US regulators fine Citigroup $136m for “insufficient progress” towards compliance with 2020 consent order
The Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board have fined Citigroup a combined $135.6 million for making “insufficient progress” in rectifying issues with its data quality management first flagged in a 2020 consent order.
Citigroup fined $135.6 million
The OCC says it has amended its 2020 consent order against Citibank due to the bank’s “failure to meet remediation milestones and make sufficient and sustainable progress towards compliance with the 2020 order”. It adds it has imposed a $75 million civil money penalty “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 2020 order, which the OCC says remains in “full force and effect”, pertained to alleged deficiencies in Citibank’s data governance, internal controls, risk management, and compliance risk, and at the time resulted in a $400 million fine.
Acting Comptroller of the Currency Michael J. Hsu, states: “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 a “separate but related action,” according to the OCC, the Federal Reserve Board has fined Citigroup $60.6 million for “violating the board’s 2020 enforcement action”.
The Federal Reserve Board says a 2023 examination conducted by the Federal Reserve Bank of New York found that “Citigroup had ongoing deficiencies in data quality management and ineffective compensating controls to mitigate associated risks”, adding that Citigroup’s “progress in executing its plan to enhance its data quality management program under paragraph 4 of the 2020 order, or toward the implementation of appropriate compensating controls has not been adequate”.
In a statement, Jane Fraser, Citigroup’s CEO, says: “We have acknowledged that, despite making good progress in simplifying our firm and addressing our consent orders, there are areas where we have not made progress quickly enough, such as in our data quality management.
“We’ve intensified our focus and increased our investment in those areas over the last several months. We will get these areas where they need to be, as we have done in other areas of the transformation.”
The news follows Citi’s announcement earlier this year that it will cut around 20,000 jobs by 2026 following a “disappointing” fourth quarter of 2023, in which the group reported a $1.8 billion net loss.
