American Express has been ordered to pay a $350 million penalty over what federal regulators described as “critical deficiencies” in its anti-money laundering controls.
The regulators said it missed about $13 billion in suspected activity over more than a decade.
The Office of the Comptroller of the Currency announced the civil penalty and a cease-and-desist order on Thursday against American Express National Bank, the Utah-based banking subsidiary of the credit-card company.
The Federal Reserve separately issued a concurrent enforcement action against parent company American Express and its subsidiaries, citing significant deficiencies in the company’s enterprise-wide anti-money-laundering compliance program.
According to the OCC, American Express National Bank failed to tailor its federally mandated anti-money laundering risk assessment to the way it actually did business.
The regulator said the bank focused too much on its “relatively narrow” demand deposit account products and services while not giving enough attention to the risks associated with its “more dominant” credit and charge card products.
The bank also experienced what the OCC described as “systemic breakdowns” in its processes for monitoring and reporting suspicious activity.
Those deficiencies led to failures to identify and report roughly $13 billion in suspected trade-based money-laundering activity, including card charges and repayments associated with those charges, according to the OCC.
Trade-based money laundering generally involves using commercial transactions to disguise the proceeds of crime or move illicit value, including through manipulating the price, quantity, or quality of goods involved in trade.
In some cases, the transactions involved accounts associated with bank insiders, according to the OCC.
