Sen. Elizabeth Warren, D-Mass., is urging the Office of the Comptroller of the Currency to impose growth restrictions on Citigroup and consider forcing a breakup of the megabank if it doesn't adequately reform its long-troubled risk management and internal controls systems.
Warren argued in a letter to Acting Comptroller Michael Hsu this week that New York-based Citi has become "too big to manage." She accused the company of failing to "reform and modernize its operations despite being the subject of multiple enforcement actions" by both the OCC and the Federal Reserve.
In the letter, dated Oct. 2, Warren implored Hsu to follow the OCC's four-phase program to address repeat offenses by large banks, saying that so far, the regulator has taken the first two steps — giving private warnings and implementing public enforcement orders and fines — and now should move to the third phase, which would put restrictions on Citi's ability to get bigger.
The OCC is the primary regulator of Citibank, N.A., Citigroup's main banking subsidiary.
Warren criticized Citi for being "unable or unwilling to address its repeat and serious failures," referring to enforcement orders it has racked up over the years and millions of dollars in fines.
"According to your own framework, it is clearly time to protect the American financial system by imposing growth restrictions on Citi," Warren wrote. "If these growth restrictions do not result in the improved management of Citi's deficiencies, the OCC should consider breaking up this bank."
"It is time for the OCC to get serious about these failures," she added.
In July 2024, the OCC and the Fed imposed another $136 million of civil money penalties against Citi, saying it had not made enough progress in the years-old remediation plan that Citi crafted in response to the 2020 orders. Specifically, the company hadn't made sufficient improvements to its data quality management program, the agencies said.
The Federal Reserve has lifted a 2013 order relating to anti-money-laundering compliance issues, including in the megabank's now-defunct Banamex USA unit.
Between 2021 and 2023,Citi spent $7.4 billion on technology, consultants and compensation related to the overhaul, as well as on other efforts to modernize the firm, executives have said.
Regulators have imposed a cap on the growth of a big bank once before. Wells Fargo is still operating under a six-year-old cap imposed by the Fed, which prevents the company from growing beyond $1.9 trillion of assets.
Last week, Warren sent a separate letter pressing the OCC and the Fed to more carefully scrutinize New York Community Bancorp, which experienced severe turmoil earlier this year and is undergoing a major strategy overhaul.
An earlier version of this article included an error in connection with the 11-year-old enforcement action against Citi that was recently lifted. It was the Fed, not the OCC, that freed Citi from that enforcement action.
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