“The deficiencies, cited in the OCC’s 2015 order against the bank, included weaknesses in its compliance program and related controls; deficiencies in its risk assessment, remote deposit capture and correspondent banking processes; and failing to file suspicious activity reports. In assessing this civil money penalty, the agency found that the bank failed to achieve timely compliance with the OCC’s 2015 order, as required,” the regulator explained in a press release.
It added that Capital One has already paid the fine to the U.S. Treasury.
Capital One isn’t the first bank to be slapped with a fine over the Bank Secrecy Act. In February, U.S. Bank was hit with a $185 million civil penalty for what the Financial Crimes Enforcement Network (FinCEN), in coordination with the OCC and the U.S. Department of Justice (DOJ), said were violations of the legislation.
“U.S. Bank is being penalized for willfully violating the Bank Secrecy Act and failing to address and report suspicious activity. U.S. Bank chose to manipulate their software to cap the number of suspicious activity alerts rather than to increase capacity to comply with anti-money laundering laws,” said FinCEN Director Kenneth A. Blanco at the time. “U.S. Bank’s own anti-money laundering staff warned against the risk of this alerts-capping strategy, but these warnings were ignored by management. U.S. Bank failed in its duty to protect our financial system against money laundering and [to] provide law enforcement with valuable information.”
And last year the OCC warned that banks were at a high risk of non-compliance, with Bank Secrecy Act and Anti-Money Laundering compliance risk being especially high as new technologies that support open access to financial services may expose a bank to money laundering risk. Electronic and alternative payment systems mean less transparency for the FI and, therefore, a diminished ability to identify whether a transaction is occurring for the purpose of money laundering or terrorist financing.
“Moreover,” the report continued, “ongoing changes in payment technologies and criminal typologies increase the challenges for banks to maintain effective systems to keep pace with these changes.”