Citigroup has agreed to pay a $400m fine to the US regulators for failing to correct “several longstanding deficiencies” in its risk and control systems.
The Federal Reserve and the Office of the Comptroller of the Currency (OCC) fined the bank stating that it required “comprehensive corrective actions”.
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The US bank regulator said that the bank must overhaul its risk management, data governance and internal controls across the company.
It added that the action “requires the firm to correct several longstanding deficiencies.”
In its consent order, OCC said: “For several years, the Bank has failed to implement and maintain enterprise-wide risk management and compliance risk management program, internal controls, or a data governance program commensurate with the Bank’s size, complexity, and risk profile.”
In a statement, Citigroup said: “We are disappointed that we have fallen short of our regulators’ expectations, and we are fully committed to thoroughly addressing the issues identified.”
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By GlobalDataThe bank said that it has “significant remediation projects” underway and added that complying with the regulators will not affect its ability to serve customers.
The OCC’s consent order gives the watchdog the right to disallow any acquisitions by the bank, and if necessary, it can necessitate changes to the bank’s senior management or the board.
According to the order, the lender is also required to form new senior teams to address the issues.
The Fed and the OCC said that Citigroup has failed to address its operational issues for years, with some dating back to 2013.
In recent years, the OCC fined Citigroup with over $70m for violating fair housing and flood insurance regulations and rules on how long banks can hold foreclosed property.
In this year alone, Citigroup has spent $1bn in its bid to improve its risk functions after it mistakenly sent $900m of its own money to Revlon lenders.
The bank is pursuing legal actions against lenders who are refusing to return the money. This comes after discussions with The Federal Reserve and the OCC.
Citigroup CEO Jane Fraser, who will take the reins next year, has cited improving risk and control system as a priority.
In a statement last month, Fraser said: “We will invest in our infrastructure, risk management and controls to ensure that we operate in a safe and sound manner.”
