Current:Home > Invest'People of the wrong race': Citi hit with racial discrimination lawsuit over ATM fees -AssetVision
'People of the wrong race': Citi hit with racial discrimination lawsuit over ATM fees
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Date:2025-04-24 23:03:28
Is Citigroup discriminating against white people?
That’s the question at the heart of a racial discrimination lawsuit filed in federal court against the megabank by Florida customers who say they were charged out-of-network fees for transactions at Citi ATMs while customers of minority-owned banks were not. The plaintiffs are seeking class-action status.
Citi has "an express policy of charging customers different ATM fees based on race, the two plaintiffs allege in the lawsuit. "Like most banks, Citi charges customers an out-of-network fee when they use Citi’sATMs to withdraw cash from a financial institution outside of Citi’s ATM network. But unlike otherbanks, Citi imposes this fee only when a customer withdraws money from a financial institution ownedby people of the wrong race."
Citigroup said in an emailed statement that it is reviewing the complaint.
“Citi has no tolerance for discrimination in any form, and we take allegations to the contrary very seriously,” the company told USA TODAY.
Citibank ATMs typically charge withdrawal fees by out-of-network customers but to “alleviate one of the biggest barriers to banking,” it waives those fees for customers of participating minority-owned banks, according to Citigroup.
Customers of 52 financial institutions – minority owned banks, community development credit unions and community banks, many of which are institutions in low- to moderate-income communities and communities of color – can make cash withdrawals without a surcharge fee at more than 2,300 ATMs across the country, including in New York, Miami, Washington, D.C., Chicago, San Francisco and Los Angeles, Citigroup says.
Each participating institution also waives out-of-network fees they may charge customers for using Citibank ATMs.
The participating institutions collectively serve 1 million customers, Citigroup said.
Research shows that the average combined cost of an out-of-network ATM transaction is $4.66.
Programs like Citigroup’s are intended to combat racial inequality and expand access to underserved low-income Black and Hispanic communities historically susceptible to redlining – the discriminatory practice of excluding poorer minority areas from financial services.
The lawsuit is part of broader legal skirmish over diversity, equity and inclusion – or DEI – that has gained momentum since last summer’s Supreme Court ruling abolishing affirmative action in college admissions.
Conservative activists have peppered organizations with lawsuits, taking aim at programs – both government and private – that help Black Americans and other marginalized groups, claiming they discriminate against white people.
The Citigroup lawsuit was filed by an influential conservative law firm that represented Students for Fair Admissions founded by anti-affirmative action activist Edward Blum in his successful challenge of affirmative action in higher education. Consovoy McCarthy has also represented the Republican National Committee and former President Donald Trump.
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