Security & Fraud

MUFG Bank Enters Consent Order With OCC Over AML Compliance

MUFG Bank's Consent Order With OCC Over AML

MUFG Bank, a Japan-based institution, announced on Friday (Feb. 22) that it was entering into a consent order with the U.S. Office of the Comptroller of the Currency (OCC), over deficiencies that the OCC identified in the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program.

The OCC identified the deficiencies in the bank’s branches in New York, Los Angeles and Chicago. The office recently examined the branches for BSA/AML and Office of Foreign Assets Control (OFAC) sanctions compliance.

The consent order doesn’t specifically identify any illegal transactions or OFAC violations, and it doesn’t come with any monetary penalty.

MUFG Bank said the OCC recognized improvements the bank made to its U.S. branches in regard to BSA/AML compliance before the consent order, and that more improvements are forthcoming. The bank said it is committed to finishing the corrective measures set forth by the consent order, which will improve its BSA/AML compliance.

The bank added that one of the improvements it has made over the years to strengthen its compliance has been to establish a global financial crimes division based in New York, which oversees not only BSA/AML compliance, but all financial crime compliance. It also oversees OFAC sanctions compliance and anti-corruption compliance across all of MUFG Bank’s worldwide operations.

“MUFG Bank is committed to conducting business with the highest levels of integrity, and to continually improving its regulatory compliance,” the bank said.

On Wednesday (Feb. 20), it was reported that MUFG was testing blockchain technology to digitize the paper check. The bank is testing a proof of concept in Singapore, first announced last year, using the Monetary Authority of Singapore’s “regulatory sandbox,” reports explained.

“The project is to digitalize entire check processing — from issuing checks to clearing checks,” said MUFG Asian Systems Office General Manager Hirofumi Aihara. “From a bank’s perspective, we need to process these papers manually, including checking for fraud, etc.” Accelerated settlement times, he said, is just one argument for digitizing the paper check.

“Of course, we can digitalize checks without blockchain, but blockchain has very powerful features,” he said.

The executive pointed to the bank’s heightened security that can automate checking for check duplication and other areas of fraud associated with the paper check.


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