U.S. Regulators Impose $136 Million Fine On Citi
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U.S. bank regulators fined Citigroup $136 million for not making enough progress in fixing data management issues found in 2020. The bank must show that it is dedicating enough resources to solve these problems.
The Fed stated that both the Federal Reserve and the Office of the Comptroller of the Currency (OCC) worked together to take action against Citigroup. This action is aimed at helping the bank solve its data management problems and implement controls to handle ongoing risks.
Citigroup Aims To Address And Fix Its Regulatory Issues
The fines make it harder for Chief Executive Officer Jane Fraser as she deals with the bank’s rules problems and simplifies its setup after letting go of many workers. In 2020, regulators fined Citi $400 million for “ongoing issues” in how it controls things internally and manages risks, including making sure data is secured.
The Fed noted that Citigroup made a big plan to fix its data problems. But last year, a Fed check found the bank still had issues and needed to do more to move forward. According to the Fed, Citigroup broke the 2020 rule by not finishing the steps in its plan on time.
Fraser stated that the OCC is also demanding that the bank establish a new quarterly process. This ensures that the bank is dedicating enough resources to achieving its milestones.
Citigroup Seeks To Improve Its Internal Controls And Risk Management
Fraser’s extensive reorganization involved laying off employees who were handling regulatory orders. This information comes from two sources familiar with the situation who preferred to remain anonymous when discussing personnel matters.
In another statement, Fraser noted that the bank has put more effort and money into changing its efforts in recent months. She revealed that while they’ve made big steps to make operations simpler and deal with consent orders, they still need to move faster to improve how they handle data quality.
Fraser stated that Citi would pay whatever it needed to fix regulatory problems. She added that her team has always known progress would be challenging.
David Wagner, a portfolio manager at Aptus Capital Advisors, who is still optimistic about the stock, also stated that Citibank has always had some issues with regulators.
Scott Siefers, an analyst at Piper Sandler, also added that the fines remind them that Citi’s regulatory work is like a marathon, not a sprint, with some challenges. He stated that the stock might see some short-term weakness.
