Citigroup Inc. agreed to pay a $70 million fine for practices in its Baltimore consumer finance unit, including raising the cost of loans to poor and credit-starved customers by requiring them to have unnecessary cosigners.

Citigroup did not admit to any wrongdoing, but it said it would make more than $50 million in restitution to borrowers affected by the practices.

The New York financial services holding company consented to the fine, the largest ever assessed by the Federal Reserve for consumer lending violations, and an order requiring it to improve compliance with several fair lending regulations and laws. Citigroup said it had already taken most of the actions required by the order.

The penalty was the latest in a string of financial settlements with government agencies and private parties in recent years resulting from Citigroup business practices. Earlier this month Citigroup agreed to pay $2.65 billion to WorldCom investors to settle claims it helped the telecom company hide losses. The company took a $4.95 billion charge this quarter to cover that settlement and to increase reserves to cover other legal challenges involving past business practices.

"The resolution of this matter is another important step in our continuing effort to address the issues of the past and move forward with standards that define best practices in our business," chief executive Charles O. Prince III said in a written statement.

The Federal Reserve action grew out of an inquiry into Citigroup's lending to lower-income or less-than-creditworthy borrowers -- so-called subprime lending -- as part of the Fed's review of several Citigroup mergers in 2001. The Fed order covers both unsecured and home equity loans made in 2000 and 2001.

CitiFinancial, the company's Baltimore-based consumer finance unit, had required cosigners for some borrowers who qualified for a loan without a cosigner. CitiFinancial then could sell credit insurance to two individuals, instead of one. CitiFinancial also was cited for not adhering to regulations requiring adequate documentation that a borrower is able to repay a high-cost loan, and for misleading Fed examiners who were investigating the matters.

In September 2002, Citigroup agreed to pay $240 million to settle accusations that CitiFinancial, one of the country's largest subprime lenders, used deceptive practices to sell home-loan insurance to customers with a history of unpaid debts.

The $70 million fine announced yesterday may be reduced by as much as $20 million to reflect restitution Citigroup plans to make to affected borrowers. Citigroup said it will probably make more than $50 million in restitution payments.

CitiFinancial chief executive Harry D. Goff said in a statement that the matters raised in the Fed order already have been remedied. "I also believe that CitiFinancial today has the best consumer protection programs and policies in the entire consumer finance industry," he said.

Chris Saffert, deputy director of the financial justice center at the Association for Community Organizations for Reform Now (Acorn), said his organization continues to be concerned about the length of time it take for regulators to investigate and hold predatory lenders responsible. Acorn has criticized Citigroup and other subprime lenders and called for more vigorous regulatory action against them.

"Citigroup has taken a number of positive steps," Saffert said. "We are hopeful that they'll continue to make changes that will make the subprime market safer for consumers."