Citigroup Fined $400 Million for Risk Management Deficiencie
Citibank has agreed to pay a $400 million fine and overhaul its internal data protection, compliance and risk management controls to stay enforcement actions taken by two US regulators.
The fine was from the US Treasury's Office from the Comptroller from the Currency in parallel with a separate action through the Federal Reserve Board. Work said that the fine was based on Citibank's “longstanding failure to establish effective risk management and data governance programs and internal controls.”
The OOC asserted the issues dated to 2021 but had not been adequately addressed.
Meanwhile, the Federal Reserve said that it had been following through against Citigroup, the bank's holding company, for its alleged failure to consider “prompt and effective actions to fix practices previously identified by the board within the areas of compliance risk management, data quality management and internal controls”, among some other reasons.
The company wasn't ordered to pay another fine, but has been issued a cease-and-desist order requiring it to submit plans for how it will improve internal compliance and risk management controls.
In an argument, Citibank said that it had been dedicated to improving its standing using the regulators and would commit $1 billion to risk management-related programmes this season.
“We are disappointed we have fallen short of our regulators’ expectations, and we are fully dedicated to thoroughly addressing the problems identified in the Consent Orders,” Citibank said. “The entire management team is committed to achieving operational excellence and a best-in-class risk and control environment.”
The regulators' actions come just one month after Citigroup announced the retirement of Michael Corbat, who has served as the company's chief executive since 2012. He'll be replaced by Jane Fraser, the group's current president and leader of worldwide banking, who definitely are the very first woman to lead a major US bank.
