[JURIST] US regulators on Tuesday ordered [text, PDF] Citigroup [corporate website] to refund $700 million to nine million credit card customers, along with a $70 million fine for illegal and deceptive practices.The Consumer Financial Protection Bureau (CFPB) [agency website] ordered the bank and its subsidiaries to refund its customers [CFPB press release] after finding that Citi marketed or offered credit card add-on products such as 30-day free-trials when no such trials existed, or signed customers up for an add-on product whether or not the consumer actually wanted the product. Citi also allegedly misrepresented its customers by charging a $14.95 “expedited” payment fee for customers who made payments over the phone without notifying them of non-fee options. A spokeswoman for Citi said [AP report] the financial group has already set aside money for the settlement and fines. Citi claims it has stopped using add-on practices and has been issuing refunds to customers since 2013.

The CFPB was established under the Dodd-Frank Act, which was signed into law [JURIST report] by President Barack Obama in July 2010 in response to the 2008 financial collapse and created new regulations designed to strengthen oversight of the financial industry and protect consumers. The Act also established the Financial Stability Oversight Council [official website] (FSOC) to identify and monitor banks that may become ‘too big to fail.” Additionally, the Act gives the Commodities Futures Trading Commission (CFTC) [official website] the ability to regulate the derivatives market, and the Federal Reserve new oversight over the largest financial institutions. JURIST guest columnist Louise Bennetts [official profile] of the Cato Institute argues [JURIST op-ed] that Dodd-Frank is a poorly drafted statute with unclear principles that gives regulators too much discretion to promulgate rules. Bank of America was fined $727 million [JURIST report] for its illegal credit card practices in 2014.