US Senator Elizabeth Warren has written a letter to a financial regulator asking it to impose growth curbs on Citigroup after a series of regulatory failures at the bank, reports Reuters.
Warren reportedly wrote to Acting Comptroller of the Currency, Michael Hsu, saying Citi had become “too big to manage”, citing the bank’s problems with data, controls and other management problems.
The bank was fined US$400m by the OCC in 2020 for “deficiencies in enterprise-wide risk management, compliance risk management, data governance and internal controls.”
In 2024, Citigroup incurred another US$136m in fines for continuing issues related to data-quality management and risk controls. This penalty was split between the Federal Reserve (US$61m) and the OCC (US$75m). Despite ongoing efforts by CEO Jane Fraser to address these issues, regulators noted that Citi’s progress remained insufficient.
Warren cited Citi’s infamous 2020 Revlon incident, when the bank accidentally sent US$900m to the company’s creditors, instead of the US$7.8m interest payment that was due. She also highlighted a Reuters report from July this year that accused the bank of repeatedly breaching liquidity rules designed to protect banks from collapse.
Warren called out Hsu for failing to stick to his plans for “detecting, preventing, and addressing too big to manage” banks, which he laid out in a speech made in 2023. In it, he said that banks could become “so big and complex that control failures, risk management breakdowns and negative surprises occur too frequently – not because of weak management, but because of the sheer size and complexity of the organisation.”
“According to your own framework, it is clearly time to protect the American financial system by imposing growth restrictions on Citi,” wrote Warren.
Citi and the OCC have not commented on the matter.
