Citigroup Gets Fined by US Regulators

Regulators imposed a $136 million fine on Citigroup for ongoing deficiencies in controls and risk management. The Federal Reserve and the Office of the Comptroller of the Currency criticized Citigroup for insufficient progress on various critical issues. With only days before Citigroup’s scheduled date to reveal its second-quarter financial earnings, this marks yet another difficult challenge for the struggling New York bank.

Citigroup’s fines have been broken down between $60.6 million due to the Fed and $75 million due to the OCC. These amounts are a result of a 2020 consent order related to “deficiencies in its enterprise-wide risk management, compliance risk management, data governance, and internal controls.” The combined total comes after the $400 million that the company has already paid due to the previous order.

“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.”

Michael J. Hsu, acting Comptroller of the Currency, via Yahoo! Finance

Despite the setback, CEO Jane Fraser expressed confidence in the bank’s transformation efforts, noting that progress may not be linear. She also declared that the organization would spend whatever it takes in order to deal with any consent orders.

Citigroup has previously faced tremendous challenges, especially after the financial crisis of 2008. The bank would have most likely failed and shut down entirely if not for the government’s intervention. This caused a major slimming down of Citigroup.

Now, Fraser struggles with fulfilling solutions to the bank’s problems, although she has had some success in selling parts of Citigroup’s consumer banking business in Mexico.

Last month, Citi also sent out a document that detailed how the bank planned to make its exit in case of a total shutdown, but that document was rejected by banking regulators.

Even though this development isn’t particularly positive for the company, Citigroup’s stock only fell 1% in after-hours trading following the announcement of these fines.