Reuters is reporting the infractions for the first time. Under so-called Regulation W, banks are required to restrict transactions like loans to the affiliates they control. The rule is meant to protect depositors whose money is insured up to $250,000 by the government.
The Regulation W infractions come as Citi works to fix separate problems in its risk management and internal controls. Authorities labeled its risk practices “unsafe and unsound” in 2020, and rebuked Citi over how it measured counterparty risks in 2023.
This year, regulators criticized the bank’s resolution planning, and most recently punished it with $136 million in fines for making insufficient progress on compliance.
The firm’s “subsequent reaction to the breaches resulted in liquidity reporting inaccuracies,” according to the document, which provides a 2023 year-end snapshot of some of Citi’s work on regulatory issues.
“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 in a timely manner,” a bank spokesperson said.
Reuters could not determine whether the violations have been remedied.
Regulation W, opens new tab was put in place by the Federal Reserve more than two decades ago. It aims to prevent depository institutions from incurring losses from their related entities, known as affiliates, for example by dumping bad assets onto the institution’s balance sheet or striking deals at preferential rates.
