Citigroup hit with $28.8m fine after mortgage units malpractice

The US Consumer Financial Protection Bureau has fined Citigroup $28.8m after it found that the banking group kept customers in the dark about mortgage options.

Subsidiaries of Citi will pay $21.4m to affected customers, while also coughing up $7.4m in civil penalties. CitiMortgage and CitiFinancial Services are the subsidiaries which the regulatory body is targeting, and neither have admitted or denied the allegations.

The accusations surround the supposed failure of Citi to inform their mortgage holders adequately about their options for avoiding foreclosure, and making it difficult to apply for relief.

"Citi's subsidiaries gave the runaround to borrowers who were already struggling with their mortgage payments and trying to save their homes," said the CFPB's Richard Cordray in a statement.

"Consumers were kept in the dark about their options or burdened with excessive paperwork."

Last week the consumer watchdog brought a lawsuit against the largest student loan lender in the US, Navient, over a similar avoidance of keeping its customers informed.

Citi's director of public affairs Mark Rodgers said that the company was "pleased to have resolved these matters".

Citigroup's share price was trading 0.8% lower during after hours trading following the news.