Bank Settles OCC Charges for AML Compliance Deficiencies

A bank entered into a Formal Agreement to remedy anti-money laundering deficiencies identified by the Office of the Comptroller of the Currency ("OCC"). 

As detailed in the Formal Agreement, the OCC found that the bank failed to (i) maintain adequate internal controls, (ii) report suspicious activities as required and (iii) properly collect and analyze customer information as part of its Customer Due Diligence program. The OCC found that the bank violated Customer Identification Program requirements by not adequately verifying the identity of new customers when opening accounts. Further, the OCC found that the bank failed to gather and verify beneficial ownership information for legal entity customers, leaving gaps for who controls those accounts. The OCC said the bank failed to properly file reports for large currency transactions, as mandated by law, and that it violated the "Travel Rule," which requires the inclusion of specific information in electronic fund transfers to trace potentially illicit funds.

As a result, the OCC determined that the bank violated 12 CFR 21.21(d)(1) ("Procedures for Monitoring Bank Secrecy Act Compliance")); 12 CFR 21.11(d) ("Reports of Suspicious Activities"); (31 CFR 1020.210(a)(2)(v) ("Anti-money laundering program requirements for banks"); and 31 C.F.R. § 1010.230(b)(2), (Beneficial Ownership Requirements: Identification and Verification"); 31 CFR 1010.313 ("Aggregation") and 31 CFR 1010.410(f)(1) ("Records").

The bank agreed to (i) cease and desist from further violations, (ii) implement corrective actions aimed at enhancing its internal AML controls, including improvements to customer identification and transaction monitoring processes and (iii) submit to ongoing regulatory oversight to ensure compliance with BSA/AML obligations. The agreement requires the bank to follow a rigorous action plan.