By Pete Schroeder
Dec 18 (Reuters) – Citigroup took another step toward fixing its longstanding compliance problems, announcing on Thursday that a U.S. bank regulator had removed part of a sweeping punishment requiring the bank to tackle its issues.
The nation’s third-largest bank said the Office of the Comptroller of the Currency had withdrawn a 2024 amendment to a 2020 consent order. The original order, which remains in effect, requires the bank to increase its efforts to address longstanding operational and risk management issues after struggling to show progress.
“Our transformation has been our number one priority, and we are dedicating the resources necessary to modernize our systems and strengthen our risk and control environment,” the bank said in a statement.
The move, while incremental, is another step in the right direction for the bank, which has labored for years to satisfy regulatory concerns about its management. Reuters reported Wednesday that the Federal Reserve closed three confidential notices requiring the bank to fix trading risk management weaknesses.
The OCC agreed to terminate the 2024 amendment one week ago, according to documents posted on the agency’s website. That order had required the bank to show regulators they were devoting enough resources to address their issues, or potentially have their ability to distribute capital via dividends and other measures limited.
The underlying 2020 order prescribes the bank to make numerous operational changes to address data management problems and implement controls to manage ongoing risks.
The bank was originally fined $400 million in 2020 for failing to address persistent operational issues, and regulators took the unusual step of fining the firm another $136 million in 2024 alongisde the added amendment.
A bank spokesperson declined to comment beyond the bank’s statement. An OCC spokesperson did not respond to a request for comment.
(Reporting by Pete Schroeder, additional reporting by Tatiana Bautzer and Pritam Biswas; Editing by Lananh Nguyen and Alan Barona)
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