The US banking regulators have imposed a total penalty of $135.6m on Citigroup for failing to address data-quality management and risk control deficiencies identified in 2020.
The bank will pay $60.6m to the Federal Reserve System (FRS) and the remaining $75m to the US Office of the Comptroller of the Currency (OCC)
In 2020, Citigroup was fined a $400m civil money penalty by the OCC to fix problems in various areas of risk management, data governance programmes and internal controls.
It included data quality management and regulatory reporting, compliance risk management, capital planning, as well as liquidity risk management.
Although the bank agreed to fix the failures, a 2023 examination by the Federal Reserve Bank of New York found that Citigroup still had issues with data quality management and ineffective controls to manage associated risks.
The examination concluded that the bank’s efforts to improve its data quality management, as required by the 2020 order, were not sufficient.
Based on the Citigroup’s violations of the 2020 order and lack of processes to monitor the impact of data quality concerns on regulatory reporting, the OCC and FRS penalised Citi.
Acting Comptroller of the Currency Michael Hsu said: “Citibank must see through its transformation and fully address in a timely manner its longstanding deficiencies.
“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.”
The US OCC also said that Citigroup needs to refocus its efforts on taking necessary corrective actions and ensuring appropriate resources are allocated for the purpose.
Citigroup CEO Jane Fraser said: “We have acknowledged that, despite making good progress in simplifying our firm and addressing our Consent Orders, there are areas where we have not made progress quickly enough, such as in our data quality management.
“We’ve intensified our focus and increased our investment in those areas over the last several months. We will get these areas where they need to be, as we have done in other areas of the Transformation.
“As we’ve said from the beginning of this multi-year effort, we’re committed to spending what is necessary to address our consent orders, as our agreement with the OCC demonstrates.”
