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Citigroup Fined $136 Million for Insufficient Progress on Data Management Issues

By  |  July 16, 2024
Citigroup Fined $136 Million for Insufficient Progress on Data Management Issues

Citigroup has been fined $136 million by U.S. bank regulators for failing to make sufficient progress in addressing data management issues identified in 2020. The joint enforcement action from the Federal Reserve and the Office of the Comptroller of the Currency (OCC) highlights ongoing concerns regarding the bank’s efforts to repair data management problems and implement necessary controls to manage ongoing risks.

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    The Federal Reserve announced the fines on Wednesday, marking the latest challenge for CEO Jane Fraser as she works to rectify the bank’s regulatory failings and streamline its operations following substantial layoffs. This recent penalty adds to the $400 million fine imposed on Citigroup in 2020 for “ongoing deficiencies” in its handling of risk management and internal controls, including data quality management.

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    According to Reuters, despite Citigroup’s agreement to a comprehensive plan to address its data management faults, a Federal Reserve examination last year revealed that the bank still had deficiencies and had not made adequate progress. “Citigroup violated the 2020 order through delays in completing milestones included in its approved plan,” the Federal Reserve stated.

    The OCC has also mandated that Citigroup implement a new quarterly process to ensure it is allocating sufficient resources to meet its milestones. In a memo to employees obtained by Reuters, Fraser acknowledged the setback but emphasized the importance of staying focused on the bank’s improvement efforts. “Setbacks like this one today are visible and I know they can be disappointing,” Fraser wrote. “But they absolutely cannot distract us from the work we’re doing in every corner of the bank…Efforts of this scale and importance are undeniably hard.”

    This enforcement action underscores the regulators’ commitment to ensuring that Citigroup addresses its data management deficiencies and strengthens its risk management practices.

    Source: Reuters