WASHINGTON — The Federal Reserve Board on Monday approved the application by Citigroup Inc. to acquire Grupo Financiero Banamex Accival and Banco Nacional de Mexico, both of Mexico City.

The $12.5 billion deal would give Citigroup control of Mexico’s second-largest bank, strengthening its foothold in the Latin American market and letting it benefit from the name recognition Banamex enjoys among the Mexican-American population of the U.S. Southwest.

The central bank announced its decision in a 37-page order late Monday afternoon.

Numerous U.S.-based community activists had urged the Fed to block the merger because, they said, Citigroup subsidiaries do not meet their obligations to low-income borrowers. In its order approving the deal, the central bank found that “Citigroup has adopted comprehensive policies and procedures that are reasonably designed to ensure compliance with the fair lending laws and to prevent abusive lending practices.”

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