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From Banking and Finance Law Daily, February 15, 2018

U.S. Bancorp agrees to Fed, OCC, DOJ, and FinCEN civil money penalties

By Nicole D. Prysby, J.D.

On Feb. 15, 2018, the Federal Reserve Board announced that it had fined Minneapolis-based U.S. Bancorp $15 million and ordered it to improve its risk management and oversight of its subsidiaries' compliance with U.S. economic sanctions and Bank Secrecy Act and anti-money-laundering requirements. Under the terms of the consent order executed on Feb. 14, U.S. Bancorp must strengthen its oversight of anti-money-laundering procedures and implement procedures for providing adequate and complete responses to examiner inquiries. Specifically, the consent order requires U.S. Bancorp to submit a written plan describing actions to be taken to strengthen its compliance program, create written policies to be distributed to all staff to ensure full cooperation with examiners, and submit enhanced customer due-diligence program requirements.

The Office of the Comptroller of the Currency also announced penalties against U.S. Bancorp subsidiary U.S. Bank National Association of Cincinnati, Ohio. The $75 million civil money penalty was assessed for the bank’s failure to adopt and implement an adequate BSA/AML compliance program. The OCC noted multiple deficiencies with the bank’s transaction monitoring systems, which resulted in monitoring gaps and the failure to report a significant amount of suspicious activity.

The Financial Crimes Enforcement Network also announced a $185 million penalty against U.S. Bank, for willful violations of the BSA beginning in 2011. The violations include failing to establish and implement an adequate anti-money-laundering program, failing to report suspicious activity, and failing to adequately report currency transactions. FinCEN stated that the bank manipulated its software to cap the number of suspicious activity alerts. U.S. Bank also failed to identify high-risk customers, failed to monitor millions of dollars of risky currency transfers at its branches through a large money transmitter, and filed over 5,000 Currency Transaction Reports with incomplete or inaccurate information.

In a separate action, the U.S. Department of Justice announced a deferred prosecution agreement against U.S. Bancorp, for BSA violations that occurred at U.S. Bank. The agreement provides for a $528 million forfeiture by U.S. Bancorp.

U.S. Bancorp announced that the enforcement actions against it by the Fed, OCC, DOJ, and FinCEN had been resolved and that it had worked over the past several years to improve its anti-money-laundering controls.

Companies: U.S. Bancorp; U.S. Bank National Association

MainStory: TopStory BankingOperations BankSecrecyAct CrimesOffenses DirectorsOfficersEmployers EnforcementActions FederalReserveSystem MinnesotaNews

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