Morning Money Memo…

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The Federal Reserve delivered a surprising blow to Citigroup, saying the giant bank cannot reward investors with stock buybacks and dividends. Citi failed a stress test for the second time in three years. The Fed says the U.S. banking industry is better able to withstand a severe recession than at any time since the 2008 financial crisis. Twenty-five big banks passed the annual stress tests. JP Morgan Chase and Bank of America were among them. Both large banks increased stock dividends for investors. Five large banks - including Citi - failed the tests. Citigroup shares are down nearly 5 percent since the Fed's announcement. "Needless to say, we are deeply disappointed by the Fed's decision regarding the additional capital actions we requested," said CEO Michael Corbat in a statement.

Ronald McDonald is loving it at Taco Bell. In a new tongue-in-cheek ad campaign, the fast food chain found a bunch of men who share the name with the McDonald's mascot to promote its brand new breakfast menu. Taco Bell is looking to boost sales by opening most of its 6,000 U.S. restaurants at 7 each morning, starting this week. The Mexican food chain got some real-life Ronald McDonalds to appear in new ads. The TV spots "are a blatant poke at McDonald's, the biggest player in breakfast by a wide margin," says AdAge. "It's not surprising these guys are loving Taco Bell's new Waffle Taco," says the voice-over in one ad. "What is surprising is who they are." Then the host of Ronald McDonalds introduce themselves. The men show their approval of the food with comments like, "It's not messy" and "Mmm, wow" and "Mmm, real good" and "It has everything I like." The spots include a disclaimer that the Ronald McDonalds in the spots are not affiliated with McDonald's and were picked as paid endorsers of Taco Bell.

Bank of America and its former CEO Ken Lewis have reached a $25 million deal to settle allegations that investors were misled about the impact of BofA's 2008 merger with Merrill Lynch. The settlement, announced by New York Attorney General Eric Schneiderman, also bars Lewis from serving as an officer or director of any public company for three years. BofA bought Merrill in September 2008 at the height of the financial crisis. The bank was seen as a savior of Merrill, which would have likely filed for bankruptcy. But by the time the deal was finalized in January 2009, Merrill's balance sheet had deteriorated to the point that BofA needed a taxpayer-funded bailout.

A senior executive at Target says the retailer is taking a hard look at security across its network and is strengthening its anti-virus tools. This follows the massive data breach before Christmas. But Chief Financial Officer John Mulligan offered a Senate panel few details as to how the breach happened.

Topeka, Kansas has a pretty sweet deal thanks to America's love for chocolate. Mars is throwing a big opening today for a brand new candy plant in Kansas. The site will produce millions of chocolate bars and other sweets every day.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow