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Financial Services Law Insights and Observations

OCC releases recent enforcement actions

Federal Issues OCC Financial Crimes Bank Secrecy Act SARs Of Interest to Non-US Persons

Federal Issues

On November 19, the OCC released a list of recent enforcement actions taken against national banks, federal savings associations, and individuals currently and formerly affiliated with such entities. Included among the actions is an October 9 consent order to resolve the OCC’s claims that a Washington, D.C.-based branch of a Caribbean bank (bank) engaged in Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program violations. According to the consent order, the OCC identified “critical deficiencies” in certain elements of the bank’s BSA/AML compliance program, including failure to implement a compliance program that “adequately covered the required BSA/AML program elements,” and failure to timely file Suspicious Activity Reports (SARs). Among the compliance program failures, the consent order states that the bank had (i) “systemic deficiencies in its transaction monitoring systems and alert management processes, which resulted in monitoring gaps”; (ii) “systemic deficiencies in its customer due diligence, enhanced due diligence, and customer risk rating processes”; and (iii) “an inadequate system of internal controls, ineffective independent testing, a weak BSA Officer function, and insufficient staffing and training.” The consent order requires the bank to pay a $5 million civil money penalty as a result of the deficiencies.