Regulators found weaknesses in "living wills" submitted by four of the country’s largest banks detailing how the lenders would wind themselves down if something catastrophic were to happen.

The Federal Reserve and Federal Deposit Insurance Corporation determined that there was a "shortcoming" in the plans submitted in 2023 by JPMorgan Chase (JPM), Bank of America (BAC), Goldman Sachs (GS), and Citigroup (C).

A shortcoming, according to the agencies, is a weakness that raises questions about the feasibility of the plan.

Where the two regulators disagreed was concerning the severity of weakness in the plan submitted by Citigroup.

The FDIC said it found the bank’s plan weak enough to be considered a more serious "deficiency," while the Fed stuck with the less severe "shortcoming" rating.

The banks must tell regulators by September how they plan to fix their weaknesses, and they must also address the shortcomings in their next resolution plans due July 1, 2025.

Regulators didn’t identify material weakness in the plans submitted by other large banks, including Wells Fargo (WFC), Bank of New York Mellon (BK), State Street (STT), and Morgan Stanley (MS).

Living wills emerged in the aftermath of the 2008 financial crisis, when a housing meltdown and the unraveling of Lehman Brothers triggered chaos across the financial system, taxpayer bailouts for giant financial institutions, and a cascading series of bank failures.

The Dodd-Frank legislation passed in 2010 made it a requirement for banks of a certain size to put together these plans on a regular basis, showing how they could be wound down in the event of a crisis without putting the greater financial system at risk.

The shortcomings in the 2023 plans from JPMorgan, Bank of America, Goldman, and Citigroup happened when they were asked to simulate an unwind of their derivatives and trading positions in two scenarios with different time frames.

In the case of Citigroup, regulators said the weakness had to do with a shortcoming identified in its 2021 plan "regarding resolution data integrity and data management issues."

"The agencies have significant concerns with the amount of time that will be necessary to remediate the significant resolution data integrity weaknesses."

In a closed meeting Thursday on the topic, the FDIC's vice chairman Travis Hill voted against the board majority's decision to give Citi a deficiency rating, finding the weakness in Citi's plan not as severe.

"The institution is in the midst of a multiyear process to address these underlying issues, which the firm’s management has prioritized," Hill said in a statement Friday.