|CitiGroup Inc. has suspended business with more than 3,600 subprime mortgage brokers -- far more than previously announced -- as part of continuing internal reforms prompted by last year's acquisition of Associates First Capital Corp., according to a story yesterday in the interactive edition of the Wall Street Journal (WSJ.com). The story cited an internal memorandum sent by Robert Willumstad, chief executive of CitiGroup's consumer division.
WSJ.com said that CitiGroup has now severed ties with 64% of the brokers who used to do business with Associates, which has been merged with CitiGroup's own subprime lending unit, CitiFinancial. While CitiGroup announced in April that it had suspended operations with 1,100 brokers, another 2,500 have been suspended since then. The memo reportedly said that brokers were suspended for one or more of the following reasons:
- inadequate or suspended state licenses
- failure to bring in regular, quality business
- integrity concerns
- failing to acknowledge the code of conduct