News Release

New Jersey Department of
Banking and Insurance

Commissioner Tom Considine

For Immediate Release:
March 25, 2010

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

TRENTON – Department of Banking and Insurance Commissioner Tom Considine announced today that the state has joined a 35-state, $1.25-million settlement with CitiFinancial, a Baltimore-based mortgage company which failed to report more than 91,000 residential mortgage loans to the Federal Reserve System, as required by the federal Home Mortgage Disclosure Act (HMDA). The loans omitted from CitiFinancial’s HMDA Loan Application Register (LAR) were originated between 2004 through 2007.

“This is a good example of state regulators working together on a multistate issue to protect consumers,” Considine said. “Today’s voluntary agreement will ensure that CitiFinancial puts in place the systems, training, oversight, and controls necessary to avoid a similar occurrence in the future.”

The agreement between CitiFinancial and state mortgage regulators was executed after an examination conducted originally by the Massachusetts Division of Banks to determine compliance with state and federal laws found that CitiFinancial had failed to report the mortgage loans. The New Jersey Department of Banking and Insurance participated in the ensuing multistate approach to these compliance issues. 

Congress enacted HMDA in 1975 to ensure that mortgage lenders report key data regarding mortgage loan transactions to the Federal Reserve System. The public data is principally used by regulators to measure how lenders are meeting the credit needs of the communities in which they do business and to determine whether patterns of potentially discriminatory lending practices are present. Each lender must submit data for each mortgage loan application it receives, including: the loan amount; the location of the property; the race, ethnicity, and gender of the borrower(s); and whether the loan application was approved or denied.

Major terms of the agreement include:

• CitiFinancial will ensure that all corrected and complete HMDA reports are resubmitted to the Federal Reserve System for the years 2004 through 2007;
  
  
• CitiFinancial will engage an independent consultant to conduct a thorough fair lending review to determine whether the data from the previously unreported 91,127 mortgage transactions, which include more than 2,700 in New Jersey, demonstrate discriminatory lending;
  
  
• CitiFinancial will remit $1.25 million in settlement proceeds including New Jersey’s share of more than $45,000.