Banking and Finance Law Daily Fed and OCC announce enforcement actions against Citigroup and Citibank
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Thursday, October 8, 2020

Fed and OCC announce enforcement actions against Citigroup and Citibank

By Nicole D. Prysby, J.D.

The agencies announced cease and desist orders against Citigroup and Citibank, including a $400 million civil penalty against Citibank.

The Federal Reserve Board announced an enforcement action against Citigroup Inc. that requires the bank holding company to correct previously-identified issues in the areas of compliance risk management, data quality management, and internal controls. In a separate but related action, the Office of the Comptroller of the Currency announced that it assessed a $400 million civil money penalty against Citibank, N.A., based on similar deficiencies.

The Fed and the OCC issued cease and desist orders against Citigroup and Citibank. According to the cease and desist order filed by the Fed, Citigroup has failed to remediate deficiencies identified by the Fed going back to 2013. Those deficiencies relate to Citigroup’s anti-money laundering compliance program and its compliance and control infrastructure for its foreign exchange program and designated market activities. Citigroup has begun taking corrective action and its board of directors are to take appropriate steps to ensure that Citibank complies with OCC Orders. Citigroup will also submit an oversight plan, conduct a gap analysis of its enterprise-wide risk management framework and internal controls systems, and submit quarterly progress reports.

The OCC’s cease and desist order for Citibank notes a number of deficiencies related to to the bank’s enterprise-wide risk management and compliance risk management program, such as the failure to establish an effective risk governance framework. Citibank will appoint a compliance committee, develop a action plan, analyze its data governance program to identify deficiencies, create an enterprise-wide risk management program, improve its capital planning processes and internal controls, complete a staffing and technology resource staffing assessment, subject itself to restrictions on significant new acquisitions, and enhance oversight. The OCC also announced that it imposed a $400 million civil money penalty against Citibank.

Citi issued a statement in response to the actions by the Board and OCC, saying that it is committed to addressing the issues identified in the Consent Orders and has significant remediation projects underway to strengthen its controls, infrastructure, and governance.

Companies: Citi; Citibank, N.A.; Citigroup Inc.

MainStory: TopStory BankingOperations EnforcementActions PrudentialRegulation

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