Citigroup Inc.’s failure to pay 24,000 people owed money as part of a settlement with the government over foreclosure abuses has prompted a U.S. lawmaker to call for an investigation into whether banks missed other borrowers.
Maxine Waters, the senior Democrat on the House Financial Services Committee, sent a letter Friday to the inspectors general of the Federal Reserve and the Treasury Department seeking an examination. Her request pertains to a 2013 accord in which lenders agreed to pay $10 billion to resolve allegations that they improperly initiated hundreds of thousands of foreclosures following the housing bust.
Waters is seeking a probe after Bloomberg News reported earlier this month that thousands of borrowers who were entitled to compensation from Citigroup never got checks. The bank took action after one borrower’s complaint caused regulators to reexamine the settlement.
“Thankfully, this error was discovered,” Waters of California wrote in the letter to Mark Bialek at the Fed and Eric M. Thorson at Treasury. The situation “has raised questions as to whether there are other borrowers who have not been properly compensated by other servicers,” she added.