The Financial Crimes Enforcement Network (FinCEN) has announced a $185 million civil money penalty against U.S. Bank for what it said was failure to adhere to several provisions of the Bank Secrecy Act (BSA), according to the press release.

As part of standard compliance protocol, financial institutions are required to conduct certain checks and balances with their transactions and alert staff of any potentially suspicious activity. Since 2011, FinCEN maintains that U.S. Bank “willfully” ignored these requirements – failing to implement and establish adequate money laundering programs, report suspicious activity or adequately report currency transactions, according to the same release.

In a more specific account, FinCEN said that U.S. Bank capped the number of alerts its system would generate in response to suspicious activity. This means only a pre-determined number of transactions were actually reported for further investigation, while others would have been ignored due to the cap, it said.

FinCEN Director Kenneth A. Blanco responded via the same release: “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.”

The release from FinCEN also says that U.S. Bank:

  • Devoted inadequate resources to its AML program.
  • Failed to monitor non-customers conducting millions of dollars of questionable transactions at its branches.
  • Filed 5,000 Currency Transaction Reports with incomplete and inaccurate information
  • Maintained inadequate processes for monitoring high-risk customers.

Compliance is crucial to the success of your business and as a payment facilitator, there are certain practices you are required to employ. U.S Bank is the most recent company making headlines for compliance-related issues but certainly not the first. As previously reported, Western Union and Citibank have also been recently fined for failure to adhere to BSA and AML compliance requirements.

Onboarding, transaction monitoring and adequate response time to questionable activity are among the top responsibilities any payment facilitator must adhere to in order to maintain compliance. More information on these requirements can be found here.