1. Yes there are moral concerns with subprime leading; they are loans lenders provide to those who have been disqualified from borrowing with prime loan companies (Thibodeaux, n.d.). There is a need for them but care must be taken not to take advantage of those individuals that get them. The moral concerns are the fact that predatory lenders seem to target those groups that are vulnerable and in need of housing and money to make ends meet. Let me make this perfectly clear that there is a place for subprime loans, they give the person that had some issues earlier on in their life to be able to acquire money for bills and buy a home for their family however, using immoral acts as forcing insurance that they may not want and charging very high interest rates are not call for. The moral concerns are based on utilitarian, which chooses the action that yields the greatest good (Baron, 2010). Moral good should be judged on consequences (is harm done by forcing single premium insurance and very high interest) the consequences are evaluated by human well-being (is customer better off before or after the loan) evaluation of individual preference (did the consumer have a choice) the action was aggregate and yielded good (was the customer gaining more from the loan or in the end losing more) the morally justified maximizes aggregate well-being (giving the customer a choice to take insurance and charging a reasonable interest rate). 2. CitiFinancial should stop the practice that the Associates were doing in charging the lender single premium life insurance and not fully making sure the customer knows the policy. The company has an ethical obligation to evaluate the alternatives and formulate the policy to ensure that the customers interest is not affected (Baron, 2010). This is a prime example of taking advantage of people when they at their most lowest and not giving them the option to refuse, making them think they won’t get the loan if they refuse. Immediately CitiFinancial should fully explain the single premium life insurance policy and give the customer the option to choose or refuse the policy. Furthermore, charging the premium up front and adding it to the principle should also stop. 3. CitiFinancial should research the actions of the Associates, ensuring that the merger will be successful. Starting a grassroots approach with the activist groups and consumers should be done to offset the previous predatory lending practices. In reference to the excessive interest rates they should be justified and fairly applied to the consumer. They should also stop charging the points and fees. Loading the loans with prepayment penalties with high interest-rates should also be removed from the company. CitiFinancial should revisit their late fee charges ensuring they are in-line with what should be charged. All aspects of the loan should be fully disclosed and explained to the customer. There should never be any harassing or intimidating collection practices used to collect the debts, all customers need to be treated with respect. 4. The first person in line to work with and support the ACORN and AARP should be Citigroup. Because of the actions of the Associates predatory lending practices and targeting the elderly, low income, and minorities supporting ACORN and AARP would not only be a good practice but will be good for business. The deregulation of the banking industry has created an opening for groups that are not moral to enter the field. Since the 1999 Citigroup motto was “Leading by Example” they should also support tighter regulatory supervision of the subprime lending industry (Baron, 2010). Leading the field can put them in a better light with the groups they want to do business with. 5. Some of the policies that Citigroup should adopt for their subprime lending division should start with ensuring they treat every customer fair and not target certain groups for lending. Today’s economy is slowly improving after the 2009 collapse, more people spreading across all groups may have to use subprime loans because of all the credit issues and fully explaining and disclosing all terms of the loan should be a top policy. Another policy should be to give the customer the option to take out single premium insurance on the loan without it being added to the principle.

Baron, D. P. (2010). Business and its environment (6th Ed.). Upper Saddle River, NJ: Prentice Hall.
Thibodeaux, W. (n.d.). How Business Ethics Relates to Subprime Mortgage Market. Retrieved from http://www.ehow.com/info_7754132_business-relates-subprime-mortgage-market.html