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Massachusetts Sen. Elizabeth Warren is warning regulators that Citigroup (C) has become “too big to manage” and that federal regulators should enforce stricter restrictions on the bank.
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In a letter to Acting Comptroller of the Currency Michael Hsu, Warren stated that Citi has suffered with its risk management and operational controls, along with many other management crises, according to Reuters.
“According to your own framework, it is clearly time to protect the American financial system by imposing growth restrictions on Citi,” Warren wrote in the letter, per Reuters.
On Tuesday, the Federal Reserve announced that it had ended its decade-old enforcement action it filed against Citigroup in 2013, regarding the firm’s anti-money laundering policies. The action was originally filed against Citi and its Banamex Financial Group subsidiary.
Citi declined a request for comment from Quartz.
This isn’t the first time Citigroup has found itself in a tough situation with lawmakers, in June, federal regulators found a weakness, known as a “shortcoming,” in four banks’ plans – including Citi, which raised questions about the feasibility of their living will plans that were submitted in 2023.
In Citi’s case, the FDIC found that the bank’s plan had a more severe weakness, known as a “deficiency,” meaning that the agency believed the plan was not credible or would not result in an orderly resolution under the U.S. Bankruptcy Code.
In October 2020, the Federal Reserve and the OCC fined Citi about $400 million in penalties – which the company agreed to pay and ordered the bank to craft a plan elaborating on its goals for improving its operational issues.
Warren, who has long criticized the actions of large banks, such as JP Morgan (JPM), Bank of America (BAC), and Wells Fargo (WFC) – says banks need to have tougher pushback from regulators and federal agencies.
