New York Citi issued the following statement today on Banamex USA’s (BUSA) settlement with the Federal Deposit Insurance Corporation (FDIC) and California’s Department of Business Oversight (DBO) over identified deficiencies in BUSA’s Bank Secrecy Act/Anti-Money Laundering (BSA/AML) program. The settlement includes a payment of a civil monetary penalty of $140 million, which was previously fully reserved.
“Ensuring a strong and sustainable BSA/AML Compliance Program is an ongoing mission. Citi is committed to devoting the resources and expertise needed to continuously execute a robust and comprehensive program that helps protect the integrity of the financial system.
“BUSA has not been able to operate to the scale necessary to generate consistent quality earnings. Therefore, in line with Citi’s simplification of its business model, the BUSA Board of Directors, in consultation with management, has decided to wind down banking operations at BUSA, subject to a satisfactory liquidation plan. This will be an ongoing and orderly process as BUSA exits retail and commercial business lines.
“Throughout the wind down, we will remain focused on three priorities: continuing to remediate BSA/AML and other issues identified in the FDIC/DBO Consent Order; delivering excellent service to customers; and working with impacted employees and assisting them in pursuing opportunities both inside and outside of Citi.”
BUSA is an indirect wholly-owned subsidiary of Citi and an affiliate of Banco Nacional de Mexico (Banamex). Citi acquired BUSA when it purchased Banamex in August 2001. BUSA, then named California Commerce Bank, was a subsidiary of Banamex.
BUSA maintains three branches in California and Texas and has approximately 300 full-time employees with assets of just over $850 million and a deposit base of approximately $460 million. BUSA intends to close the Houston and San Antonio branches in October of this year. The Los Angeles branch will remain open through the wind down process.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
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