The U.S. Treasury Department is more inclined toward Citigroup's plan to repay than the Federal Deposit Insurance Corp, which has consistently been critical of Citi's capital position, said the person, who spoke anonymously because the talks are private.
The FDIC has been actively involved in Citigroup's business decisions because of the agency's exposure to the major bank. The FDIC has backed the bank's debt issuances, insures its customer deposits, and agreed to insure against losses on about $300 billion in assets.
FDIC Chairman Sheila Bair said last week that regulators must be very careful in how they approach repayments from the Troubled Asset Relief Program (TARP) because big banks will not be bailed out again, should conditions worsen.
(Reporting by Karey Wutkowski, with additional reporting by Dan Wilchins, editing by Gerald E. McCormick)