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And the dominoes begin to topple.... Pressure from National People's Action (NPA) has forced Citigroup to discontinue one of its most profitable and abusive lending practices-the sale of single-premium credit insurance. But while celebrating the conglomerate's decision, NPA demanded that Citigroup take additional steps toward predatory lending reform.

"Citigroup made its first right move since buying The Associates. Now it's time to really show they are committed to cleaning up their loans by stopping the other predatory practices that cause thousands of people to lose their homes," said Gale Cincotta, NPA chairperson. Single-premium credit insurance is designed to cover a homeowner's mortgage payments in the event of a job loss or serious injury and pays off the morgtage if the policyholder dies.

The problem is that homeowners pay for the single-premium credit insurance throughout the life of the mortage, but often the coverage lasts for only five years, often causing monthly payments to be driven up as if there's a15 percent to 20 percent interest rate on the loan. In September, Citigroup became the world's largest predatory lender when the company purchased The Associates. NPA presented Citigroup with three lending reforms and a demand to meet with Citigroup's Chairman of the Executive Committee, Robert Rubin, in a meeting with Citigroup officials last October.

Citigroup broke off negotiations once it received regulatory approval to acquire The Associates. Since then, NPA has demonstrated against the company in three national "hits" on the homes and offices of key Citigroup officials as well as seven local actions on Citibank and CitiFinancial branches. NPA continues to demand a meeting with Rubin, former US Secretary of the Treasury and self-proclaimed "friend of neighborhoods." So far, Rubin has ignored NPA's calls to reform Citigroup across the board to turn back into a responsible lending institution.

NPA leaders contend that to clean up its predatory practices Citigroup must cap fees at 3 percent, eliminate terms that lock borrowers into predatory loans, and allow borrowers their American right to sue predatory lenders in court. Furthermore, NPA contends, Citigroup must review and restructure the predatory loans made by The Associates and CitiFinancial which tens of thousands of homeowners are currently struggling to repay. Many of these homeowners will ultimately end up in bankruptcy and foreclosure unless Citigroup repairs the loans so that borrowers are able to repay their loans and remain in their homes.

Finally, NPA calls on Citigroup to offer affordable, prime-rate loans throughout the 48 states where they operate. Currently, most borrowers can only get high-interest loans through CitiFinancial branches, even if they have good credit and qualify for a prime-rate loan. This Citigroup policy creates a discriminatory loan system where most borrowers pay too much for mortgage credit, NPA charges.

At the NPA Conference in Washington DC this spring, NPA secured a commitment from the Federal Trade Commission to attend seven hearings on predatory lending practices to be hosted by local organizations across the country. The FTC recently filed a $500 million federal lawsuit against the Associates First Capital for engaging in predatory lending practices by misleading consumers into paying high interest rates and fees. FTC officials attended the first public hearing July 14 in Springfield, IL. (See page 2) The hearing continued to focus on Citigroup as the largest predatory lender in the country.