American Express National Bank fined $350m by OCC over AML controls

American Express was fined $350m by US regulators for insufficient anti-money laundering (AML) controls.

The Office of the Comptroller of the Currency (OCC) announced the civil money penalty against the company’s banking arm- American Express National Bank in Sandy, Utah.

The bureau also issued a cease-and-desist order, citing deficiencies in the bank’s Bank Secrecy Act (BSA) and AML compliance programme.

The OCC said its actions were coordinated with a concurrent cease-and-desist order issued by the Board of Governors of the Federal Reserve System against American Express Company and American Express Travel Related Services Company.

The penalty assessed will be directed to the US Treasury.

According to the bureau, the bank did not “establish and maintain” a BSA/AML compliance programme to ensure compliance with the BSA and its implementing regulations.

The agency said shortcomings included inadequate resources, staff without sufficient expertise, internal control gaps, weak independent testing, and weak BSA/AML training for employees and directors.

The OCC further said the bank did not tailor its BSA/AML risk assessment to its business activities.

The regulator stated that the bank focused on risks tied to its demand deposit account products and services, while paying insufficient attention to risks linked to its credit and charge card products.

Further, the agency added that weaknesses in the bank’s risk assessments, customer due diligence processes, and customer identification programme procedures contributed to monitoring and reporting failures.

The OCC added the bank recorded breakdowns in suspicious activity monitoring and reporting processes. This resulted in a failure to identify, assess and sufficiently report around “$13bn of suspected trade-based money laundering activity” over the past decade, the statement said.

Comptroller of the Currency Jonathan Gould said: “The OCC expects banks of American Express’s size and complexity to devote sufficient resources to ensure compliance with laws and regulations designed to detect and prevent money laundering, which are critical to both economic and national security.

“American Express failed to maintain a BSA/AML compliance program properly aligned with the money laundering risks of its operations, which resulted in the bank’s failures to timely identify and report significant missed suspicious activity and to provide important information to law enforcement. Today’s actions will serve to focus American Express on properly addressing such risks as it continues to serve its customers.”

Meanwhile, Reuters said American Express did not admit or deny the regulators’ findings.