Citibank Fined $30 Million in Real-Estate Holding Rules Case -- 2nd Update

By Allison Prang 

A U.S. banking regulator has fined an arm of Citigroup Inc. $30 million, saying it violated holding period regulations on foreclosed real estate.

The U.S. Treasury Department's Office of the Comptroller of the Currency said Citibank in Sioux Falls, S.D., repeatedly violated the other real-estate owned statutory holding period because of "deficient processes and controls." Other real-estate owned refers to property that banks take following foreclosures or other borrower defaults. Citibank violated rules that set a maximum limit on how long banks are allowed to own a property.

The bank doesn't admit or deny wrongdoing, the OCC said in its order. The regulator said the bank has paid the fine.

"Since identifying the issue, we have strengthened controls, processes and procedures to ensure the timely disposition of these assets," a bank spokesman said in an emailed statement.

Citibank lacked the necessary policies and procedures to monitor its compliance with rules that govern how long banks can hold on to the property, according to the OCC order.

The OCC's consent order states that the bank violated the holding period more than 200 times over a two-year period that ended this past August. The bank, since 2015, has committed multiple times to fix its deficiencies, the OCC said.

The OCC continues to monitor the bank's efforts to strengthen its internal controls, it said.

--Kristin Broughton contributed to this article.

Write to Allison Prang at [e-mail]

(END) Dow Jones Newswires

October 11, 2019 17:50 ET (21:50 GMT)

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