Fed Terminates Decade-Old Money Laundering Enforcement Action vs Citigroup

The Federal Reserve has terminated a decade-old enforcement action against Citigroup that focused on deficiencies tied to the banking giant’s anti-money laundering (AML) practices.

On Oct. 1, the central bank announced the termination of the 2013 action — one that had not carried a fine.

However, the action does discuss several changes to various bank-wide efforts to monitor and address risk, and to report its findings periodically to regulators.

In terms of the consent order itself, the Fed had brought its action against Citi and its former Banamex unit (since split off from the company’s corporate and investment operations) and its Citigroup NA unit.  As detailed here, Citi said in May of 2023 that it planned to pursue an initial public offering (IPO) for Banamex after exiting the consumer banking market in Mexico.

The order had mandated that Citigroup beef up its safeguards in the wake of deficiencies that had been alleged by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency.

In the 2013 documentation of the consent order, the Fed said that Citigroup had “adopted a firmwide compliance risk management program designed to identify and manage compliance risks across the consolidated organization related to compliance with all applicable laws, rules, and regulations,” and that the consent order did not constitute an admission or denial by the allegations made as part of the enforcement action.

In terms of procedures, Citigroup’s board of directors consented to submit to the Reserve Bank “an acceptable written plan to continue ongoing enhancements to the board’s oversight of Citigroup’s firmwide compliance risk management program with regard to compliance with BSA/AML Requirements.” That plan would detail funding for personnel and systems, among other resources to be deployed — and details about how the policies would be “proactive” in scope. Citigroup has also consented to present measures that would ensure the resolution of the Bank Secrecy Act (BSA)/AML-related audit compliance.

Citigroup consented to complete a review of the effectiveness of Citigroup’s firmwide BSA/AML compliance program and to prepare a written report of findings and recommendations to the Fed, including transaction monitoring and suspicious activity reporting.