Citibank gets hit with fines by Fed, OCC for insufficient progress on risk management issues

The U.S. Office of the Comptroller of the Currency (OCC) amended an Oct. 7, 2020, Cease and Desist Order against Citibank related to deficiencies in its risk management, compliance, data governance, and internal controls.

The amendment is based on the bank’s failure to meet remediation milestones and make sufficient progress towards compliance. The amendment was issued to ensure that Citibank prioritizes the remediation work.

OCC officials said the amendment supplements the 2020 order but does not replace it, as it remains in full force and effect.

“Citibank must see through its transformation and fully address in a timely manner its longstanding deficiencies,” Acting Comptroller of the Currency Michael Hsu said. “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. Today’s amendment requires the bank to refocus its efforts on taking necessary corrective actions and ensuring appropriate resources are allocated for this purpose.”

In addition, the OCC assessed a $75 million civil money penalty against Citibank based on the bank’s violations of the 2020 Order and lack of processes to monitor the impact of data quality concerns on regulatory reporting.

The Federal Reserve Board took a separate but related action against Citigroup, which is the holding company for Citibank.

The Federal Reserve Board said Citigroup has made insufficient progress remediating its problems with data quality management. It also added that the company failed to implement compensating controls to manage its ongoing risk.

The Federal Reserve Board fined Citigroup $60.6 million for violating the board’s 2020 enforcement action. The Fed continues to monitor Citigroup’s actions to comply with the 2020 action, which remains in effect.

The total penalties announced by the Fed and the OCC total approximately $135.6 million.

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