WASHINGTON (AP) — Financial services giant Citigroup Inc. quickly announced Thursday it had completed its $31.1 billion purchase of Associates First Capital Corp. after federal and state banking regulators said they would not block the deal.
The regulators' move followed a pledge by Citigroup in early November to strengthen its consumer safeguards, especially for home equity loans and other loans secured by real estate, as part of its plans to acquire Associates.
Several community and activist groups have criticized lending practices at Associates, based in Irving, Texas, whose business includes high-interest loans to borrowers with inferior credit records.
One of the groups, Inner City Press/Community on the Move, said Thursday it was "disappointed in the banking regulators, so quickly allowing the largest bank to buy the most troubled (and troubling) subprime lender in the country."
The group said it planned to file suit in Cole County, Mo., seeking review and a stay of the Missouri Insurance Department's previous approval of Citigroup's application in that state.
The Federal Deposit Insurance Corp. released a letter from Michael Zamorski, the acting director of its supervision division, to a Citigroup attorney saying the acquisition "may proceed immediately."
The Office of the Comptroller of the Currency, which is the Treasury Department division that oversees nationally chartered banks, and the New York State Banking Department also announced their approval.
Zamorski said the FDIC had investigated the "competence, experience, integrity and financial ability" of New York-based Citigroup and found no reason to block its acquisition of Associates.
Citigroup has said the combined consumer finance operations of the two companies will be the largest in the United States.