US Senator Elizabeth Warren has called on regulators to impose growth restrictions on Citigroup, citing ongoing issues with the bank's regulatory compliance.
In a letter to Acting Comptroller of the Currency Michael Hsu, Warren pointed to Citigroup’s prolonged struggles with risk management and operational controls as evidence that the bank has grown "too big to manage," Reuters reported Thursday.
While Warren's letter does not compel action, it adds pressure on regulators like Hsu to consider more serious steps, such as limiting Citigroup’s expansion or imposing an asset cap,
This wouldn't be the first time regulators put limits on a banking behemoth's growth. In early 2018, the Fed also ordered a cap on Wells Fargo's assets after it was blighted by revelations of unscrupulous and questionable practices. By one estimate, that had caused the financial institution to miss out on roughly $4 billion in profits by August 2020, though those regulatory chains could be set to come off by next year, according to one report by Barron's.
Warren's call for action is just the latest episode in the recent yearslong record of scrutiny overshadowing Citi. In 2020, both the Office of the Comptroller of the Currency and the Federal Reserve fined Citigroup $400 million and mandated reforms to address repeated compliance failures. Most recently in July, the OCC hit the bank with a $75 million civil penalty for its failure to resolve those same issues, which the Federal Reserve Board also cited as it handed down an additional $60 million fine against Citi.
Citigroup executives including CEO Jane Fraser, who was announced to take the role in 2020, have consistently expressed their commitment to rectifying the bank's regulatory problems. However, Warren argues that Citigroup’s persistent difficulties – including breaches of a Federal Reserve rule limiting intercompany transactions – warrant the enforcement of stronger measures.
Referring to a 2023 speech by Hsu, in which he discussed the potential for restricting growth or business activities as a way to compel compliance, Warren's letter emphasized the need for a stricter approach.
"According to your own framework, it is clearly time to protect the American financial system by imposing growth restrictions on Citi," she wrote.
By listening for what truly matters and where clients want to make a difference, advisors can avoid politics and help build more personal strategies.
JPMorgan and RBC have also welcomed ex-UBS advisors in Texas, while Steward Partners and SpirePoint make new additions in the Sun Belt.
Counsel representing Lisa Cook argued the president's pattern of publicly blasting the Fed calls the foundation for her firing into question.
The two firms violated the Advisers Act and Reg BI by making misleading statements and failing to disclose conflicts to retail and retirement plan investors, according to the regulator.
Elsewhere, two breakaway teams from Morgan Stanley and Merrill unite to form a $2 billion RIA, while a Texas-based independent merges with a Bay Area advisory practice.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
