13G filed with the SEC on January 21, 2016 by BlackRock and certain subsidiaries, BlackRock reported that it had sole voting power over 175,501,366 shares; shared voting power over 138,851 shares; had sole dispositive power over 201,755,906 shares; and shared dispositive power over 138,851 shares. The Schedule 13G states that the shares are beneficially owned by funds and accounts managed by BlackRock and any economic interests of the securities covered is held by BlackRock for the benefits of the funds and accounts and not for BlackRock’s own account.

(b)  Based on the Schedule 13G filed with the SEC on February 11, 2016 by Vanguard and certain subsidiaries, Vanguard reported that it had sole voting power over 5,536,750 shares; sole dispositive power over 157,971,836 shares; shared voting power over 304,100 shares; and shared dispositive power over 5,877,213 shares. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 4,628,966 shares or .15% of Citi’s Common Stock as a result of its serving as investment manager of collective trust accounts. In addition, Vanguard Investments Australia, Ltd., a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 2,156,031 shares or .07% of Citi’s Common Stock as a result of its serving as investment manager of Australian investment offerings.



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE


Section 16(a) of the Securities Exchange Act of 1934 requires Citi’s officers and Directors, and persons who own more than 10% of a registered class of Citi’s equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE, and to furnish Citi with copies of the forms. Based on its review of the forms it received, or written representations from reporting persons, Citi believes that, during 2015, each of its officers and Directors complied with all such filing requirements.



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Proposal 1: Election of Directors



The Board has nominated all of the current Directors for re-election at the 2016 Annual Meeting. Each of the Director nominees that currently served on the Board was elected by the stockholders at the 2015 Annual Meeting of Stockholders, except for Ms. Costello, Ms. James and Mr. McQuade, who were previously elected by the Board in 2015. Mses. Costello and James were identified as potential Directors by Egon Zehnder, the Board’s nominating consultant. Mr. McQuade was recommended as a candidate for election to the Citigroup Board by his fellow directors on the Citibank Board, all of whom are members of Citigroup’s Board. If elected, each nominee will hold office until the 2017 Annual Meeting or until his or her successor is elected and qualified.


The one-year term of all of Citi’s Directors expires at the Annual Meeting.


DIRECTOR CRITERIA AND NOMINATION PROCESS


The Nomination, Governance and Public Affairs Committee considers all qualified candidates identified by members of the Nomination, Governance and Public Affairs Committee, by other members of the Board, by senior management and by security holders. During 2015, the Committee engaged Egon Zehnder to assist in identifying and evaluating potential nominees. Stockholders who would like to propose a Director candidate for consideration by the Nomination, Governance and Public Affairs Committee may do so by submitting the candidate’s name, résumé and biographical information to the attention of the Corporate Secretary, Citigroup Inc., 388 Greenwich Street, New York, NY 10013. All proposals for nominations received by the Corporate Secretary will be presented to the Committee for its consideration.


The Nomination, Governance and Public Affairs Committee reviews each candidate’s biographical information and assesses each candidate’s independence, skills and expertise based on a variety of factors, including the following criteria, which have been developed by the Nomination, Governance and Public Affairs Committee and approved by the Board:


• Whether the candidate has exhibited behavior that indicates he or she is committed to the highest ethical standards;

• Whether the candidate has had business, governmental, non-profit or professional experience at the chairman, chief executive officer, chief operating officer or equivalent policy-making and operational level of a large organization with significant international activities across many regulatory jurisdictions and regions that indicates that the candidate will be able to make a meaningful and immediate contribution to the Board’s discussion of and decision-making on the array of complex issues facing a large financial services business that operates on a global scale;

• Whether the candidate has special skills, expertise and background that would complement the attributes of the existing Directors, taking into consideration the diverse communities and geographies in which the Company operates;

• Whether the candidate has the financial expertise required to provide effective oversight of a diversified financial services business that operates on a global scale;

• Whether the candidate has achieved prominence in his or her business, governmental, or professional activities and has built a reputation that demonstrates the ability to make the kind of important and sensitive judgments that the Board is called upon to make;

• Whether the candidate will effectively, consistently, and appropriately take into account and balance the legitimate interests and concerns of all of the Company’s stockholders and other stakeholders in reaching decisions, rather than advancing the interests of a particular constituency;

• Whether the candidate possesses a willingness to challenge management while working constructively as part of a team in an environment of collegiality and trust;

• Whether the candidate will be able to devote sufficient time and energy to the performance of his or her duties as a Director.



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ELECTION OF DIRECTORS


Application of these factors involves the exercise of judgment by the Nomination, Governance and Public Affairs Committee and the Board.


Based on its assessment of each candidate’s independence, skills and qualifications and the criteria described above, the Nomination, Governance and Public Affairs Committee will make recommendations regarding potential Director candidates to the Board.


The Nomination, Governance and Public Affairs Committee follows the same process and uses the same criteria for evaluating candidates proposed by stockholders, members of the Board of Directors and members of senior management. For the 2016 Annual Meeting, Citi did not receive notice from any stockholders regarding a nomination to the Board of Directors.


DIRECTOR QUALIFICATIONS


The nominees for the Board of Directors each have the qualifications and experience to approve and guide Citi’s strategy and to oversee management’s execution of that strategic vision. Citi’s Board of Directors consists of individuals with the skills, experience and backgrounds necessary to oversee Citi’s efforts toward becoming a simpler, smaller, safer, and stronger financial institution, while mitigating risk and operating within a complex financial and regulatory environment.


The nominees listed below are leaders in business, the financial community, and academia because of their intellectual acumen and analytic skills, strategic vision, ability to lead and inspire others to work with them, and records of outstanding accomplishments over a period of decades. Each has been chosen to stand for election in part because of his or her ability and willingness to ask difficult questions, understand Citi’s unique challenges, and evaluate the strategies proposed by management, as well as their implementation.


Each of the nominees has a long record of professional integrity, a dedication to his or her profession and community, a strong work ethic that includes coming fully prepared to meetings and being willing to spend the time and effort needed to fulfill professional obligations, the ability to maintain a collegial environment, and the experience of having served as a Board member of a sophisticated global company.


Many of our nominees are either current or former chief executive officers or chairmen of other large international corporations or have experience operating large, complex academic, governmental or philanthropic institutions or departments. As such, they have a deep understanding of, and extensive experience in, many of the areas that are outlined below as being of critical importance to Citi’s proper operation and success. For the purposes of its analysis, the Board has determined that nominees who have served as a chief executive officer or a chairman of a major corporation or large, complex institution have extensive experience with financial statement preparation, compensation determinations, regulatory compliance (if their businesses are or were regulated), corporate governance, public affairs, and legal matters.


In evaluating the composition of the Board, the Nomination, Governance and Public Affairs Committee seeks to find and retain individuals who, in addition to having the qualifications set forth in Citi’s Corporate Governance Guidelines, have the skills, experience and abilities necessary to meet Citi’s unique needs as a highly regulated financial services company with operations in the corporate and consumer business within the United States and more than 100 countries around the globe. The Committee has determined it is critically important to Citi’s proper operation and success that its Board has, in addition to the qualities described above, expertise and experience in the following areas:


• Compensation. Citi’s Personnel and Compensation Committee is responsible for determining the compensation of the CEO and approving the compensation of other executive officers of the Company and members of Citi’s Operating Committee. In order to properly carry out its responsibilities with respect to compensation, Citi’s Board must include members who have experience evaluating the structure of compensation for senior executives. They must understand the various forms of compensation that can be utilized, the purpose of each type and how various elements of compensation can be used to motivate and reward executives and drive performance, while not encouraging imprudent risk-taking or simply having short-term goals.






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ELECTION OF DIRECTORS



• Consumer Business. With more than 200 million customer accounts, Citi provides services to its retail customers in connection with its retail banking, credit card, consumer finance, real estate lending, personal loans, investment services, auto loans, small- and middle-market commercial banking, and other financial services businesses. Citi looks to its Board members with extensive consumer experience to assist it in evaluating its business model and strategies for reaching and servicing its retail customers domestically and around the world.

• Corporate Affairs. Citi’s reputation is a vital asset in building trust with its clients and other stakeholders, and Citi makes every effort to communicate its corporate values to its stockholders and clients, its achievements in the areas of corporate social responsibility, sustainability, and philanthropy, and its efforts to improve the communities in which we live and work. Members of the Board with experience in the areas of corporate affairs, philanthropy, communications, and corporate social responsibility assist management by reviewing Citi’s policies and programs that relate to significant public issues, as well as by reviewing Citi’s relationships with external stakeholders and issues that impact Citi’s reputation.

• Institutional Business. Citi provides a wide variety of services to its corporate clients, including strategic and financial advisory services, such as mergers, acquisitions, financial restructurings, loans, foreign exchange, cash management, underwriting and distributing equity, and debt and derivative services; and global transaction services, including treasury and trade solutions and securities and fund services. With a corporate business as extensive and complex as Citi’s, it is crucial that members of the Board have the depth of understanding and experience necessary to guide management’s conduct of these lines of business.


• Corporate Governance. Citi aspires to the highest standards of corporate governance and ethical conduct: doing what we say, reporting results with accuracy and transparency, and maintaining compliance with the laws, rules and regulations that govern the Company’s businesses. The Board is responsible for shaping corporate governance policies and practices, including adopting the corporate governance guidelines applicable to the Company and monitoring the Company’s compliance with governance policies and the guidelines. To carry out these responsibilities, the Board must include experienced leaders in the area of corporate governance who must be familiar with governance issues, the constituencies most interested in those issues and the impact that governance policies have on the functioning of a company.

• Financial Reporting. Citi’s internal controls over financial reporting are designed to ensure that Citi’s financial reporting and its financial statements are prepared in accordance with generally accepted accounting principles. While the Board and its committees are not responsible for preparing our financial statements, they have oversight responsibility, including the selection of outside independent auditors, subject to stockholder ratification. The Board must include members with direct or supervising experience in the preparation of financial statements, as well as finance and accounting expertise.

• Financial Services Industry. Citi is a global diversified bank whose businesses provide a broad range of financial services to consumer and institutional customers, making it critically important that its Board include members who have deep financial services backgrounds. The nominees include many individuals with extensive financial institution experience.

• International Business or Economics. As a company with a broad international reach, Citi’s Board values the perspectives of Directors with international business or governmental experience or expertise in international economics. Citi’s presence in markets outside the United States is an important competitive advantage for Citi, because it allows us to serve U.S. and foreign businesses and individual clients whose activities span the globe. Directors with international business experience can use the experience that they have developed through their own business dealings to assist Citi’s Board and management in understanding and successfully navigating the business, political, and regulatory environments in countries in which Citi does, or seeks to do, business. Directors with international economics expertise can help guide Citi management in developing its global strategy.



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ELECTION OF DIRECTORS

• Legal Matters. In addition to the regulatory supervision described below, Citi is subject to myriad laws and regulations and is party to various legal actions and regulatory proceedings. Citi’s Board has an important oversight function with respect to compliance with applicable requirements, monitors the progress of legal proceedings, and evaluates major settlements. Citi’s Board must include members with experience in complying with regulatory requirements, as well as understanding complex litigation and litigation strategies.

• Operations and Technology. Citi has a long history as a technology innovator — Citibank, N.A. was one of the first banks to offer automatic teller machines for its customers during the 1970s. Since then, Citi has expanded its technology to include such products as online banking; mobile and tablet banking; mobile check deposit; eBills; and Popmoney®. Financial institutions rely on gathering, processing, analyzing, and providing information in order to meet the needs of their customers, and, for Citi, it is crucial to be at the forefront of technology innovations. Citi must be able to use and protect its data and must be able to access its data to ensure that it complies with regulatory requirements including anti-money laundering, sanctions, and other security issues. In addition, Citi must ensure that its operations are efficient, enhancing productivity to meet our strategic goals. The Board must include members that have knowledge and experience in technology, including such technology-driven issues as privacy and cybersecurity, data management, and the changing supervisory and regulatory technology landscape, as well as customer-friendly technology, and operations. Members of the Board provide oversight of Citi’s technology initiatives to service its consumer and institutional clients; the maintenance of Citi’s technology platforms; Citi’s compliance with regulatory requirements; Citi’s efficiency and productivity strategies; and the use and protection of customer data.

• Regulatory Compliance. Citi and its subsidiaries are regulated and supervised by numerous regulatory agencies, both domestically and internationally, including in the U.S. the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, state banking and insurance departments, as well as international financial services authorities. Having Directors with experience interacting with regulators or operating businesses subject to extensive regulation is important to furthering Citi’s continued compliance with its many regulatory requirements and fostering productive relationships with its regulators.

• Risk Management. Risk management is a critical function of a complex global financial services company and its proper supervision requires Board members with sophisticated risk management skills and experience. Directors provide oversight of the Company’s risk management framework, including the significant policies, procedures and practices used in managing credit, market and certain other risks, and review recommendations by management regarding risk mitigation. Citi’s Board must include members with risk expertise to assist Citi in its efforts to properly identify, measure, monitor, report, analyze, and control or mitigate risk.



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ELECTION OF DIRECTORS

THE NOMINEES


The following tables give information — provided by the nominees — about their principal occupation, business experience, and other matters.


Each nominee’s biography highlights his or her particular skills, qualifications and experience that support the conclusion of the Nomination, Governance and Public Affairs Committee that the nominee is extremely qualified to serve on Citi’s Board.


BOARD RECOMMENDATION

The Board of Directors recommends that you vote FOR each of the following nominees.

Name and Age
at Record Date
Position, Principal Occupation, Business Experience and Directorships



Michael L. Corbat
55
Chief Executive Officer
Citigroup Inc.
• Chief Executive Officer, Citigroup Inc. – October 2012 to Present
• Chief Executive Officer, Europe, Middle East and Africa – December 2011 to October 2012
• Chief Executive Officer, Citi Holdings – January 2009 to December 2011
• Chief Executive Officer, Citi’s Global Wealth Management – September 2008 to January 2009
• Head of Global Corporate Bank and Global Commercial Bank – March 2008 to September 2008
• Head of Global Corporate Bank – April 2007 to March 2008
• Head of Global Relationship Bank – March 2004 to April 2007
• Head of EM Sales & Trading and Capital Markets, FICC – October 2001 to March 2004
• Head of EM Sales & Fixed Income Origination – March 1988 to October 2001
• Director of Citigroup since 2012
• Other Directorships: None
• Previous Directorships within the last five years: EMI
• Other Activities: British/American Business, Inc. (Director), New York City Partnership (Director), The U.S. Ski & Snowboard Team Foundation (Director), The Clearing House Association (Member of the Supervisory Board), Financial Services Forum (Member), Institute of International Finance (Board Member), and International Business Council of WEF (Member)

Skills and Qualifications


Mr. Corbat is an experienced financial services executive and finance professional and has been nominated to serve on the Board because of his extensive experience and expertise in the areas of Financial Services, Risk Management, Financial Reporting, International Business, Corporate and Consumer Business, Regulatory Compliance and Corporate Affairs. In his role as Chief Executive Officer of Citigroup Inc., his prior experience as Citi’s CEO of Europe, Middle East and Africa, and his extensive career at Citi he has gained experience in all of Citi’s business operations, including consumer banking, corporate and investment banking, securities and trading and private banking services. In these roles, Mr. Corbat has gained extensive financial services, financial reporting, corporate business, and risk management experience. Additionally, in his role as CEO of Citi Holdings, Citi’s portfolio of non-core businesses and assets, he oversaw the divestiture of more than 40 businesses, including the IPO and sale of Citi’s remaining stake in Primerica. Mr. Corbat also successfully oversaw the restructuring of Citi’s consumer finance and retail partner cards businesses and divested more than $500 billion in assets, reducing risk on the Company’s balance sheet and freeing up capital to invest in Citi’s core banking business.



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ELECTION OF DIRECTORS



Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships



Ellen M. Costello
61
Former President, Chief Executive Officer, BMO Financial Corporation and Former U.S. Country Head, BMO Financial Group
• President and CEO, BMO Financial Corporation and U.S. Country Head, BMO Financial Group – 2011 to July 2013
• Group Head, Personal and Commercial Banking, U.S. and President and Chief Executive Officer, BMO Harris Bank N.A., BMO Financial Group – 2006 to 2011
• Vice Chairman and Head, Securitization and Credit Investment Management, Merchant Banking and Head of N.Y. Office, Capital Markets Group, BMO Financial Group – 2000 to 2006
• Executive Vice President, Strategic Initiatives, Capital Markets Group, BMO Financial Group – 2000
• Executive Vice President and Head, Global Treasury Group, BMO Financial Group – 1997 to 1999
• Senior Vice President and Deputy Treasurer, Global Treasury Group, BMO Financial Group – 1995 to 1997
• Managing Director and Regional Treasurer, Asia Pacific, Global Treasury Group, BMO Financial Group – 1993 to 1994
• Managing Director and Head, North American Financial Product Sales, Global Treasury Group, BMO Financial Group – 1991 to 1993
• Director of Citigroup since 2016
• Director of Citibank, N.A. since 2016
• Other Directorships: DH Corporation
• Previous Directorships within the last five years: BMO Financial Corporation
• Other Activities: The United Way of Metropolitan Chicago (Board), Chicago Council on Global Affairs (Board), Economic Club of Chicago (Member)


Skills and Qualifications


Ms. Costello is an experienced financial services executive and has been nominated to serve on the Board because of her extensive skills and experience in the areas of Financial Services, Risk Management, Institutional and Consumer Businesses, Financial Reporting and Regulatory Compliance. In her 30 years at BMO Financial Group, a Global Financial Institution, Ms. Costello acquired extensive experience in personal and commercial banking, wealth management and capital markets businesses in Canada, Asia and the U.S. In her roles in Global Treasury and Global Capital Markets, she gained experience in corporate, institutional and investment banking, securities, trading and asset management. As CEO of BMO Harris Bank N.A., Ms. Costello gained experience in personal and commercial banking, strategic planning, marketing, regulatory compliance, financial reporting and personnel matters. Additionally, as CEO, BMO Financial Corporation and U.S. Country Head, she gained further experience in regulatory compliance, including capital and resolution planning, risk management and governance. Her board service at DH Corporation gives her experience with global operations and financial technologies businesses. Ms. Costello’s extensive financial services background also adds significant value to Citi’s and Citibank’s relationships with various regulators and stakeholders.




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ELECTION OF DIRECTORS



Name and Age
at Record Date


Position, Principal Occupation, Business Experience and Directorships



Duncan P. Hennes
59
Co-Founder and Partner
Atrevida Partners, LLC
• Co-Founder and Partner, Atrevida Partners, LLC – June 2007 to Present
• Co-Founder and Partner, Promontory Financial Group – 2000 to 2006
• Chief Executive Officer, Soros Fund Management – 1999 to 2000
• Executive Vice President/Treasurer, Bankers Trust Company – 1987 to 1999
• Audit Manager, Arthur Andersen & Co. – 1979 to 1987
• Director of Citigroup since 2013
• Director of Citibank, N.A. since 2013
• Other Directorships: Syncora Holdings, Ltd.
• Previous Directorships within the last five years: None
• Other Activities: Freeman & Co. (Advisory Board)

Skills and Qualifications


Mr. Hennes is an experienced financial services professional and has been nominated to serve on the Board because of his extensive experience and expertise in the areas of Financial Services, Risk Management, Financial Reporting, Institutional Business, Regulatory Compliance, and Corporate Affairs. In his role as the Co-Founder of Atrevida Partners, LLC and his prior experience at Promontory Financial Group and Bankers Trust Corporation, he has gained extensive experience in financial services, regulatory compliance, corporate and investment banking, and securities and trading. While at Bankers Trust Corporation, Mr. Hennes was Chairman of Oversight Partners I, the consortium of 14 firms that participated in the equity recapitalization of Long-Term Capital Management. As the Chairman of Oversight Partners I, Mr. Hennes gained experience in credit and risk management, and personnel matters. Additionally, in his role as CEO of Soros Fund Management, Mr. Hennes gained experience in investing, operational infrastructure, and trading, including arbitrage activities. Mr. Hennes’s experience as a Certified Public Accountant has also given him audit, financial reporting, and risk management expertise.



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ELECTION OF DIRECTORS


Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships


Peter B. Henry
46
Dean
New York University, Leonard N. Stern School of Business
• Dean, New York University, Leonard N. Stern School of Business – January 2010 to Present
• Faculty Member, Stanford University – 1997 to 2009
• Fellow, National Science Foundation – 1993 to 1996
• Director of Citigroup since 2015
• Director of Citibank, N.A. since 2015
• Other Directorships: None*
• Previous Directorships within the last five years: Kraft Foods Inc. and Kraft Foods Group, Inc. (split into two companies in October 2012)
• Other Activities: British-American Business Council, Council on Foreign Relations (Board), National Bureau of Economic Research (Board), and the Economic Club of New York (Board)

Skills and Qualifications


Dr. Henry, a leading academic and seasoned international economist, has been nominated to serve on the Board because of his extensive expertise in the areas of International Business and Economics, Financial Services, Risk Management, Financial Reporting, Consumer Business, Corporate Affairs, and Governance. As a renowned international economist, he shares important perspectives with the Board on emerging markets, which is a focus of Citi’s strategy. The experience he has gained in his role as Dean of the Leonard N. Stern School of Business enables him to provide an important perspective to the Board’s discussions on public affairs, financial and operational matters. As a former member of the Board of Kraft Foods Group, Inc. and its Audit and Governance Committees, Dr. Henry has gained valuable insights about the Consumer Business environment, financial reporting, and governance. Dr. Henry’s governmental advisory roles, including leadership of President Obama’s Transition Team’s review of international lending agencies and his service as an economic advisor to governments in developing and emerging markets, have given him valuable insights and perspectives on international business and financial services. Dr. Henry brings to the Board extensive experience in executive leadership at a large private university, including a robust understanding of the issues facing companies and governments in both mature and emerging markets around the world.

* Dr. Henry has been nominated to serve on the Board of General Electric Company (“GE”). The shareowners of GE will vote on his election at their 2016 Annual Meeting.


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ELECTION OF DIRECTORS

Name and Age
at Record Date
Position, Principal Occupation, Business Experience and Directorships

Franz B. Humer
69
Former Chairman
Roche Holding Ltd
• Chairman, Roche Holding Ltd – 2008 to March 2014
• Chairman & Chief Executive Officer, Roche Group – 2001 to 2008
• Chief Executive Officer, Roche Group – 1998 to 2001
• Chief Operating Officer, F. Hoffmann-La Roche Ltd – 1996 to 1998
• Head of Pharmaceuticals, F. Hoffmann-La Roche Ltd – 1995 to 1996
• Director of Citigroup since 2012
• Other Directorships: Diageo plc (Chairman) and Kite Pharmaceuticals
• Previous Directorships within the last five years: Roche Holdings Inc.
• Other Activities: International Centre for Missing and Exploited Children (Chairman), Humer Foundation, Bial Pharmaceuticals, Chugai Pharmaceuticals Ltd., and WISeKey (Member of the Board)


Skills and Qualifications


Mr. Humer is an experienced executive and has been nominated to serve on the Board because of his extensive experience in the areas of International and Consumer Business, Financial Reporting, Risk Management, Compensation, Regulatory Compliance, and Corporate Governance. Mr. Humer gained extensive experience in international and consumer business, risk management, compensation, regulatory compliance, financial reporting, and corporate governance in his roles as CEO and Chair of Roche Holding and other executive positions at Roche, his roles as an executive at GlaxoSmithKline Plc and Schering Plough, as well as in his service as Chair of Diageo plc. With his many years of experience leading large, complex global organizations in the U.S. and in Europe in an extensively regulated industry, Mr. Humer is able to offer insights on the implementation of business strategies in major global markets, advise on regulatory compliance, and provide strategic guidance on the development and expansion of important franchises and brands. As a former member of the International Advisory Board of Allianz, and as a member of several philanthropic organizations, he is able to provide important perspectives on international and consumer business and corporate affairs.


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ELECTION OF DIRECTORS


Name and Age
at Record Date

Position, Principal Occupation, Business Experience and Directorships


Renée J. James
51
Operating Executive
The Carlyle Group
• Operating Executive, The Carlyle Group – February 2016 to Present
• President, Intel Corporation – 2014 to 2016
• Executive Vice President and Head, Group GM Intel Software and Services Business – 2004 to 2013
• Group Vice President and Division General Manager, Sales and Marketing; Group and General Manager, Microsoft Program Office, Intel – 2001 to 2004
• Division Chief Operating Officer, Intel Online Solutions – 1999 to 2001
• Chief of Staff to Intel Chairman and CEO Andrew Grove – 1995 to 1999
• Director of Citigroup since 2016
• Other Directorships: Oracle Corporation, Sabre Corporation and Vodafone Group Plc
• Previous Directorships within the last five years: VMware, Inc.
• Other Activities: President’s National Security Telecommunications Advisory Committee (Vice Chair)

Skills and Qualifications

Ms. James is an experienced executive and has been nominated to serve on the Board because of her experience in the areas of Technology, and International and Consumer Businesses. Ms. James is currently an Operating Executive with The Carlyle Group in their Media and Technology practice. She is a seasoned technology executive with broad, international experience managing large scale, complex global operations. She had a twenty-eight year career at Intel where she held a variety of positions spanning R&D leadership in both software and hardware and management of global manufacturing. She also has significant experience in emerging technologies and has gained extensive leadership, consumer industry, and technical expertise through the positions she held at Intel and her service on the boards of public technology companies. Ms. James’s expansive knowledge of cybersecurity through the positions she has held at Intel and as the Vice Chair of the National Security Telecommunications Advisory Committee to the President of the United States, will serve Citi well in its next chapter of innovation and in meeting the challenges of operating a financial services company in the 21st century. Through her services on the boards of other prominent international companies (Oracle Corporation, Sabre Corporation and Vodafone Group Plc), Ms. James has developed additional leadership and corporate governance expertise.



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ELECTION OF DIRECTORS



Name and Age
at Record Date
Position, Principal Occupation, Business Experience and Directorships

Eugene M. McQuade
67
Former Vice Chairman, Citigroup Inc. and
Former Chief Executive Officer, Citibank, N.A.
• Vice Chairman, Citigroup Inc. – 2014 to May 2015
• Chief Executive Officer, Citibank, N.A. – July 2009 to April 2014
• Vice Chairman and President, Merrill Lynch Bank – 2008 to 2009
• President and Chief Operating Officer, FreddieMac – 2004 to 2007
• President, Bank of America – 2004
• President and Chief Operating Officer, FleetBoston Financial – 2002 to 2004
• Vice Chairman and Chief Financial Officer, FleetBoston Financial – 1997 to 2002
• Director of Citigroup Inc. since 2015
• Director of Citibank, N.A. since 2009
• Other Directorships: XL Group, plc (Chairman)
• Previous Directorships within the last five years: None
• Other Activities: Promontory Financial Group (Vice Chairman), Boys and Girls Club (Governor), American Ireland Fund (Director), and Catholic Charities of New York (Director)


Skills and Qualifications


Mr. McQuade is an experienced financial services executive and has been nominated to serve on the Board because of his extensive skills and experience in the areas of Financial Services, Risk Management, Institutional and Consumer Business, Financial Reporting and Regulatory Compliance. As the former Chief Executive Officer of Citibank, N.A., he has a deep understanding of all aspects of Citi’s institutional and consumer businesses and has managed Citibank’s capital structure, regulatory compliance, operational risk, and strategic planning. He supervised Citibank’s financial reporting and provided oversight of Citi’s CCAR process. Mr. McQuade has extensive experience and financial expertise through his service in management positions such as CEO, president, vice chairman, chief financial officer and chief operating officer of several global, publicly traded financial institutions. He has gained broad experience in consumer banking and commercial banking through his previous experience at Bank of America, FleetBoston Financial, and Merrill Lynch. In addition, his board service at XL Group, plc gives him experience with global operations and regulated businesses. Through his service on Citi’s Risk Management Committee, he has deepened his risk management experience. Mr. McQuade’s extensive financial services background also adds significant value to Citi’s and Citibank’s relationships with various regulators and stakeholders.







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ELECTION OF DIRECTORS










Name and Age
at Record Date


Position, Principal Occupation, Business Experience and Directorships



Michael E. O’Neill
69





Chairman
Citigroup Inc.




Chairman, Citigroup Inc. – April 2012 to Present






Chairman, Chief Executive Officer and Director, Bank of Hawaii Corporation – 2000 to 2004






Elected Chief Executive Officer, Barclays PLC – 1999






Vice Chairman and Chief Financial Officer, Bank of America – 1995 to 1998






Chief Financial Officer, Continental Bank – 1993 to 1995






Director of Citigroup since 2009






Other Directorships: None






Previous Directorships within the last five years: None






Other Activities: University of Virginia, Darden Graduate School of Business Foundation (Trustee), Economic Club of New York (Trustee), The National WWII Museum (Trustee), USO of Metropolitan New York (Trustee), and FTV Capital (Advisory Board)








Skills and Qualifications


Mr. O’Neill is an experienced financial services executive and has been nominated to serve on the Board because of his extensive experience in the areas of Financial Services, International Business, Institutional and Consumer Business, Regulatory Compliance, Risk Management, and Financial Reporting. As the former Chairman and Chief Executive Officer of the Bank of Hawaii, Vice Chairman and Chief Financial Officer at Bank of America, and Chief Financial Officer of Continental Bank, Mr. O’Neill has had extensive experience and developed his expertise in the areas of financial services, international, corporate and consumer business, regulatory compliance, risk management, and financial reporting. Furthering his regulatory compliance expertise, while at the Bank of Hawaii, Mr. O’Neill served as the 12th District representative of the Federal Reserve Advisory Council. During his tenure at Continental Bank and while he was an independent financial consultant, Mr. O’Neill gained extensive international financial services experience.







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ELECTION OF DIRECTORS










Name and Age
at Record Date


Position, Principal Occupation, Business Experience, and Directorships



Gary M. Reiner
61





Operating Partner
General Atlantic LLC




Operating Partner, General Atlantic LLC – September 2010 to Present






Senior Vice President and Chief Information Officer, General Electric Company – 1996 to 2010






Partner, Boston Consulting Group – 1986 to 1991






Director of Citigroup since 2013






Director of Citibank, N.A. since 2013






Other Directorships: Hewlett-Packard Company and Box Inc.






Previous Directorships within the last five years: None






Other Activities: Norwalk Hospital (Member)








Skills and Qualifications


Mr. Reiner is an experienced executive and has been nominated to serve on the Board because of his experience in the areas of Operations and Technology, Financial Reporting, Corporate Governance, and International and Consumer Business. In his current role as Operating Partner of General Atlantic LLC, he has continued to broaden his considerable expertise in technology and management. Through his tenure as Chief Information Officer at General Electric, Mr. Reiner gained extensive experience in the management of a large, complex, multi-national operation, developing technology innovations, strategic planning and marketing to an international consumer and institutional customer base. He also has significant experience in information technology through his many years of experience as a partner of Boston Consulting Group, where he focused on strategic issues for technology businesses. Mr. Reiner’s expertise as an innovative technology leader assists Citi in meeting the challenges of operating a financial services company in the 21st century. Through his service on the Hewlett Packard Board of Directors, Mr. Reiner has developed additional leadership and corporate governance expertise as the Chair of its Nominating, Governance and Social Responsibility Committee.







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ELECTION OF DIRECTORS










Name and Age
at Record Date


Position, Principal Occupation, Business Experience and Directorships



Judith Rodin
71





President
Rockefeller Foundation




President, Rockefeller Foundation – March 2005 to Present






President Emerita, University of Pennsylvania – 2004 to Present






President, University of Pennsylvania – 1994 to 2004






Provost, Yale University – 1992 to 1994






Director of Citigroup since 2004






Other Directorships: Comcast Corporation






Previous Directorships within the last five years: AMR Corporation






Other Activities: World Trade Memorial Foundation (Director), Carnegie Hall (Director), Laureate Education, Inc. (Director), White House Project (Member), Council on Foreign Relations (Member), and National Academy of Sciences Institute of Medicine (Member)








Skills and Qualifications


Dr. Rodin is an experienced leader in the not-for-profit sector and has been nominated to serve on the Board because of her skills and experience in the areas of Corporate Affairs, Corporate Governance, Compensation, Financial Reporting, Risk Management and Legal Matters. Through her current role as the President of the Rockefeller Foundation, and her previous positions as President of the University of Pennsylvania from 1994 until her retirement in 2004, and as Provost of Yale University from 1992 to 1994, together with her service as a member of the Comcast Audit Committee, Dr. Rodin has had extensive experience in the areas of corporate affairs, financial reporting, risk management and legal matters. As the President of the University of Pennsylvania, which was the largest private employer in Philadelphia, as Chair of the Compensation Committee of Comcast Corporation, and as a Director of Comcast Corporation and Laureate Education, Inc., Dr. Rodin has had extensive experience with compensation matters. Her service as a Director of the World Trade Memorial Foundation, and of Carnegie Hall, as an honorary Director of the Brookings Institution, a member of the Council on Foreign Relations, a member of the Institute of Medicine, and a member of the New York City Commission for Economic Opportunity has deepened her understanding of corporate affairs on local and global scales.







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ELECTION OF DIRECTORS










Name and Age
at Record Date


Position, Principal Occupation, Business Experience and Directorships



Anthony M. Santomero
69





Former President
Federal Reserve Bank of Philadelphia




Senior Advisor, McKinsey & Company – 2006 to January 2008






President, Federal Reserve Bank of Philadelphia – 2000 to 2006






Richard K. Mellon Professor, Finance, The Wharton School at the University of Pennsylvania – 1984 to 2002






Director of Citigroup since 2009






Director of Citibank, N.A. since 2009






Other Directorships: RenaissanceRe Holdings, Ltd. and Penn Mutual Life Insurance Company






Previous Directorships within the last five years: B of A Fund Series Trust






Other Activities: Columbia Funds Series Trust








Skills and Qualifications


Dr. Santomero is a seasoned economist and economic policy advisor and has been nominated to serve on the Board because of his extensive experience in the areas of Risk Management, Regulatory Compliance, Corporate Governance, and Financial Reporting. Among many other distinguished positions at which he had wide-ranging risk and regulatory experience, Dr. Santomero was most recently a Senior Advisor at McKinsey & Company, served as the President of the Federal Reserve Bank of Philadelphia from 2000 to 2006, and was Chair of the System’s Committee on Credit and Risk Management, and was a member of the Financial Services Policy Committee and the Payments System Policy Advisory Committee. As the Richard K. Mellon Professor of Finance at The Wharton School of the University of Pennsylvania and Deputy Dean of the School, Dr. Santomero’s particular focus was on issues related to managing risk at the firm level as well as ways to improve productivity and performance, while working closely with industry executives and practitioners to ensure that the research was informed by the operating realities and competitive demands facing industry participants as they pursue competitive excellence. Through his service on Citi’s Risk Management and Audit Committees as well as the Investment and Risk Management Committee of RenaissanceRe Holdings, he has deepened his risk management experience.







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ELECTION OF DIRECTORS










Name and Age
at Record Date


Position, Principal Occupation, Business Experience and Directorships



Joan E. Spero
71





Senior Research Scholar
Columbia University School of International and Public Affairs




Senior Research Scholar, Columbia University School of International and Public Affairs – November 2010 to Present






Visiting Fellow at the Foundation Center – 2009 to 2010






President and CEO, Doris Duke Charitable Foundation – 1997 to 2008






Under Secretary of State, Economics, Business and Agricultural Affairs – 1993 to 1997






Executive Vice President, Corporate Affairs and Communications, American Express – 1991 to 1993






Senior Vice President and Treasurer, American Express – 1989 to 1991






Vice President, Corporate Affairs, American Express – 1983 to 1989






Vice President, Corporate Strategic Planning, American Express – 1981 to 1983






Director of Citigroup since 2012






Director of Citibank, N.A. since 2012






Other Directorships: IBM and International Paper






Previous Directorships within the last five years: ING Groep N.V.






Other Activities: Council of American Ambassadors (Member), Academy of Diplomacy (Member), American Philosophical Society (Member), Wisconsin Alumni Research Foundation (Trustee), International Center for Transitional Justice (Trustee), Columbia University (Trustee Emeritus), Amherst College (Trustee Emeritus), Council on Foreign Relations (Trustee Emeritus) and Brookings Institution (Trustee Emeritus)








Skills and Qualifications


Ms. Spero has wide-ranging experience, having served as a senior government official, a financial services executive, an academic, a seasoned board member, and as a leader in the not-for-profit sector. She has been nominated to serve on the Board because of her Corporate Governance, Regulatory Compliance, International Business and Economics, Consumer Business, Financial Services, Corporate Affairs, Compensation, and Financial Reporting experience. Ms. Spero gained extensive regulatory compliance and international business experience during her tenure as U.S. Under Secretary of State for Economic, Business and Agricultural Affairs and U.S. Ambassador to the United Nations for Economic and Social Affairs. As an executive at American Express Company, including her roles as Executive Vice President of Corporate Affairs and Communications and as Senior Vice President and Treasurer, she developed expertise in financial services, consumer business and corporate affairs. As a current or former member of the Boards of Directors of IBM, International Paper, ING, Delta Airlines, and First Data Corporation, including her service on the Compensation and Audit Committees of IBM, the Governance Committee of International Paper, and the Public Policy and Environment Committee of International Paper, she gained extensive experience in corporate governance, consumer business, financial reporting, compensation, and corporate affairs. Her roles as the President of the Doris Duke Foundation, the visiting fellow at the Foundation Center, where she conducted research on the role of American Private Foundations in U.S. foreign policy and in the global system, and senior research scholar at Columbia University School of International and Public Affairs, where she researches and writes about international philanthropy and its role in the global system — as well as her other service in the non-profit sector — have given her extensive insights into corporate affairs matters.


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ELECTION OF DIRECTORS




Name and Age
at Record Date
Position, Principal Occupation, Business Experience and Directorships

Diana L. Taylor
61
Vice Chair
Solera Capital LLC
• Vice Chair, Solera Capital LLC – July 2014 to Present
• Managing Director, Wolfensohn Fund Management, L.P. – 2007 to 2014
• Superintendent of Banks, State of New York – 2003 to 2007
• Deputy Secretary, Governor Pataki, State of New York – 2002 to 2003
• Chief Financial Officer, Long Island Power Authority – 2001 to 2002
• Vice President, KeySpan Energy – 1999 to 2001
• Assistant Secretary, Governor Pataki, State of New York – 1996 to 1999
• Executive Vice President, Muriel Siebert & Company – 1993 to 1994
• President, M.R. Beal & Company – 1988 to 1993 and 1995 to 1996
• Director of Citigroup since 2009
• Director of Citibank, N.A. since 2013
• Other Directorships: Brookfield Asset Management and Sotheby’s
• Previous Directorships within the last five years: Brookfield Office Properties
• Other Activities: Accion (Chair), AMFAR, Columbia Business School (Board of Overseers), Dartmouth College (Trustee), Girls Educational & Mentoring Services (GEMS) (Member), Hudson River Park Trust (Chair), Friends of Hudson River Park, Ideas42, International Women’s Health Coalition, Mailman School of Public Health (Board of Overseers), Mayo Clinic (Member), The After School Corporation (Member), Economic Club of New York, and Council on Foreign Relations (Member)


Skills and Qualifications


Ms. Taylor is an experienced financial services executive and regulator and has been nominated to serve on the Board because of her wide-ranging experience in the areas of Financial Services, Institutional Business, Regulatory Compliance, Risk Management, Corporate Affairs, Compensation, Corporate Governance, Financial Reporting, and Legal Matters. Ms. Taylor has extensive bank regulatory and risk management experience having served as the Superintendent of Banks for the New York State Banking Department. Her financial services and corporate business experience includes in-depth private equity, fund management, and investment banking experience as a Vice Chair at Solera Capital LLC and as a Managing Director of Wolfensohn Fund Management, L.P., a fund manager; Founding Partner and President of M.R. Beal & Company, a full service investment banking firm; and through various executive positions with Donaldson, Lufkin & Jenrette, Lehman Brothers Kuhn Loeb, Inc., and Smith Barney, Harris Upham & Co. Earlier in her career, Ms. Taylor served as Chief Financial Officer of the Long Island Power Authority. In addition, through her work on the Sotheby’s Compensation Committee, the Brookfield Properties Governance Committee, on the Compensation Committee of, and as a member of the Audit Committee of, the Dartmouth Board of Trustees, and as chair of Accion and the Hudson River Park Trust, and former chair of the New York Women’s Foundation, and the YMCA of Greater New York, Ms. Taylor has gained additional experience in corporate affairs, corporate governance, financial reporting, compensation, and legal matters.



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Name and Age
at Record Date
Position, Principal Occupation, Business Experience and Directorships

William S. Thompson, Jr.
70
Former Chief Executive Officer
Pacific Investment Management Company (PIMCO)
• Chief Executive Officer, PIMCO – 1993 to January 2009
• Chairman, Salomon Brothers Asia Ltd. – 1991 to 1993
• Salomon Brothers Inc. – 1975 to 1993
• Director of Citigroup since 2009, Chairman, Personnel and Compensation Committee since 2014
• Other Directorships: None
• Previous Directorships within the last five years: None
• Other Activities: Pacific Life Corporation, Pacific Symphony Orchestra (Life Director), Thompson Foundation for Autism (Chair), Thompson Family Foundation (President), University of Missouri (President’s Financial Advisory Council), and Orange County Community Foundation (Advisory Director)

Skills and Qualifications


Mr. Thompson is an experienced financial services executive and has been nominated to serve on the Board of Directors because of his extensive experience in the areas of Financial Services, Corporate Governance, Financial Reporting, Compensation, Legal Matters, International Business, Institutional and Consumer Business, and Risk Management. As Chief Executive Officer of PIMCO from 1993 to 2009, Chairman of Salomon Brothers Asia Ltd. in Tokyo from 1991 to 1993, and head of Corporate Finance, Western Region and Head of Institutional Sales, Western Region, at Salomon Brothers, Mr. Thompson gained extensive financial services, and institutional, consumer and international business, skills and experience. As a former Chief Executive Officer, and through his service as a member of the Risk Management Committee, Personnel and Compensation Committee with Citi, and previously Lead Director of Pacific Life Corporation, Mr. Thompson developed extensive skills and experience in corporate governance, financial reporting, compensation, and legal matters.



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ELECTION OF DIRECTORS


Name and Age
at Record Date
Position, Principal Occupation, Business Experience and Directorships

James S. Turley
60
Former Chairman and CEO
Ernst & Young
• Chairman and CEO, Ernst & Young – 2001 to June 2013
• Regional Managing Partner, Ernst & Young – 1994 to 2001
• Director of Citigroup since 2013
• Director of Citibank, N.A. since 2013
• Other Directorships: Emerson Electric Co., Intrexon Corporation and Northrop Grumman Corporation
• Previous Directorships within the last five years: None
• Other Activities: Boy Scouts of America (Board Member), Boy Scouts of Greater St. Louis (Board Member), World Scout Foundation (Board Member), Committee for Economic Development (Trustee), Theatre Forward (Chair), and Municipal Theatre Association of St. Louis (Board Member)

Skills and Qualifications

Mr. Turley, the retired Global Chair and CEO of Ernst & Young, brings to Citi his insights and expertise from his exceptional career in the accounting profession, both in the U.S. and internationally, as well as his executive experience from leading a major public accounting firm. Mr. Turley has been nominated to serve on the Board because of his extensive knowledge and expertise in the areas of Financial Reporting, Legal Matters, International Business, Regulatory Compliance, and Risk Management. As Chair of the Audit Committee and a member of the Risk Management Committee, Mr. Turley adds significant value to the Board’s oversight of financial reporting, regulatory matters, compliance, internal audit, legal issues and risk. Having served as Chair and CEO of Ernst & Young, he has developed significant expertise in the areas of compensation, litigation, corporate affairs, and corporate governance. Mr. Turley, the former Chairman of the Board of Catalyst, recognized as a champion of diversity, having received the prestigious Crystal Leadership Award for his support of equal marketplace access for women and the groundbreaking programs he oversaw at Ernst & Young that enable the strategic development of women-owned businesses, provides guidance to Citi on diversity matters as well.

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ELECTION OF DIRECTORS

Name and Age
at Record Date
Position, Principal Occupation, Business Experience and Directorships

Ernesto Zedillo
Ponce de Leon
64
Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University
• Director, Center for the Study of Globalization and Professor in the Field of International Economics and Politics, Yale University – September 2002 to Present
• President of Mexico – 1994 to 2000
• Secretary of Education, Government of Mexico – 1992 to 1993
• Secretary of Economic Programming and the Budget, Government of Mexico – 1988 to 1992
• Undersecretary of the Budget, Government of Mexico – 1987 to 1988
• Banco de Mexico – Economist, Deputy Manager of Economic Research, Director General of FICORCA, Deputy Director – 1978 to 1987
• Director of Citigroup since 2010
• Other Directorships: Alcoa Inc., Procter & Gamble Company, and Grupo Prisa
• Previous Directorships within the last five years: None
• Other Activities: BP (Member of International Advisory Board), Credit Suisse Research Institute (Advisor), The Group of Thirty (Member), Inter-American Dialogue (Co-Chair of Board), and Natural Resource Governance Institute (Chair of the Board), and Presidential Counselor of Laureate International Universities


Skills and Qualifications


Mr. Zedillo Ponce de Leon is the former President of Mexico, a seasoned economist and academic. He has been nominated to serve on the Board because of his extensive experience in the areas of International Business and Economics, Financial Services, Regulatory Compliance, Corporate Affairs, Financial Reporting, Risk Management, and Corporate Governance. Through his extensive governmental experience, including his service from 1978 to 1987 at the Central Bank of Mexico, as Undersecretary of Budget for the Mexican government from 1987 to 1988, as Secretary of Economic Programming and the Budget from 1988 to 1992, and as President of Mexico from 1994 to 2000, as well as his academic experience, including his roles as the Director of the Center for the Study of Globalization at Yale and as Professor of International Economics and Politics and Professor of International and Area Studies at Yale, he has had extensive experience in the areas of international business, financial services, regulatory compliance, and risk management. His service as Chair of the Global Development Network, as Chair of the High Level Commission on Modernization of World Bank Group Governance, on the Group of Thirty, and on the International Advisory Boards of BP and the Coca-Cola Company, has given him extensive international business, financial services, and corporate affairs experience. As a member of the Board of Alcoa Inc., he serves on the Audit Committee and Public Issues Committee, and at Procter & Gamble Company, he is a member of the Governance and Public Responsibility Committee, and a member of the Innovation and Technology Committee, Grupo Prisa of Spain and as a past Director of the Union Pacific Corporation, where he served on the Audit and Finance Committees, and as a Director of EDS, where he served on the Governance Committee, Mr. Zedillo Ponce de Leon has gained experience in financial reporting, risk management, corporate governance, and corporate affairs.




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ELECTION OF DIRECTORS



DIRECTORS’ COMPENSATION


Directors’ compensation is determined by the Board. Since its initial public offering in 1986, Citi has paid outside Directors all or a portion of their compensation in common stock to ensure that the Directors have an ownership interest in common with other stockholders. The Nomination, Governance and Public Affairs Committee makes recommendations to the Board with respect to compensation of Directors. The Committee periodically reviews benchmarking assessments in order to determine the level of compensation to attract qualified candidates for Board service and to reinforce our practice of encouraging stock ownership by our Directors. In 2015, the Committee received benchmarking assessments of peer company director compensation from outside expert advisors. After reviewing the current compensation program against the assessment and taking account of such factors as it considered relevant, the Committee determined that no changes were appropriate.


Key features of our non-employee Director Compensation Program:

• Non-employee Directors receive an annual cash retainer of $75,000 and a deferred stock award valued at $150,000. The deferred stock award is generally granted on the same date that annual incentives are granted to the senior executives. The deferred stock award generally becomes distributable on the second anniversary of the date of the grant, and Directors may elect to defer receipt of the award beyond that date. Starting with the 2011 deferred stock award grant, in the event a Director leaves the Board for personal reasons prior to the conclusion of the deferral period and before age 72, the Director will not forfeit the deferred stock and the prorated award will be distributed as scheduled. Directors may elect to receive all or a portion of their cash retainer in the form of common stock, and Directors may elect to defer receipt of this common stock.

• Directors who are employees of Citi or its subsidiaries do not receive any compensation for their services as Directors.

• Citi’s Chairman receives annual compensation in the form of a $500,000 Chairman’s Fee, payable 75% in deferred shares of Citi common stock and 25% in cash or deferred shares of Citi common stock.

• The Chairs of the Audit Committee and the Risk Management Committee receive additional compensation of $50,000 per year. The Chairs of the Ethics and Culture Committee; the Nomination, Governance, and Public Affairs Committee; the Operations and Technology Committee; and the Personnel and Compensation Committee receive additional compensation of $35,000. In addition, Chairs of the Ad Hoc Committees also receive additional compensation of $35,000.

• If a director serves on more than two Committees of the Citigroup Board, or on the Citibank Board and more than one Committee of the Citigroup Board, the director will receive a $25,000 Incremental Fee for each additional Committee of the Citigroup Board on which the director serves. Additional compensation for special assignments may be determined on a case-by-case basis.

• Mses. Costello, Spero, and Taylor and Messrs. Hennes, Henry, McQuade, Reiner, Santomero, and Turley serve on Citibank’s Board of Directors. Each non-employee Director of Citibank is entitled to receive $25,000 as an annual cash retainer.

• All annual retainers and chair fees are paid in cash or stock in four equal quarterly installments per annum. These fees are reported in the Non-Employee Director Compensation Table below.

• Citi reimburses its Board members for expenses incurred in attending Board and committee meetings or performing other services for Citi in their capacities as Directors. Such expenses include food, lodging and transportation.

• Mses. Costello, James, Spero, and Taylor and Messrs. Hennes, Henry, McQuade, Santomero, Thompson, and Zedillo have served on and/or chaired a number of ad hoc committees covering such topics as compliance matters and international subsidiary governance.


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The following table provides information on 2015 compensation for non-employee Directors.


2015 Director Compensation


Name

Fees
Earned
or Paid
in Cash
($)(1)

Stock
Awards
($)(1)(2)(3)(7)


All Other
Compensation
($)


Total
($)



Duncan P. Hennes
$ 232,500
$ 150,000

$382,500

Peter B. Henry
$ 62,500
$ 75,000

$ 137,500

Franz B. Humer
$110,000
$ 150,000

$ 260,000



Eugene M. McQuade(4)
$ 80,000
$ 75,000

$ 155,000

Michael E. O’Neill(5)
$ 500,000


$ 500,000

Gary M. Reiner
$ 135,000
$ 150,000

$ 285,000

Judith Rodin
$ 100,000
$ 150,000

$ 250,000

Robert L. Ryan(6)
$ 65,000
$ 37,500

$ 102,500


Anthony M. Santomero
$ 240,000
$ 150,000

$ 390,000

Joan E. Spero
$ 155,000
$ 150,000


$ 305,000

Diana L. Taylor
$ 210,000
$ 150,000

$ 360,000

William S. Thompson
$ 135,000
$ 150,000

$ 285,000

James S. Turley
$ 205,000
$ 150,000

$ 355,000

Ernesto Zedillo Ponce de Leon
$ 100,000
$ 150,000

$ 250,000



(1) Directors may elect to receive all or a portion of the cash retainer in the form of Citi common stock and may elect to defer receipt of Citi common stock. Certain directors elected to defer receipt of the shares. Ms. Spero and Dr. Rodin elected to receive all or a portion of their Citigroup 2015 cash retainer and/or Chair fee in deferred stock as represented in the below chart. Mr. O’Neill elected to receive his Chair Fee in deferred stock as represented in the below chart. Messrs. Henry, Reiner and Thompson elected to receive their cash retainers in stock (100%). Messrs. Henry, Reiner, and Thompson did not elect to defer their retainers; therefore, their 955, 2,059 and 2,528 shares, respectively, were distributed to them quarterly on January 1, April 1, July 1, and October 1. The share price used for the deferred stock was the average consolidated NYSE closing price of Citigroup common stock for the first ten days of the last month of the quarter.

Deferred Fees
To Be Paid in Stock



Name

Fees Paid
Currently in Cash


Number of
Units


Value of
Units



Duncan P. Hennes
$ 232,500


Peter B. Henry
$ 12,500



Franz B. Humer
$ 110,000



Eugene M. McQuade
$ 80,000



Michael E. O’Neill

9,368
$ 500,000

Gary M. Reiner
$ 25,000



Judith Rodin

1,873
$ 100,000

Robert L. Ryan
$ 65,000









Anthony M. Santomero


$


240,000









Joan E. Spero


$


25,000


2,447


$


130,000



Diana L. Taylor


$


210,000









William S. Thompson












James S. Turley


$


205,000









Ernesto Zedillo Ponce de Leon


$


100,000













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(2)


The values in this column represent the aggregate grant date fair values of the 2015 deferred stock awards. The grant date fair value is based on a grant date of February 18, 2015 and a grant price determined by the average NYSE closing prices of Citi’s common stock on the immediately preceding five trading days. Mr. Henry, for whom the grant date was July 1, 2015 and Mr. McQuade, for whom the grant date was October 1, 2015 at a grant price determined by the average NYSE closing prices of Citi’s common stock on the immediately preceding five trading days, immediately preceding the dates of their service as Board members. Mses. Costello and James did not receive grants of deferred shares in 2015 because their Board service did not commence until January 15, 2016. The amounts in the below chart represent deferred stock awards only and not shares awarded in lieu of the cash retainer and/or Chair or Committee Chair fees. The grant date fair value of the deferred stock awards are set forth below:








Director


Deferred Stock
Granted in 2015
(#)


Grant Date
Fair Value
($)



Duncan P. Hennes


2,966


$


150,000



Peter B. Henry*


1,342


$


75,000



Franz B. Humer


2,966


$


150,000



Eugene M. McQuade*


1,516


$


75,000



Michael E. O'Neill









Gary M. Reiner


2,966


$


150,000



Judith Rodin


2,966


$


150,000



Robert L. Ryan**


741


$


37,500



Anthony M. Santomero


2,966


$


150,000



Joan E. Spero


2,966


$


150,000



Diana L. Taylor


2,966


$


150,000



William S. Thompson


2,966


$


150,000



James S. Turley


2,966


$


150,000



Ernesto Zedillo Ponce de Leon


2,966


$


150,000








*


The Deferred Stock Awards granted to Messrs. Henry, and McQuade were prorated based on the dates they commenced service on Citi’s Board.



**


Mr. Ryan’s Deferred Stock Award was prorated because his service on the Board terminated on April 28, 2015.


The aggregate number of shares of deferred stock outstanding at the end of 2015 was:

Name    Number of  Shares

Duncan P. Hennes
6,418

Peter B. Henry
1,342

Franz B. Humer
13,643

Eugene M. McQuade
1,516

Michael E. O'Neill
60,888

Gary M. Reiner
5,986

Judith Rodin
34,456

Anthony M. Santomero
29,546

Joan E. Spero
21,265

Diana L. Taylor
21,680

William S. Thompson
6,006

James S. Turley
6,006

Ernesto Zedillo Ponce de Leon
20,333



(3) Beginning in 2009, Directors were no longer able to elect to receive any of their compensation in the form of options to purchase shares of common stock.

(4) Mr. McQuade served as Vice Chairman of Citigroup from January 1, 2015 to May 1, 2015. His compensation for services as an employee of the Company and his fiscal year-end holdings of outstanding Performance Share Units, Capital Accumulation Program Awards, and Stock Options are reported under the Certain Transactions and Relationships section of this Proxy Statement on page 22.

(5) Mr. O’Neill receives a Chairman’s Fee of $500,000 annually for his service as Citi’s Chairman.

(6)  Mr. Ryan retired from the Board on April 28, 2015.


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(7) The following chart shows the amount of dividend equivalents and interest paid to the non-employee Directors in 2015 with respect to shares of Citi common stock held in their deferred stock accounts.

Director

Dividend Equivalents and
Interest Paid on Deferred
Stock Account*

Duncan P. Hennes
$995

Peter B. Henry
$134

Franz B. Humer
$2,149

Eugene M. McQuade
$76

Michael E. O’Neill
$ 8,923

Gary M. Reiner
$1,097

Judith Rodin
$5,313

Robert L. Ryan
$1,380

Anthony M. Santomero
$4,698

Joan E. Spero
$3,129

Diana L. Taylor
$ 3,432

William S. Thompson
$ 929

James S. Turley
$ 1,098

Ernesto Zedillo Ponce de Leon
$ 3,217

*Dividend equivalents are paid quarterly, in the same amount per share and at the same time as dividends are paid to stockholders. Interest accrues on the amount of the dividend equivalent from the payment