Citibank hit with $30 million penalty for OREO-related violations

Citibank’s repeated violations of the statutory holding period for other real estate owned (OREO) resulted in a civil money penalty assessment of $30 million against the bank, imposed through a consent order with the Office of the Comptroller of the Currency (OCC) that was signed and announced Friday.

The order states that Citibank, N.A. (Sious Falls, S.D.) engaged in more than 200 such violations alone between April 4, 2017, and Aug. 14, 2019. It shows that underlying issues, however, date back to at least 2015.

“In 2015, the Bank reviewed its OREO processes and portfolio and identified violations of 12 U.S.C. § 29 and 12 C.F.R. § 34.82,” the order states. “These violations resulted from the Bank’s deficient processes and controls in the identification and monitoring of the OREO holding period. Specifically, the Bank lacked adequate policies, procedures, and processes to effectively identify and monitor the holding period for OREO assets. The Bank committed to developing and implementing corrective actions to address these deficiencies.”

Problems persisted.

“Following additional efforts to correct the root cause of the continued OREO holding period violations, the Bank recommitted to implementing corrective actions by August 31, 2018. The Bank failed to meet its commitment, resulting in additional violations of 12 U.S.C. § 29 and 12 C.F.R. § 34.82,” the order states.

The order notes that OCC continues to monitor this activity and that the bank has “significantly reduced its inventory of OREO assets” over the last 12 months.

OCC Assesses $30 Million Civil Money Penalty Against Citibank