FDIC and FinCEN Send Message Re: BSA and AML Compliance

November 27, 2012 at 1:20 pm Leave a comment

The Federal Deposit Insurance Corporation (FDIC) and the Financial Crimes Enforcement Network (FinCEN) recently announced an assessment of $15 million in civil money penalties against First Bank of Delaware for violations of the Bank Secrecy Act (BSA) and anti-money laundering (AML) laws and regulations.  As explained by the FDIC and FinCEN:

In taking these actions, the FDIC and FinCEN determined that the bank failed to implement an effective BSA/AML Compliance Program with internal controls reasonably designed to detect and report evidence of money laundering and other suspicious activity.  Specifically, the bank failed to adequately oversee third-party payment processor relationships and related products and services in a manner commensurate with associated risks.  The civil money penalty is the result of the bank’s history of noncompliance with laws and regulations and its numerous violations of the BSA.

Likely as a result of such significant civil money penalties, First Bank of Delaware sold certain of its assets and transferred its deposit liabilities to another institution and terminated its charter and FDIC deposit insurance earlier this month.

In its press release announcing the penalties, the FDIC reminded institutions that more information on BSA compliance with third party payment processors is available in the FDIC’s January 2012 and November 2008 guidance on payment processor relationships.  The FDIC also highlighted FinCEN’s recent advisory on the subject, “Risk Associated with Third Party Payment Processors.”

The FDIC press release is available here, the FDIC order is available here, and the FinCEN order is available here.

Entry filed under: Uncategorized.

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