Federal Reserve Board Announces BSA/AML Enforcement Action Against Bank Holding Company


On March 26, the Federal Reserve Board released a recent enforcement action against a bank holding company related to deficiencies in certain of its bank subsidiaries’ Bank Secrecy Act and anti-money laundering (BSA/AML) compliance programs, as reflected in 2012 orders from the OCC and the FDIC requiring the subsidiary banks to remedy certain BSA/AML compliance deficiencies. Nearly a year later, the Federal Reserve Board order charges that the holding company lacked effective systems of governance and internal controls to adequately oversee the activities of the banks with respect to legal, compliance, and reputational risk related to the banks’ respective BSA/AML compliance programs. The order requires the holding company to (i) submit a plan to continue to improve the governance, structure, and operations of its BSA/AML and OFAC regulations compliance risk management program; and (ii) complete a review of the effectiveness of its firmwide BSA/AML compliance program and prepare a report. In addition, the company’s board must (i) submit a written plan to continue ongoing enhancements to its oversight of the company’s firmwide BSA/AML compliance risk management program; (ii) review the above-referenced BSA/AML compliance program report and submit a plan with specific actions the company will take to continue to strengthen the management and oversight of its firmwide compliance program; and (iii) submit quarterly progress reports. The Federal Reserve Board order does not include a civil money penalty.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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