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Enforcement
ACTION SURVEY
Regulators Issued Fewer AML Fines in 2014, But Packed a Bigger Punch
February 13, 2015 By Colby Adams, Kira Zalan and Irene Madongo
Sometimes a decline in bank enforcement
actions isnt a good thing, even for
bankers. Such is the takeaway of a review
of enforcement action data spanning
back five years, during which the number
of formal Bank Secrecy Act penalties fell
nearly 20 percent while fines and regulatory
demands grew.
In 2014, the U.S. Treasury Department,
Federal
Deposit
Insurance
Corp.
(FDIC) and Federal Reserve Board
issued 45 enforcement actions for
anti-money laundering (AML) infractions,
an 11 percent drop from the 2013
Annual
Enforcement
ACTION SURVEY
EMPHASIS ON CULTURE
With greater emphasis than in previous
years, regulators made it clear in speeches,
guidance and enforcement actions that
senior managers and boards of directors
must take responsibility for banks AML
efforts. More than ever, federal and state
regulators sought to penalize individuals
through fines and public disclosures.
Annual
Enforcement
ACTION SURVEY
KEY COMPONENTS
Many of last years enforcement actions
were predicated on shortcomings found
in each of the financial institutions three
lines of defense: business, compliance and
audit, according to Fred Curry, a principal
at Deloitte Financial Advisory Services LLP.
So what youre seeing is more and
more findings citing totally inadequate
compliance programs, which leads to
more severe enforcement actions, much
larger penalties, and much more expensive
program remediation requirements, said
Curry.
Examiners often asked about compliance
management
systems
and
audit
departments,
including
the
audit
component of compliance management
systems, according to Rowe.
Theyre looking at exactly how its
structured, what kind of systems they
have in place, the staffing that they have,
how often theyre reviewing policies and
procedures, how often theyre checking
their systems to make sure the monitoring
programs are doing what theyre supposed
to be doing, said Rowe. Its the entire
compliance program.
Regulators also made clear that the
enhanced due diligence (EDD) measures
banks implement for high-risk clients
IN TROUBLE, BEHIND-THE-SCENES
Not all of the trouble banks found
themselves in made it into press releases
and headlines in 2014. Compliance
consultants and bankers contacted for
this story said that, anecdotally, regulators
handed banks more matters requiring
attention, or MRAs, and matters requiring
immediate attention, or MRIAs.
Annual
Enforcement
ACTION SURVEY