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Financial Services Law Insights and Observations

FDIC releases November enforcement actions

Federal Issues FDIC Enforcement Bank Secrecy Act Bank Compliance FinCEN Customer Due Diligence

Federal Issues

On December 27, the FDIC announced a list of administrative enforcement actions taken against banks and individuals in November. The 14 orders include “two consent orders; one civil money penalty; one order terminating consent order; one supervisory prompt corrective directive action; five section 19 orders (prohibiting persons who have been convicted of any criminal offense involving dishonesty, breach of trust, or money laundering from serving as institution-affiliated parties with respect to an insured depository institution); two removal and prohibition orders; and two orders terminating prompt supervisory corrective action directives.” In one action, the FDIC issued a consent order against an Illinois-based bank related to alleged weaknesses in its Bank Secrecy Act (BSA) compliance program. Among other things, the bank is ordered to (i) implement a revised, written BSA compliance program to address BSA and FinCEN regulation provisions, such as suspicious activity reporting, customer due diligence, and beneficial ownership; (ii) update its Customer Due Diligence Program to assure the reasonable detection of suspicious activity; (iii) implement a process for account transaction monitoring; (iv) retain qualified BSA management to ensure compliance with applicable laws and regulations; (v) implement a comprehensive BSA training program for appropriate personnel; (vi) address automated clearing house (ACH) activity and update policies and procedures to monitor credit risk associated with ACH transactions; and (vii) refrain from entering into any new lines of business prior to conducting appropriate due diligence.

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