FinCEN and OCC Fine Texas Bank $9 Million for BSA-AML Violations

A Texas community bank was fined by the Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency (OCC) for BSA-AML violations.

As per the consent order from the OCC, a $1 million civil monetary penalty was issued due to the bank’s failure to implement an internal control system to ensure compliance with the Bank Secrecy Act. As a result, the bank was found to violate the 12 C.F.R and 21.21(d)(1) of the BSA.

The bank also failed to investigate and determine suspicious activities related to financial crime and violated suspicious activity reporting requirements under 12 C.F.R and 21.11. According to these requirements, financial institutions must inform FinCEN of suspicious activities involving insiders or transactions that exceed a specific threshold.

Between June 2016 and June 2021, the OCC alleged that the bank did not report suspicious activity reports of approximately $100 million of suspicious transactions. At the same time, FinCEN also issued an $8 million civil money penalty for the same violations between 2015 and 2019.

The FinCEN consent order is more detailed regarding the violations, where the bank was caused to “willfully” fail in reporting at least 17 suspicious activity reports (SARs). The missed SARs were meant to cover at least three groups of the bank’s customers who were previously charged for financial crimes with transactions involving their accounts at the bank.

Based on the order from FinCEN, the bank’s understaffed AML department had failed to sufficiently investigate the suspicious activities. Moreover, the bank also failed to update their customer due diligence (CDD) questionnaires when required.

In violation of the bank’s policies, the AML staff obtained the CDD information from the account officers rather than the customers. Even when suspicious activity reports were filed, there were no further investigations into the cases. 

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