Regulators Issue Consent Orders and $350 Million Penalty
On Thursday, October 8, consent orders were announced by the Office of the Comptroller of the Currency and the Federal Reserve Board involving American Express and certain subsidiaries. Against American Express National Bank, the OCC levied a $350 million civil money penalty and a cease-and-desist order, citing the bank's inability to build and keep a sufficient Bank Secrecy Act and anti-money laundering compliance program. Separately, the Fed took enforcement action against American Express Company over inadequate detection and reporting of suspicious money laundering activity and weak implementation of its enterprisewide AML program. The Fed's order names American Express Company and American Express Travel Related Services Company.[S1][S2][S3][S4][S5][S6][S7][S8]
According to the OCC, the problems it identified included too few resources devoted to the compliance program, a risk assessment that was not adapted to the bank's actual business activities, and broad failures across the systems used to monitor and report suspicious activity. Jonathan Gould, the Comptroller of the Currency, stated that institutions as large and complex as American Express are expected to commit adequate resources to following laws and rules meant to catch and stop money laundering, which he described as essential to economic and national security.[S1]
American Express Response and Commitment to Remediation
In a press release, American Express noted that regulators' examinations of the company had already been made public. Chairman and CEO Stephen J. Squeri said in a statement that the company has spent recent years cooperating with regulators to improve its controls and with law enforcement to share details of transactions in which people misused its products. Squeri added that although meaningful progress has been achieved, additional work remains, and the company will keep cooperating with regulators and law enforcement while further developing a strong and effective Financial Crimes Compliance program.[S1]
