WASHINGTON — The Office of the Comptroller of the Currency has fined the Los Angeles-based City National Bank $65 million after it found that the firm had systemic deficiencies in its risk management practices and engaged in unsafe or unsound practices.
The OCC — the primary supervisor for nationally chartered banks — issued a consent order Wednesday against the $93 billion-asset bank over concerns about its management of third-party risks, lack of robust internal controls, deficiencies in operational risk event reporting, and shortcomings in fraud risk management. While the bank did not confirm or deny the allegations, CNB agreed to take remedial actions to avoid further enforcement actions from its regulator.
"The OCC expressly reserves its right to assess civil money penalties or take other enforcement actions if the OCC determines that the bank has continued, or failed to correct, the practices and/or violations," the consent order
The OCC notice announcing the penalty
The OCC is requiring the bank to make wide-ranging changes. They include efforts to prevent money laundering, guard against lending discrimination, and manage potential conflicts of interest with respect to investment management and more.
Diana Rodriguez, chief communications officer at City National Bank reiterated in an email the firm's ongoing work to strengthen the bank's regulatory standing.
"City National, and our new executive management team, are committed to resolving the matters identified in the OCC's order as quickly as possible," she wrote. "Our focus will continue to be on both strengthening our infrastructure and systems to reflect a bank of our size and business model, while at the same time providing our clients with consistently outstanding banking products and services."
City National, renowned for its focus on wealth management and boasting high profile clientele in the city of angels, is a subsidiary of the Royal Bank of Canada since RBC
The order follows a challenging 2023 for CNB. In January 2023, City National entered into a consent order with the Justice Department that included a fine of $31 million over allegations that it failed to offer home loans to Black and Hispanic borrowers in Los Angeles County from 2017 to 2020. The order marked the largest redlining settlement in Justice Department history.
Then City National was hit hard by the sharp rise in interest rates that sparked the springtime banking crisis.
CNB reported a
The bank also
Industry veteran Howard Hammond
Kevin Wack contributed to this article.