American Express Fined $350mn for BSA/AML Deficiencies

Last week, the US Office of the Comptroller of the Currency (OCC) issued a cease-and-desist order and assessed a $350 million civil money penalty against American Express National Bank for deficiencies in its Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance program.

“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,” said Comptroller of the Currency Jonathan Gould. “American Express failed to maintain a BSA/AML compliance program properly aligned with the money laundering risks of its operations, which resulted in the bank’s failures to timely identify and report significant missed suspicious activity and to provide important information to law enforcement.”

The OCC found that the bank failed to maintain a BSA/AML program appropriately designed for the risks of its business. Deficiencies included inadequate staffing and expertise, systemic gaps in internal controls, weak independent testing, and insufficient BSA/AML training for employees and directors. The regulator also said the bank’s risk assessment focused too heavily on its relatively limited deposit products and not enough on the risks associated with its much larger credit and charge card businesses.

According to the OCC, weaknesses in customer due diligence, customer identification, and suspicious activity monitoring contributed to broader reporting failures. Over the past decade, the bank failed to timely identify, evaluate, and sufficiently report approximately $13 billion in suspected trade-based money laundering activity.

The OCC coordinated its action with a concurrent cease-and-desist order issued by the Federal Reserve Board against American Express Company and American Express Travel Related Services Company. The $350 million penalty assessed by the OCC will be paid to the US Treasury.