PRESS RELEASE FROM RESPONSIBLE WEALTH
For Immediate Release – April 9, 2002
Contact: Betsy Leondar-Wright, (617) 423-2148 x13

SHAREHOLDERS CHALLENGE CITIGROUP ON PREDATORY LENDING

At Citigroup’s annual meeting on Tuesday, April 15, at Carnegie Hall in New York City, Responsible Wealth member Liz Letzler will present a shareholder resolution linking CEO pay to improving the company’s record on predatory lending practices.

Last year, while Citigroup’s Sandy Weill received $13 million in total compensation, his company’s consumer lending unit was paying $215 million to settle Federal Trade Commission complaints for routinely deceiving and lying to low-income borrowers and tricking them into costly loan refinancings.

“We believe it is time for Citigroup to guarantee that all customers receive loans on terms that fairly reflect their credit histories, regardless of which Citigroup office the customer happens to walk into,” said Scott Klinger, co-director of Responsible Wealth. The proposed resolution calls for a mechanism to evaluate the company’s officers on their public commitments to put an end to predatory lending practices.

Citigroup is encouraging shareholders to vote against the resolution, citing improvements in reducing controversial lending practices. While the company has taken some steps to eliminate predatory practices, such as the sale of single premium credit insurance, other practices continue unresolved, for example, frequently charging CitiFinancial customers higher interest rates than they deserve based on their credit ratings; and charging subprime borrowers higher interest rates for mortgages free of prepayment penalties, even though such penalties have been virtually eliminated for prime mortgages.

Outside the meeting, Responsible Wealth members will hand out fortune cookies with special “fortunes” related to the Citigroup resolution. Two examples are “Fannie Mae found 30% of high-rate loans go to borrowers with good credit” and “Predatory lending abuse cost Citigroup $215 million in legal claims last year,” followed by “Vote Yes on Question 4.”

Responsible Wealth has filed shareholder resolutions related to executive compensation at seven companies: Disney, Household International, Coca-Cola, EMC Corporation, General Electric, Bristol Myers Squibb as well as Citigroup. The resolutions can be seen on http://www.responsiblewealth.org. Responsible Wealth, affiliated with United for a Fair Economy, is a growing network of over 800 business people, investors and affluent Americans in the top 5 percent of income and wealth who work to promote widely shared prosperity.

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