IS CITI BLEEDING ITS WEAKEST BORROWERS?

摘要

With its $30 billion purchase of Associates First Capital Corp. last year, Citigroup cemented its position as the country's largest subprime lender—catering to those who don't qualify for normal bank loans. But in a suit filed in Atlanta Federal Court on Mar. 6, the Federal Trade Commission charges Associates—and its owner, Citigroup, which merged it into its CitiFinancial unit—rnwith deceptive lending practices (table). The suit, which seeks refunds for Associates customers who were allegedly misled, could cost Citigroup hundreds of millions if they were to settle. And that suit may not be the last problem Citi faces: The Justice Dept. is reviewing the way Associates paid its loan brokers.