American Express’s bank fined 350 million dollars over money-laundering controls
The Office of the Comptroller of the Currency, the federal regulator of national banks, imposed a 350 million dollars civil penalty on American Express National Bank and ordered it to fix its anti-money-laundering programme. The agency says weak controls kept about 13 billion dollars in suspected trade-based laundering from being reported properly over the past decade. In a coordinated step, the Federal Reserve issued a separate consent order against the card company.
Economics & Markets··Midday
OCC orders a 350 million dollars penalty against American Express’s bank
On 8 October the Office of the Comptroller of the Currency (OCC), the federal regulator that supervises national banks, imposed a 350 million dollars civil money penalty on American Express National Bank and issued a remedial order. In a coordinated step, the Federal Reserve issued a separate order against American Express and its travel-related services business.[1], [2]
The OCC says the bank, based in Sandy, Utah, did not establish and maintain a programme reasonably designed to assure and monitor compliance with the Bank Secrecy Act, the US anti-money-laundering law. The penalty is to be paid to the US Treasury.[1]
Staffing, internal controls and a risk assessment aimed at the wrong products
The OCC cites inadequate resources and staff expertise, systemic gaps in internal controls, weak independent testing and insufficient training for employees and directors. Customer identification and due-diligence procedures also contributed to the monitoring and reporting failures.[1]
Regulators found that the risk assessment was not tailored to the business: the bank concentrated on its relatively narrow demand-deposit products while giving too little attention to its dominant credit and charge-card operations.[1], [2]
About 13 billion dollars of suspected activity was not reported properly
According to the OCC, systemic breakdowns prevented the timely identification, evaluation and adequate reporting of approximately 13 billion dollars in suspected trade-based money-laundering activity over the past decade. Comptroller Jonathan Gould stressed that a bank needs resources consistent with its scale and complexity.[1]
The Federal Reserve’s consent order requires American Express to submit plans within 90 days for board oversight and enterprise-wide compliance improvements. Transaction monitoring, customer due diligence, suspicious-activity reporting and third-party oversight are among the areas covered. Approved plans must be implemented, with progress reported periodically. The companies signed the order without admitting or denying its allegations.[1]
