RBC’s US subsidiary City National Bank hit with $65m fine from OCC
The US Office of the Comptroller of the Currency (OCC) has imposed a $65 million fine on City National Bank, the US subsidiary of Royal Bank of Canada (RBC), for “systemic deficiencies in the bank’s risk management and internal controls”.
The regulator claims that the bank “engaged in unsafe or unsound practices” and failed to “establish effective risk management and internal controls”.
On top of its penalty, which is to be paid to the US Treasury, the OCC has also ordered the bank to initiate “broad and comprehensive corrective actions” in regard to its strategic plan and operational risk management.
The OCC says the cease-and-desist order requires the bank to improve its “internal controls; compliance risk management, including BSA/anti-money laundering and fair lending; strategic risk management; and investment management practices”.
Speaking to FinTech Futures, a City National Bank spokesperson says that, supported by its “new executive management team”, the firm is “committed to resolving the matters identified in the OCC’s order as quickly as possible”, with a particular focus on “strengthening our infrastructure and systems to reflect a bank of our size and business model”.
The OCC’s actions come after RBC invested close to $2.95 billion into Los Angeles-based City National Bank throughout last year.
RBC first acquired the bank, which operates as a commercial and private bank with a focus on serving high-net-worth individuals, for $5.4 billion back in 2015.