Citibank 2010 Annual Report Download - page 109

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North America Cards
North America cards consists of Citi’s branded and retail partner cards.
Paydown. The Paydown program is designed to liquidate a customer’s
balance within 60 months. It is available to customers who indicate a long-
term hardship (e.g., long-term disability, medical issues or a non-temporary
income reduction, such as an occupation change). Payment requirements
are decreased by reducing interest rates charged to either 9.9% or 0%,
depending upon the customer situation, and designed to amortize at least
1.67% of the balance each month. Under this program, fees are discontinued
and charging privileges are permanently rescinded.
CCG. The Credit Counseling Group (CCG) program handles proposals
received via external consumer credit counselors on the customer’s behalf. In
order to qualify, customers work with a credit counseling agency to develop
a plan to handle their overall budget, including money owed to Citi. A copy
of the counseling agency’s proposal letter is required. The annual percentage
rate (APR) is reduced to 9.9% and the account fully amortizes in 60 months.
Under this program, fees are discontinued and charging privileges are
permanently rescinded.
Interest Reversal Paydown. The Interest Reversal Paydown
program is also designed to liquidate a customer’s balance within 60 months.
It is available to customers who indicate a long-term hardship. Accumulated
interest and fees owed to Citi are reversed upon enrollment, and future
interest and fees are discontinued. Payment requirements are reduced and
are designed to amortize at least 1.67% of the balance each month. Under
this program, like the programs discussed above, fees are discontinued, and
charging privileges are permanently rescinded.
U.S. Installment Loans
CFNA AOT. This program is targeted to Citi’s Consumer Finance customers
with a permanent hardship. Payment reduction is provided through the
re-amortization of the remaining loan balance, typically at a lower interest
rate. Loan payments may be rescheduled over a period not to exceed
120 months. Generally, the rescheduled payment cannot be less than 50% of
the original payment amount, unless the AOT is a result of settlement, court
order, judgment or bankruptcy. The interest rate generally cannot be reduced
below 9% (except in the instances listed above). Customers must make a
qualifying payment at the reduced payment amount in order to qualify for
the modification. In addition, customers must provide proof of income,
employment is verified and monthly obligations are validated through an
updated credit report.
Long-Term Modification Programs—Summary
The following table sets forth, as of December 31, 2010, information relating to Citi’s significant long-term U.S. mortgage, card and installment loan
modification programs:
In millions of dollars
Program
balance
Program
start date (1)
Average
interest rate
reduction
Average %
payment relief
Average
tenor of
modified loans
Deferred
principal
Principal
forgiveness
U.S. Consumer mortgage lending (2)
HAMP $3,414 3Q09 4% 41% 32 years $429 $ 2
Citi Supplemental 1,625 4Q09 3 24 27 years 75 1
HAMP Re-age 492 1Q10 N/A N/A 24 years 10 —
2nd FDIC 422 2Q09 6 49 26 years 31 6
FHA/VA 3,407 2 19 28 years — —
CFNA AOT 3,801 3 23 29 years
Other 3,331 4 43 25 years 45 47
North America cards
Paydown 2,516 16 — 5 years
CCG 1,863 11 — 5 years
Interest Reversal Paydown 328 20 — 5 years
U.S. installment loans
CFNA AOT 837 7 33 9 years
(1) Provided if program was introduced after 2008.
(2) Balances for RL and 2MP not material at December 31, 2010.