Citigroup to shut banking at Banamex USA

Banamex USA, a unit of the Citi's Mexican bank, has about 300 employees in three branches in California and Texas.
(Photo: Archive/EL UNIVERSAL)
22/07/2015
16:28
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Citigroup said it would shut banking operations at Banamex USA and that the unit was fined US$140 million by U.S. regulators over weaknesses in its anti-money laundering programs.

The fine by the Federal Deposit Insurance Corp includes US$40 million in civil penalties to California's Department of Business Oversight.

The payment will be the largest a bank has ever made to the California regulator, the state's Department of Oversight said in a statement on Wednesday.

The settlement resolves allegations that Banamex USA violated federal laws requiring banks to maintain adequate anti-money laundering programs, the California regulator said.

The news comes a day after Citi's consumer bank was ordered by the U.S. Consumer Financial Protection Bureau to pay $770 million over illegal credit card practices.

Citi said on Wednesday that the wind-down of retail and commercial banking at the unit was in line with plans to simplify its business model.

"Banamex USA has not been able to operate to the scale necessary to generate consistent quality earnings," the bank said in a statement.

Banamex USA, a unit of the Citi's Mexican bank, has about 300 employees in three branches in California and Texas. It has assets of just over US$500 million.

Citi said Banamex USA planned to close its Houston and San Antonio branches in October, while the Los Angeles branch would remain open through the process.

As of May 21, Citi had paid out over US$17 billion in fines and settlements since the financial crisis.

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