Bank Penalized More Than $600 million for BSA Violations

• February 16, 2018
• CLA Regulatory Compliance Team

It was announced on February 15^th that U.S. Bank received more than $600 million in civil money penalties for violating the Bank Secrecy Act (BSA). The civil money penalties were issued by the Office of the Comptroller of the Currency, Federal Reserve, Department of Justice, Financial Crimes Enforcement Network, and U.S. Attorney’s Office of the Southern District of New York. Since 2011, the regulators found that U.S. Bank had an inadequate BSA and Anti-Money Laundering (AML) program and consequently failed to report suspicious activity and currency transactions. In particular, U.S. Bank capped the number of alerts in its automated transaction monitoring system so that it would generate only a predetermined number of transactions for deeper investigation, instead of looking at all of the legitimate alerts that could have been generated but for the cap. U.S. Bank’s AML staff warned the bank about the dangers of capping alerts, but according to the regulators, these warning were ignored. In addition, the bank filed more than 5,000 Currency Transaction Reports with incomplete or inaccurate information. The bank also had ineffective procedures for handling high-risk customers, and was unable to properly analyze and report on the risks of its customer base and file all required suspicious activity reports.

CLA consultants and internal auditors provide guidance designed to help financial institutions comply with BSA and AML requirements . Please contact me if your institution would like assistance.

 

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