Regulators ordered the New York-based company to explain procedures put in place to improve compliance with the Bank Secrecy Act and anti-money-laundering regulations, the Fed said today in a consent order.
The bank failed to conduct proper due diligence on customers and was too slow to file so-called suspicious activity reports, the Office of the Comptroller of the Currency said in April. The deficiencies prevented Citigroup from identifying risky customers and monitoring client relationships, the regulator said.
“Citigroup lacked effective systems of governance and internal controls to adequately oversee the activities” of two of its subsidiaries with respect to anti-money laundering, according to the Fed’s order.
The Fed said it acted after regulators including the OCC and the Federal Deposit Insurance Corp. filed orders against bank subsidiaries Citibank NA and Banamex USA because of deficiencies in their oversight.
The Bank Secrecy Act requires banks to report all large cash deposits to help prevent crimes such as drug trafficking and terrorist financing.
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