Federal regulators have fined American Express National Bank $350 million, saying weaknesses in its anti-money laundering program kept it from promptly identifying, evaluating and adequately reporting about $13 billion in suspected trade-based money laundering activity over the past decade.
The Office of the Comptroller of the Currency also issued a cease-and-desist order against the Sandy, Utah-based bank.
The OCC said the bank failed to maintain a compliance program reasonably designed to meet the requirements of the Bank Secrecy Act and its regulations. The agency cited inadequate resources, staff without enough expertise, systemic internal control gaps, weak independent testing and poor training for employees and directors.
The bank also failed to tailor its risk assessments to its business, according to the OCC. Those assessments focused on its relatively narrow demand deposit account business and gave too little attention to its larger credit and charge card operations.
Those flawed assessments, along with weak customer due diligence and identification procedures, contributed to systemic breakdowns in how the bank monitored and reported suspicious activity, the agency said.
“The OCC expects banks of American Express’s size and complexity to devote sufficient resources to ensure compliance with laws and regulations designed to detect and prevent money laundering, which are critical to both economic and national security,”
Gould said the bank’s program was not properly aligned with the money laundering risks of its operations. As a result, he said, the bank failed to promptly identify and report significant suspicious activity and to provide important information to law enforcement.
“Today’s actions will serve to focus American Express on properly addressing such risks as it continues to serve its customers,” he said.
The OCC said it acted in coordination with the Federal Reserve Board, which issued a concurrent cease-and-desist order against American Express Company and American Express Travel Related Services Company, Inc.
The penalty will go to the U.S. Treasury.
