According to Citigroup, the deficiencies were identified in BUSA’s bank secrecy act/anti-money laundering (BSA/AML) program.
The decision will result in the closure of BUSA’s Houston and San Antonio branches in October 2015, while the Los Angeles branch is expected to remain open through the wind down process.
Citigroup said in a statement: "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, an affiliate of Banco Nacional de Mexico (Banamex), could not operate as per the required scale to generate consistent quality earnings.
Citigroup said that its unit will quit retail and commercial business lines and the plan will be an ongoing and orderly process.
Citigroup purchased BUSA when it bought Banamex in August 2001. At that time BUSA was named as California Commerce Bank.
With three branches in California and Texas, BUSA has assets of over $500m and a deposit base of about $460m.
