Consumer complaint received 2024-11-08 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Getting a credit card — Application denied
Company: CITIBANK, N.A.
State: MI

Complaint narrative:
Subject : Unjust Loan Denial, Potential Collateral Misrepresentation, and Unwarranted Credit Inquiry by Citibank Complaint Details : 1. Creation of Loan Value from Application and Denial Despite Collateral Potential : I applied for a loan through Citibank on XX/XX/year> and XX/XX/year> fully meeting the application requirements and providing all necessary personal and financial information, including my Social Security number. I believe that Citibank either : Created Loan Funds from My Application : In certain cases, loan applications are processed in such a way that banks create funds by balancing their internal ledgers against the application. Essentially, the application itself becomes an asset with intrinsic value, allowing the bank to balance its books. This would indicate that the application alone could serve as sufficient collateral to secure the loan. 
Utilized My Application as Collateral with the Federal Reserve : If Citibank went to the Federal Reserve to source funds for my loan, the application would act as a form of promissory note, which should hold value equivalent to the loan amount for the purposes of collateral. The Federal Reserve requires that applications used as collateral meet certain criteria, affirming that my signed application has intrinsic financial value. This should negate any reason for a loan denial based on traditional credit criteria, as the application itself provides the required collateral. 
XXXX. Securitization Practices and Secondary Market Value of Loan Applications : I understand that it is common practice for banks to securitize loans and sell them on the secondary market. For a loan to be securitized and sold, the underlying promissory note or application must hold recognized value. Once signed, the application transforms into a binding promise to pay, which gives it the necessary legal and financial value to be transferred or sold. This supports my belief that my application itself had value and could have served as collateral or an asset for securitization. This fact should have precluded Citibank from denying my loan solely based on credit factors, as the application already met the banks internal funding needs or asset requirements. 
XXXX. Hard Credit Inquiry with No Opt-Out Option and Potential FCRA Violation : During my loan application process, Citibank conducted a hard inquiry on my credit report, which impacted my credit score and limited future financial opportunities. Despite the possibility that my application was sufficient for funding without additional collateral, Citibank did not offer me an opt-out option for the credit inquiry. I believe this may be a violation of the Fair Credit Reporting Act ( FCRA ), as the inquiry damaged my creditworthiness without my consent. If Citibanks internal processes would have allowed for loan approval by leveraging my application as collateral, then the hard inquiry was both unnecessary and detrimental. 
XXXX. Financial Damages Due to Denial and Credit Impact : The unjust denial of my loan application and the hard credit inquiry have led to measurable financial damages. Specifically, I missed a critical investment opportunity that required immediate funding. The loan denial prevented me from securing funds for a Special Purpose Vehicle ( SPV ) that would have facilitated investment opportunities valued at over {$8.00} XXXX, leading to substantial economic harm.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation