Federal Reserve Board, New York DFS Issue Joint Enforcement Action against U.S. Branch of Foreign Bank

Federal Reserve Anti-Money Laundering Bank Secrecy Act

On April 4, the Federal Reserve Board released a March 25, 2013 written agreement between the Federal Reserve Board, the New York Department of Financial Services, and a German bank and its U.S. branch regarding certain BSA/AML deficiencies at the U.S. branch. The agreement requires that the bank and the branch retain within 30 days an independent consultant to conduct a comprehensive review of the branch’s compliance with BSA/AML rules and state regulations, and subsequently prepare a report of the findings. The agreement further requires that within 60 days of the compliance report prepared by the consultant, the bank and the branch (i) submit a written enhanced BSA/AML compliance program for the branch, (ii) submit a written plan to improve and enhance management oversight of the branch’s compliance program, (iii) submit a written program to improve customer due diligence and a written program to ensure timely and accurate SAR reporting, and (iv) engage a different independent testing consultant to develop a risk-based BSA/AML audit program and conduct an independent compliance test. In addition, the agreement requires the bank and the branch to submit within 60 days of the agreement a written plan to enhance compliance with OFAC requirements.