Citigroup Repeatedly Violated Federal Reserve Rule
Bank Fined $136 Million for Failure to Fix Risk Management and Data Control Issues
Regulatory Notices Issued as Bank Continues Work on 2020 Consent Orders
NEW YORK, July 31 (Reuters) - Citigroup (CN) has been repeatedly violating a US Federal Reserve rule that limits intercompany transactions, according to regulatory notices obtained by Reuters. The bank's actions come as it works through two 2020 consent orders in which the Fed and the Office of the Comptroller of the Currency (OCC) directed the bank to fix deficiencies in its risk management and data controls.
The violations of the Fed's rule, which is designed to limit the risk of contagion within the financial system, were discovered during a recent examination by the central bank. The Fed found that Citigroup had exceeded the limits on intercompany transactions on multiple occasions, exposing the bank to increased risk.
In response to the violations, the Fed has issued a cease-and-desist order against Citigroup, ordering the bank to immediately stop violating the rule. The Fed has also fined the bank $136 million for its failure to fix the risk management and data control issues that were identified in the 2020 consent orders.
Citigroup has agreed to pay the fine and has committed to taking steps to correct the violations. The bank said in a statement that it is "committed to complying with all applicable laws and regulations" and that it is "working diligently to address the issues identified by the Fed."
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