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Financial Services Law Insights and Observations

Federal Reserve issues enforcement action against Texas bank for BSA/AML compliance issues

Financial Crimes Federal Reserve Anti-Money Laundering Bank Compliance Bank Secrecy Act

Financial Crimes

On January 8, the Federal Reserve Board announced an enforcement action against a Texas bank for alleged weaknesses in its anti-money laundering risk management and compliance programs, including failure to comply with applicable rules and regulations, such as the Bank Secrecy Act. Under the terms of the order, the bank is required to (i) develop and implement a written plan to strengthen the board of directors’ oversight of Bank Secrecy Act/anti-money laundering (BSA/AML) compliance; (ii) submit an enhanced written compliance program that complies with BSA/AML requirements; (iii) ensure the bank provides effective training for all personnel related to BSA/AML compliance responsibilities; (iv) submit an enhanced, written customer due diligence plan; (v) submit a program to ensure compliant, timely, and accurate suspicious activity monitoring and reporting; (vi) retain an independent third party to ensure the effectiveness of the bank’s transaction monitoring system; and (vii) submit a written plan for independent testing of the bank’s compliance with all applicable BSA/AML requirements. A civil money penalty was not assessed against the bank.

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