Federal Reserve Board Enters Enforcement Action Against Texas Bank Regarding AML Violations
Recently, the Federal Reserve Board and a Texas bank mutually agreed to a consent order after an examination revealed the bank was not in compliance with several anti-money laundering (AML) laws, rules, and regulations. The order did not include any monetary penalty; the bank will have to bolster its compliance program and will be monitored by the Texas Department of Banking (Department).
The examination, performed by the Federal Reserve Bank of Dallas and the Department, revealed that the bank’s risk management and compliance systems were seriously insufficient and did not comply with the Bank Secrecy Act (BSA), the U.S. Dept. of the Treasury’s rules and regulations, and the Board of Governors of the Federal Reserve System’s Regulation H requirements. As part of the order, the Bank agreed to take several steps meant to increase compliance with the regulations and requirements.
The bank agreed to Department oversight and will create a plan for better oversight regarding compliance with AML requirements and the BSA. The bank must create a better AML/BSA compliance program to asses risk and to create internal controls for compliance, to include an autonomous compliance officer who will implement an effective compliance program. The plan must include ensuring that the compliance officer has adequate resources and ensuring adherence to the compliance policies, procedures, and standards. The agreement also includes provisions regarding customer due diligence and suspicious activity monitoring and reporting. The Bank must certify compliance with the order and provide an update within 30 days, as well as plans for the implementation of the programs.
