Regulators fine Citigroup $400m over data, risk mismanagement

*There are ‘significant ongoing deficiencies’ in the bank’s risk-management programmes, says Fed

Alexander Davis | ConsumerConnect

For its alleged ‘longstanding’ corporate failure and unsafe or unsound banking practices potentially damaging to consumers, the US Treasury Department’s Office of the Comptroller of the Currency (OCC) has slammed Citibank a $400 million fine.

It was learnt the agency disclosed Wednesday, October 7, that it is penalising Citibank for its “longstanding failure to establish effective risk management and data governance programs and internal controls.”

The US Treasury Department’s Office of the Comptroller of the Currency stated that it would require the bank to take “comprehensive corrective actions” in the areas found to have deficiencies before it can make any significant acquisitions.

Besides the fine, Citigroup, which Citibank’s parent company, is facing a separate but related enforcement action by the Federal Reserve Board, according to report.

The Fed stressed that it also found “significant ongoing deficiencies” in the bank’s risk-management programmes.

The Federal Reserve Board has given Citigroup 120 days to submit a report detailing how it will fix the shortcomings identified.

Citi, in a statement, however, explained that it is “fully committed” to addressing the concerns laid out by regulators.

The company plans to invest more than $1 billion this year in its risk management and controls efforts.

It stated: “Citi has significant remediation projects underway to strengthen our controls, infrastructure and governance.

“While we have made progress in each of these areas, we recognize that substantial improvement is still required.”

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