The Office of the Comptroller of the Currency assessed a civil money penalty of $65 million against City National Bank on 31 January 2024, simultaneously issuing a Cease and Desist Order requiring the Los Angeles-based institution to implement corrective actions across multiple areas of its operations. The penalty is payable to the United States Treasury. It reflects what the regulator described as systemic deficiencies at the bank, which the cease-and-desist order requires the bank to address across its strategic plan and four areas of risk management and investment practice.
City National Bank is a subsidiary of Royal Bank of Canada and operates primarily as a private and commercial bank serving high-net-worth individuals, businesses and entertainment industry clients in the United States.
SYSTEMIC DEFICIENCIES ACROSS FOUR RISK CATEGORIES
The OCC found systemic deficiencies in the bank's risk management and internal controls; its cease-and-desist order requires corrective action on the bank's strategic plan and in four areas: operational risk management, compliance risk management (including BSA/AML and fair lending), strategic risk management and investment management practices.
City National was also found to have violated the Bank Secrecy Act and 12 CFR Part 9, the regulation governing national bank fiduciary activities; separately, the OCC had previously entered into an agreement requiring the bank to comply with Gramm-Leach-Bliley Act requirements for financial subsidiaries. The OCC also found the bank had failed to comply with its Heightened Standards guidelines (12 CFR Part 30, Appendix D) — a set of enhanced supervisory expectations applied to large and complex national banks.
CEASE AND DESIST ORDER
The Cease and Desist Order issued alongside the $65 million penalty sets out a programme of required corrective actions that City National must implement under OCC oversight.