Citigroup has repeatedly breached the Federal Reserve’s Regulation W, which restricts transactions between banks and their subsidiaries, according to an internal document reported by Reuters. This breach is another challenge for CEO Jane Fraser’s efforts to turn around the bank.
“We are fully committed to complying with laws and regulations and have a strong Regulation W framework in place to ensure prompt identification, escalation, and remediation of issues,” a Citigroup spokeswoman said in an emailed statement.
Fraser’s turnaround plan, initiated in response to consent orders from the Fed and the Office of the Comptroller of the Currency in 2020, has faced hurdles from regulatory issues. Recently, Citigroup agreed to pay nearly $136 million in fines for insufficient progress on these orders. The bank must now complete a resource review plan for the OCC, potentially requiring additional staff or new technologies.
Despite these challenges, Citigroup’s shares remained steady in early New York trading.