Citibank (NYSE: C) to Pay $1.25 Million Fine for Violation Fair Lending Laws

Citibank (NYSE: C) has agreed to pay a $1.25 million fine to settle allegations from 35 state governments that CitiFinancial failed to report 91,127 residential mortgage loans to the U.S. government as required by law.

The Conference of State Bank Supervisors stated on Wednesday that the error was likely caused an error in Citi’s internal systems and went undetected until Massachusetts banking regulators examined the situation.

According to the regulator group, Citigroup made loans between 2004 and 2007 which were not reported to the government in violation of the Federal Home Mortgage Disclosure Act.

“HMDA remains the primary tool we use to ensure compliance with fair lending laws and regulations,” said Steven Antonakes, Massachusetts’ commissioner of banks. “By failing to accurately report all required transactions, CitiFinancial hampered our ability to complete that assessment.”

Citibank spokeswoman Molly Meiners told the press that the error was accidental and that the company has filed corrected reports with the Federal Reserve and has since fixed the issues related to Citi’s software systems. Meiners said that no customers were harmed by the failure to report.

The Federal Home Mortgage Disclosure Act requires that the lender must report the loan amount, property location, whether or not the loan was approved and the borrower’s gender, race and ethnicity for each mortgage loan application received.