Regulators have fined Citigroup a combined $135.6 million, saying the lender failed to make enough progress in resolving internal data management and risk issues.
In a July 10 pstatement, the Federal Reserve Board said it fined Citigroup $60.6 million for failing to fulfill a 2020 order obliging the bank to fix the issues and implement controls to manage ongoing risks.
At the same time, the Office of the Comptroller of the Currency (OCC) announced a $75 million fine against Citibank, the main U.S. banking subsidiary of Citigroup, based on the same order.
Citigroup has “made insufficient progress remediating its problems with data quality management and failed to implement compensating controls to manage its ongoing risk,” the Federal Reserve Board said, adding that it is still monitoring Citigroup’s efforts to comply with the 2020 agreement.
The OCC said its fine, to be paid to the U.S. Treasury, was for the bank’s “failure to meet remediation milestones and make sufficient and sustainable progress towards compliance with the 2020 order” and its “lack of processes to monitor the impact of data quality concerns on regulatory reporting.”
“Citibank must see through its transformation and fully address in a timely manner its longstanding deficiencies,” said Acting Comptroller of the Currency Michael J. Hsu. “While the bank’s board and management have made meaningful progress overall, including taking necessary steps to simplify the bank, certain persistent weaknesses remain, in particular with regard to data.”
Citigroup Has Not Made Progress Fast Enough, CEO Says
Mr. Hsu stressed that the bank must “refocus its efforts on taking necessary corrective actions and ensuring appropriate resources are allocated for this purpose.”
The latest fines come in addition to a $400 million penalty that Citibank paid the OCC in 2020 due to its “unsafe or unsound banking practices” stemming from its “long-standing failure to establish effective risk management and data governance programs and internal controls.”
That fine came after Citibank mistakenly sent half a billion dollars of its own money to creditors of its client, Revlon.
In a statement issued on the day the fines against Citigroup were announced, CEO Jane Fraser said the bank had made “good progress” in addressing the consent orders.
However, she acknowledged there are areas in which it has “not made progress quickly enough,” including its in data quality management.
The bank has intensified its focus and increased its investment in its transformation efforts over the last several months and is committed to spending what is necessary to address the regulatory issues, she said.
“We’re confident that we have the financial resources to support both our transformation and investment in our businesses as well as meet our strategic and financial goals, including the capital distribution we described in late June,” the CEO said. “We’ve always said that progress wouldn’t be linear, and we have no doubt that we will be successful in getting our firm where it needs to be in terms of our transformation.”
Reuters contributed to this report.
From The Epoch Times