FDIC fines Apple Bank $12.5M for AML compliance failures

The FDIC “order to pay” against the New York-based financial institution, issued Dec. 21, 2020, was made public Jan. 29. According to the order, Apple Bank violated the BSA from April 2014 through September 2018 and further failed to comply “in a timely manner” with compliance requirements outlined in a December 2015 consent order.

The 2015 consent order cryptically describes how the FDIC ordered the bank to enhance its BSA anti-money laundering compliance program. Under Section 326.8 of the BSA, compliance programs must at a minimum provide for a system of internal controls to assure ongoing compliance; independent testing for compliance to be conducted by institution personnel or by an outside party; training for appropriate personnel; and designate an individual or individuals responsible for coordinating and monitoring day-to-day compliance.

The FDIC said the $12.5 million penalty was “appropriate” after considering the consent agreement, the bank’s “good faith,” and the “gravity of the violations” and “history of previous violations by the bank.” Asked for more details, an FDIC spokesperson said the agency does not comment on individual enforcement actions.

Apple Bank issued an equally cryptic response to the FDIC order. In a prepared statement, the bank said it is “committed to strong and transparent relationships with its regulators and has worked diligently and invested considerable resources to address the FDIC’s comments.” Based on remediation work and enhancements to its compliance program completed by the bank in September 2019, Apple Bank was released from the consent order on May 29, 2020.

Apple Bank added the FDIC has acknowledged its compliance enhancements but did not go into any specific detail about the remediation measures it has taken. Nor did Apple Bank admit or deny any violations of law.