By Christina Rexrode
Citigroup Inc. on Wednesday confirmed that it will close Banamex USA, a small unit doing business on the U.S.-Mexico border, and agreed to pay $140 million to regulators who accused the unit of shoddy anti-money-laundering controls.
The settlement is with the Federal Deposit Insurance Corp. and the California Department of Business Oversight, which had previously accused Banamex USA of poor oversight of its systems meant to prevent money laundering.
The Wall Street Journal previously reported that Citigroup was expected to shut the unit. In a statement, the bank said that Banamex USA hadn't generated consistent earnings and that winding it down was part of the bank's overall mission of becoming smaller and simpler.
Regulators, concerned about the bank's ability to catch money laundering, first told Citigroup to beef up its staff and systems at Banamex USA in 2012. Since then, Citigroup brought in consultants, ousted Banamex USA's chief executive and a top deputy and closed some branches. But regulators said Wednesday that the bank hadn't done enough to meet regulators' requests.
Banamex USA is based in Century City, Calif., and has branches in San Antonio and Houston.
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