Citi to shut Banamex USA, pay $140 million fine

Citigroup Inc said it would shut its Banamex USA operations and pay $140 million to regulators who alleged the bank did not correct weaknesses they had found in 2012 in its anti-money laundering programs.

The fine, imposed by the Federal Deposit Insurance Corp, includes $40 million in civil penalties to be paid to California’s Department of Business Oversight.

“Banamex agreed three years ago to correct numerous weaknesses in its anti-money laundering program. It has failed to do so,” Jan Lynn Owen, commissioner of the California authority said in a statement on Wednesday.

California-based Banamex USA is an affiliate of Banco Nacional de Mexico (Banamex), which Citigroup bought in August 2001. Banamex USA had $1.5 billion of assets at the end of 2012, and at one point as many as 11 branches, eight of which were closed in 2013.

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

A federal grand jury and the U.S. Attorney’s office in Massachusetts have also been investigating the Banamex USA’s compliance with anti-money laundering requirements and the Bank Secrecy Act, Citigroup has previously disclosed.

A bank spokeswoman declined to comment on the status of that criminal investigation. The bank previously said it was cooperating with that probe and with the FDIC and California investigations.

Citigroup said it a statement on Wednesday that it will liquidate Banamex USA, which now has three branches, 300 full-time employees and $500 million of assets.

“Banamex USA has not been able to operate to the scale necessary to generate consistent quality earnings,” Citigroup said. Closing Banamex fits with Citigroup’s drive to simplify its business model, the statement said.

Mexico City-based Banamex embarrassed Citigroup last year when it lost more than $500 million on fraudulent loans to a supplier to the state-owned oil company.

Wednesday’s settlement comes a day after Citi’s consumer bank was ordered by the U.S. Consumer Financial Protection Bureau to pay $770 million for illegal credit card practices.

Citigroup said it had set aside reserves to cover the Banamex USA and credit card settlements.

Citi shares were up 2.39 percent at $60.45 in afternoon trading on the New York Stock Exchange.

(Reporting by Richa Naidu and Anil D’Silva in Bengaluru and David Henry in New York. Additional reporting by Jim Christie in San Francisco.; Editing by Chizu Nomiyama and Kirti Pandey)

 



Trending News on PVDN

  • Two More Puerto Vallarta Beaches Are Awarded Blue FlagsTwo More Puerto Vallarta Beaches Are Awarded Blue Flags Puerto Vallarta (PVDN) - In the upcoming 2023-2024 season, Puerto Vallarta is set to host six beaches awarded with the Blue Flag accreditation, an esteemed international recognition for high environmental and quality standards. The Blue Flag committee has reconfirmed the status for four previously certified beaches while conferring this prestigious title to two new beaches…
  • Tactical Groups Are Added to the Streets and Beaches of Puerto VallartaTactical Groups Are Added to the Streets and Beaches of Puerto Vallarta Puerto Vallarta (PVDN) - As a component of the safety strategies initiated at the Citizen Security Police Station, members from the Tactical Operations Group (GOT) have been bolstering street patrols all over Puerto Vallarta. Following directives from Commissioner Rigoberto Flores Parra and Mayor Luis Alberto Michel Rodríguez, these officers ensure a visible and protective presence…
  • Popocatépetl Volcano Resumes Activity; Authorities Maintain Alert StatusPopocatépetl Volcano Resumes Activity; Authorities Maintain Alert Status PUERTO VALLARTA (PVDN) - After a period of relative calm last week, Mexico's Popocatépetl volcano resumed minor activity on Friday night and through Saturday night, as reported by the National Civil Protection Coordination (CNPC). This comes following significant explosions last weekend that put nearby communities on high alert. The resumed activity was characterized by minor…
  • Puerto Vallarta Set to Celebrate 105th Anniversary as Municipality and 55th as a City with Grand FestivitiesPuerto Vallarta Set to Celebrate 105th Anniversary as Municipality and 55th as a City with Grand Festivities PUERTO VALLARTA - The coastal paradise of Puerto Vallarta is poised to celebrate two landmark anniversaries: the 105th anniversary of its recognition as a municipality and the 55th anniversary of its elevation to city status, with a grand commemoration on May 31, 2023. The celebrations have been meticulously planned by the municipal government led by…
  • Mothers Searching For Their Missing Children Uncover Presumed Clandesant Grave in Puerto VallartaMothers Searching For Their Missing Children Uncover Presumed Clandesant Grave in Puerto Vallarta PUERTO VALLARTA (PVDN) - A team of mothers seeking their missing children made a chilling discovery on the outskirts of Puerto Vallarta Saturday afternoon: a skeleton, fragments of bones, and several indications pointing towards a potential site of illegal body disposal. The area of discovery, located near the road to Viejo el Veladero, close to…
  • American Tourist In Critical Condition in Puerto Vallarta After Wave Breaks His NeckAmerican Tourist In Critical Condition in Puerto Vallarta After Wave Breaks His Neck Puerto Vallarta (PVDN) - "Experiencing your sibling in critical care, confessing your love to him, anticipating the worst... it's a nightmare no one should have to endure," shared Adam Griffis. Adam's younger brother, Evan, is struggling for survival in a medical facility located in Puerto Vallarta. The 30-year-old experienced a freak accident while swimming last…
  • Recent Protests Disrupt 40% of Puerto Vallarta’s EconomyRecent Protests Disrupt 40% of Puerto Vallarta’s Economy Puerto Vallarta (PVDN) - Tourism, a critical sector of Puerto Vallarta's economy, has been severely affected by protests, suffering both reputational damage and direct harm to visitors. Alejandro Torres Magaña, General Manager of the Puerto Vallarta Hotel and Motel Association, cited missed flights and hotel delays as significant issues.
  • Volcanic eruptions in Mexico and the dangers of fetishizing natural disastersVolcanic eruptions in Mexico and the dangers of fetishizing natural disasters Ash from the volcano has been falling heavily for a few weeks now, but Sunday was much worse. Nevertheless, many people still had to work outside all day, despite the hazards. The fish and vegetable street vendors were working, a woman was pacing up and down my street selling flower bouquets, the pizza and taco…
  • Puerto Vallarta News Brief with Felipe Alvarez for May 26, 2023Puerto Vallarta News Brief with Felipe Alvarez for May 26, 2023 Puerto Vallarta (PVDN) - The Puerto Vallarta News Brief covers the top trending stories of the week on Vallarta Daily News and is hosted by Felipe Alvarez.
  • Mexico's Vacation Rental Boom is in Full Swing and Puerto Vallarta Isn't Left OutMexico’s Vacation Rental Boom is in Full Swing and Puerto Vallarta Isn’t Left Out Puerto Vallarta (PVDN) - The vacation rental industry in Mexico is currently thriving, marking an unparalleled period of success. From January to March 2023, INEGI recorded an impressive influx of nearly 18.8 million international visitors. This figure represents an increase of 3.87 million visitors or 25.9% when compared to the corresponding period in 2022. During…

Compare Listings

Title Price Status Type Area Purpose Bedrooms Bathrooms