U.S. Senator Urges OCC to Impose Growth Limitations on Citigroup

Core Viewpoint - Citigroup Inc. is facing significant regulatory challenges, with Senator Elizabeth Warren advocating for growth limitations due to the bank's ongoing issues with data management and controls [1][2][4]. Regulatory Issues - Senator Warren has urged the Office of the Comptroller of the Currency (OCC) to escalate actions against Citigroup, moving to the third phase of a four-step program aimed at penalizing large banks for repeated offenses [3][8]. - Citigroup has accumulated multiple enforcement orders and fines over the years, indicating a pattern of serious compliance failures [4][5]. Recent Penalties - In 2020, Citigroup was fined $400 million by the OCC and Federal Reserve for longstanding risk management issues, and in July 2024, it faced an additional fine of $136 million for inadequate progress in addressing data management problems [6]. - The Federal Deposit Insurance Corporation and OCC raised concerns in March 2023 regarding Citigroup's controls related to the Bank Secrecy Act and Anti-Money Laundering (AML) requirements, although a decade-long enforcement action was recently terminated by the Fed [7]. Proposed Actions - Senator Warren has called for stringent restrictions on Citigroup's growth capabilities, echoing sentiments expressed by Acting Comptroller Michael Hsu regarding the need for serious enforcement against repeat offenders [8]. - The OCC has previously imposed growth caps on other large banks, such as Wells Fargo, which faced restrictions on its asset growth [9]. Remedial Actions - Since becoming CEO, Jane Fraser has prioritized revamping Citigroup's risk management infrastructure, with significant investments aimed at improving technology and internal controls to address compliance issues [10]. Stock Performance - Over the past six months, Citigroup's shares have decreased by 0.5%, contrasting with a 5.3% growth in the industry [11].