$400 million penalty forced on Citibank after ‘long-standing’ failure to correct compliance shortcomings

A $400 million civil money penalty (CMP) against Citbank, N.A., of Sioux Falls, S.D., was announced late Wednesday by the federal regulator of national banks, along with an enforcement action against the bank’s New York-based holding company by the Federal Reserve, both in relation to the bank’s and firm’s regulatory compliance programs.

In a release, the Office of the Comptroller of the Currency (OCC) said the CMP against the bank was “related to deficiencies in enterprise-wide risk management, compliance risk management, data governance, and internal controls.” The OCC said the bank’s “long-standing” failure to establish effective risk management and data governance programs and internal controls prompted the penalty.

The bank also faces a cease and desist order from the OCC, which requires the bank to take “broad and comprehensive actions” to fix its systems.

Significantly, that order requires Citibank to seek the “non-objection” of the regulator before it can make “significant new acquisitions.” The OCC said the order also reserves authority to impose other restrictions, including changes in senior management or the bank’s board if the bank doesn’t not make “timely, sufficient progress in complying with the order.”

In its enforcement action (also a cease and desist order), the Fed requires the firm “to enhance its firm-wide risk management and internal controls.”

OCC Assesses $400 Million Civil Money Penalty Against Citibank

Federal Reserve announces enforcement action against Citigroup Inc. that requires the firm to correct several longstanding deficiencies