The fine by the Federal Deposit Insurance Corp includes $40 million in civil penalties to California’s Department of Business Oversight.
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According to Citigroup, the deficiencies were identified in BUSA’s bank secrecy act/anti-money laundering (BSA/AML) program. Banamex USA in Century City, Calif. did not comply with these requirements, the FDIC said. The payment will be the largest a bank has ever made to the California regulator, the state’s Department of Oversight said in a statement on Wednesday. Therefore, in line with Citi’s simplification of its business model, the BUSA Board of Directors, in consultation with management, has decided to wind down banking operations at BUSA, subject to a satisfactory liquidation plan.
As detailed by ValueWalk, last year turned out to be a tough year for Banamex, which suffered from scandals leading to criminal investigations in both the U.S. and Mexico as well as the firing of several senior execs.
BUSA, an affiliate of Banco Nacional de Mexico (Banamex), could not operate as per the required scale to generate consistent quality earnings.
Citigroup said in its statement Wednesday that it will liquidate Banamex USA, which now has three branches, 300 full-time employees and $500 million of assets. The news comes a day after Citi’s consumer bank was ordered by the U.S. Consumer Financial Protection Bureau to pay $770 million over illegal credit card practices.
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As Compliance Week previously reported, Citigroup said in an annual filing with the Securities and Exchange Commission in February that it was under investigation by the Financial Crimes Enforcement Network and the CDBO for BSA and AML violations at Banamex USA.
