Earlier this month, however, the Consumer Financial Protection Bureau found that Citibank had been discriminating against Armenian American credit card applicants and targeting customers with last names that ended in “ian” and “yan.” Arminak called Smbatian back.
“You were right,” Arminak recalled saying.
They began working on a class-action lawsuit.
Smbatian and her husband, Karl Asatryan, allege in the recently filed lawsuit that Citibank and its parent company, Citigroup, caused them financial troubles by damaging their credit and forcing them to open new bank, credit card and business accounts, as first reported by the Los Angeles Times. The lawsuit, filed Nov. 17 in the U.S. District Court for the Central District of California, says the plaintiffs felt mortified after “being treated like criminals” because of their “ethnicity and ancestry.”
“I had so much trust in Citibank,” Smbatian, 42, told The Washington Post. “And then one day, just like, out of the blue, they just basically [upended] my life completely.”
A Citi spokesperson declined to comment on the lawsuit but said in a statement to The Post that the company has added protocols to prevent “any recurrence of such conduct.”
“Regrettably, in trying to thwart a well-documented Armenian fraud ring operating in certain parts of California, a few employees took impermissible actions,” the statement said. “While we prioritize protecting our bank and our customers from fraud, it is unacceptable to base credit decisions on national origin. We sincerely apologize to any applicant who was evaluated unfairly by the small number of employees who circumvented our fraud detection protocols.”
Smbatian and Asatryan, 45, both immigrated from Yerevan, Armenia, as teenagers in the late 1990s in hopes of building careers and families in the United States. They met in California in 2001 and started a real estate agency based in the Sherman Oaks area in Los Angeles the next year.
After Smbatian and Asatryan got married in 2003, they found a Citibank branch within a mile of their home in the Van Nuys neighborhood in Los Angeles. They opened credit card and banking accounts, as well as a business account to process checks from customers and landlords.
They had not encountered banking problems until they heard rumors in late 2021 that Citibank was closing Armenian Americans’ accounts. Smbatian said she figured the account holders had made mistakes and that she wouldn’t be impacted.
But Smbatian received her own letter from Citibank in February 2022, according to the lawsuit, and Asatryan got a similar letter a few months later. Despite repeated calls and emails to the bank, Smbatian and Asatryan said they never received an explanation about their account closures and instead blamed each other for possibly making a mistake.
Recently, however, a government agency found the bank was at fault. Between 2015 and 2021, Citi targeted Armenian Americans applying for Citibank-affiliated credit cards for retailers including Macy’s, Bloomingdale’s and Costco, according to a consent order the CFPB filed against Citibank on Nov. 8. Citibank singled out applicants living in or near Glendale, Calif., one of the country’s largest Armenian communities, the order said.
Citibank scrutinized many Armenian Americans’ credit card applications, requiring additional information, blocking their accounts or simply denying them, according to the CFPB’s order. The order added that Citibank employees called the applicants “Armenian bad guys” and the “Southern California Armenian Mafia,” believing they might commit fraud or fail to pay charges.
Citibank managers instructed employees to not discuss why Armenian Americans’ applications were denied, according to the order. Employees instead made up reasons for denying credit card applications, such as suspected credit abuse, the order said.
Existing account holders were also affected. Smbatian and Asatryan said they were locked out of their accounts 30 days after receiving notice, and they forfeited their spending points and rewards. Checks submitted to their business account were soon denied, they said.
“For a moment, I was losing my mind,” Smbatian said, “because I didn’t know how we were going to handle everything.”
Smbatian and Asatryan, who have five children, withdrew hundreds of thousands of dollars from Citibank. In fear the same thing could happen again, the couple opened accounts at four different banks and rebuilt their credit. Asatryan said he barely slept for about three months, in fear that his credit would never recover.
The CFPB said in a statement that Citi must pay $1.4 million to affected bank customers and a $24.5 million fine. But Arminak said $1.4 million isn’t enough to compensate for the stress and embarrassment her clients have endured. Since filing the lawsuit, Arminak said that more than 100 people have contacted her to share experiences similar to what Smbatian and Asatryan encountered.
Theirs is not the first class-action lawsuit accusing Citibank of discrimination against Armenians. Lead plaintiff Marine Grigorian, an Armenian woman from Granada Hills, Calif., alleged in a lawsuit filed Nov. 10 that she was denied a credit line increase earlier this year.
Smbatian and Asatryan’s lawsuit is requesting damages and attorney fees.
The couple also hope to prevent banks from again targeting customers based on ethnicity, race or religion.
“That’s what I want the most out of this,” Smbatian said. “That’s when I’m going to be like, ‘Okay, justice is served.’”
