Over the last few years, we have seen bank regulators increase the number of consent orders issued to large financial institutions. Consent orders are voluntary agreements between the bank and regulators to perform specific actions to remediate regulatory breaches. Failure to comply with consent orders can result in monetary punishment.
Two of the more interesting consent orders that have been announced recently were against TD Bank and Bank of America. TD Bank received a record-setting fine from FinCEN of $3 billion. The fines were related to deficiencies in the BSA/AML programs, suspicious activity reporting, and customer due diligence. It was noted that there was significant money laundering occurring by criminal groups using TD Bank systems. While Bank of America did not receive a fine for their consent order, they still are required to remediate actions related to their BSA compliance program and Sanctions compliance program.
I recently experienced the BOA consent order remediation when trying to open a checking account. The account was flagged and closed a week after being opened due to their inability to validate information in the account application. This was interesting to see, as I did not receive any notification that the account needed additional documentation. Luckily, I had not made any transactions or large deposits to the account. It looks like BOA still has some work to do with their customer due diligence program to ensure they are not auto-rejecting customers.
I put together a Risk and Control Assessment for these firms to leverage for their BSA/AML programs. This document can be leveraged for BSA/AML programs no matter the size. This RCM is BSA focused with emphasis on board governance, management responsibilities, and Internal Audit. With the increased scrutiny by regulators, would your institution benefit from a BSA/AML review?
Monitor Appointed in TD Bank $3 Billion Anti-Money-Laundering