Senator Warren urges regulator ‘to apply four-step framework to Citi’

In a letter to the Office of the Comptroller of the Currency, Senator Elizabeth Warren said, “In August 2020, Citibank mistakenly wired $900M to Revlon, one of its borrowers, resulting in one of the ‘biggest blunders in banking history.’ According to press reports, Citi’s poorly designed payment software ‘almost encouraged bank personnel to make huge mistakes’ and contributed to the faulty transfer. You were responsible for supervising Citi in the fallout from that disaster, to ensure that it quickly remedied those failures, but you admitted in July 2024-over four years later-that Citi ‘failed to make sufficient and sustainable progress towards achieving compliance with the 2020 Consent Order.’ Despite your admission of Citi’s noncompliance… you refuse to take meaningful action to rein in this unruly bank. Last year, in a speech on large banks’ ‘too-big-to manage problem,’ you described a ‘four step escalation framework’ that the OCC would follow in cases where massive banks had ‘control failures, risk management breakdowns, and negative surprises (that) occur too frequently.’ You described the four steps: private warnings; public enforcement and fines; growth restrictions; and the breaking up of recidivist banks, and you vowed that the OCC would follow this framework. It is time to do so. I urge you to apply your four-step framework to Citi, which has proven itself to be too-big-to-manage by repeatedly failing to protect its customers and meet bank regulators’ standards.”