Federal Reserve Terminates 2013 Enforcement Action Against Citigroup Over Money Laundering Deficiencies

The Federal Reserve has officially terminated a 2013 enforcement action it had filed against Citigroup, which had focused on the bank's shortcomings in its anti-money laundering (AML) programs. The enforcement action, which did not involve a fine, was brought against both Citigroup and its Banamex subsidiary, citing deficiencies in the firms’ ability to police money laundering activities.

As part of the enforcement, Citigroup was instructed to enhance its AML efforts and regularly update regulators on its progress. The termination of the action comes as Citi prepares to separate Banamex from the rest of the bank, a move the bank announced in late 2023. The split is expected to take place in the second half of 2024.

A spokesperson for Citi declined to comment on the Federal Reserve's decision to lift the enforcement action.

The announcement follows a series of penalties imposed on Citi for continued compliance issues. Recently, the bank faced fines totaling $136 million due to its lack of progress in resolving these problems. In July, both the Federal Reserve and the Office of the Comptroller of the Currency levied penalties of $60.6 million and $75 million, respectively, against Citi.

These fines are in addition to a $400 million penalty Citi paid as part of a 2020 consent order. The order was issued by regulators in response to “significant ongoing deficiencies” in the bank’s compliance and AML programs. Moreover, in June, Citi was fined $14 million in Germany due to failures in controlling its trading systems.

The recent developments highlight Citi’s continuing struggle with regulatory compliance, even as it moves to finalize the separation of Banamex from the rest of its operations.

By fLEXI tEAM