Citigroup Fined $135.6 Million by Fed and OCC for Longstanding Compliance Issues

• The Federal Reserve and the Office of the Comptroller of the Currency (OCC) have fined Citigroup $135.6 million for not resolving longstanding issues in its risk management and compliance systems.
• The punitive measures came after Citigroup failed to meet the remediation goals outlined in enforcement actions from the last quarter of 2020.
• Regulators highlighted persistent deficiencies in Citigroup’s data management and internal controls despite some progress made by the bank.

Citigroup faces increased regulatory scrutiny and a hefty $135.6 million fine for failing to address critical risk management and compliance issues.

Citigroup Penalized for Inadequate Progress on Compliance Issues

In a recent regulatory action, U.S. banking giant Citigroup has been hit with a $135.6 million fine by the Federal Reserve and the Office of the Comptroller of the Currency (OCC). This hefty penalty was imposed due to the bank’s failure to resolve longstanding deficiencies in its risk management, compliance, data handling, and internal control mechanisms. The original issues were flagged in enforcement actions initiated in the last quarter of 2020.

Regulatory Background and Previous Commitments

Back in 2020, Citigroup committed to a series of remediation efforts aimed at overhauling its data governance and internal control frameworks. The bank had agreed to implement significant changes to ensure compliance with regulatory standards. However, a recent review by regulators revealed that Citigroup has not made the requisite progress to address their longstanding concerns adequately.

Persistent Weaknesses and Regulatory Expectations

Regulators pointed out that while Citigroup has made some meaningful strides in simplifying its operations, significant deficiencies linger, particularly in data management. The Federal Reserve emphasized that Citigroup’s board and management must refocus their efforts to achieve full compliance and allocate the necessary resources for corrective actions. The Fed warned of additional penalties and formal actions if these persistent issues are not resolved promptly.

Historical Context and Financial Implications

According to the Violation Tracker database, Citigroup has paid over $26.945 billion in fines since 2000 to resolve various enforcement actions, including securities abuses, banking violations, and investor protection breaches. This long history of fines underscores the ongoing challenges Citigroup faces in maintaining robust compliance and risk management frameworks.

Conclusion

The recent $135.6 million fine underscores the critical importance of robust risk management and compliance systems in the banking industry. Citigroup’s continued struggles to address these issues highlight the need for concerted efforts and resource allocation to meet regulatory standards. As regulators intensify their scrutiny, it remains to be seen how Citigroup will navigate these challenges and ensure long-term compliance and operational integrity.

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