Fed Cites Money Laundering Failures At American Express; OCC Imposes $350-Million Fine
By CU Today Staff —
WASHINGTON—The Federal Reserve has issued an enforcement action against American Express for failing to adequately detect, investigate and report suspicious activity potentially related to money laundering, while the Office of the Comptroller of the Currency (OCC) has imposed a separate $350-million financial penalty against the company's national bank.
The Fed said its investigation and supervisory reviews uncovered significant weaknesses in American Express' companywide financial crimes risk management program, including deficiencies in transaction monitoring, fraud referrals, third-party risk assessments and oversight. The problems extended to American Express National Bank, which is separately regulated by the OCC.
Under the Fed's consent cease-and-desist order, American Express must submit corrective action plans within 90 days addressing board oversight, anti-money laundering compliance, suspicious activity reporting and sanctions screening. The company must also strengthen monitoring of transactions, customer due diligence and oversight of outside partners, including ATM networks. The order requires continuing cooperation in investigations of individuals involved in the misconduct.
The OCC said the bank's compliance failures resulted in approximately $13 billion in suspected trade-based money laundering activity going inadequately detected, evaluated or reported over the past decade. The regulator imposed a $350-million civil penalty, citing inadequate staffing expertise, weak internal controls and insufficient attention to risks involving the company's credit and charge card businesses. American Express consented to the Fed's order without admitting or denying the allegations.
Originally reported by CU Today.