Latest Products

Bancorp to pay over US$600 million in fines

Monday 19 February 2018

Financial Crime 

The US Bank National Association of Cincinnati and Ohio (Bancorp) has agreed to pay US$613 million (approximately AUD$772 million) in penalties for violating the Bank Secrecy Act (BSA), and for a ‘faulty’ AML program, according to the American Banker.

That is more than twice the amount of the AUD$375 million CBA has set aside to pay for their own contraventions of the Australian AML/CTF regime.

The enforcement action against Bancorp is being undertaken concurrently by the Office of the Comptroller of the Currency (OCC), the Department of Justice (DOJ), and the Board of Governors of the Federal Reserve System.

American Banker also reported the news seemed to come as little surprise to Bancorp, since the bank had already set aside US$600 million to pay for the ‘expected enforcement action’.

Last week, the OCC announced an additional fine of US$75 million (approximately AUD$94 million) for failing meet AML requirements and—in collaboration with the Financial Crimes Enforcement Network (FinCen)—for wilful violation of the BSA.

A statement from the OCC indicated these failures were connected to the consent order issued against Bancorp in 2015. The consent order required the bank to improve its compliance and risk management processes.

The Federal Reserve Board ordered Bancorp to improve their risk management and the compliance of their subsidiaries:

The Board also required US Bancorp to ensure that firm personnel make timely and complete disclosures to regulatory authorities and imposed a $15 million [approximately AUD$19 million] penalty.

In a separate action, the DOJ announced a deferred prosecution agreement, a ‘forfeiture’ US$528 million (approximately $AUD 665 million).

These actions, undertaken by American regulators, clearly illustrate that organisations, both on a local and international level, must ensure they meet risk and compliance regulatory expectations.