Citigroup has agreed to pay up to US$20 million to North Carolina customers of the Associates First Capital Corp to settle allegations that Associates illegally tricked them into buying expensive and unneeded credit insurance as part of their mortgage loans, a practice at the center of a Federal Trade Commission lawsuit against Associates.
Associates, one of the nation's largest consumer lenders, has long been a target of consumer advocates who describe the company as the worst "predatory lender" in the nation.
Predatory lending refers to the practice of deceptively packing high fees, credit insurance and other charges into home loans to unsophisticated borrowers while inducing them to repeatedly "flip" their loans through refinancings that only serve to generate big fees for lenders.
Citigroup acquired Associates last year and has been trying to settle regulatory investigations and hundreds of private lawsuits. The agreement Thursday ends the North Carolina attorney general's investigation of Associates, which was initiated in 1999, the same year the state became the first to pass anti-predatory lending laws. Citigroup also agreed to pay US$300,000 to the state.
In a statement Thursday, the attorney general, Roy Cooper, said: "The investigation revealed that the Associates pressured its employees to sell credit insurance on all mortgage loans. It used deceptive tactics to add expensive prepaid credit insurance premiums to the loans, and then finance those premiums at high interest rates over the life of the loan."
Citigroup, in the settlement, denied allegations of wrongdoing, but in the past company officials have said they are working to improve lending practices at former Associates' branches. Last month, Citigroup also said it had suspended more than 1,200 pending foreclosures involving Associates customers after an internal review found "serious enough problem in the way the loan was originated."
Under pressure from consumer activists and some lawmakers and regulators, Citigroup also recently said it would stop selling single-premium credit insurance. The insurance, which is generally intended to pay off the loan should the borrower become disabled or dies, is paid in one lump sum and is typically rolled into the loan balance.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source