Bank of America (BofA) avoided a monetary penalty in agreeing to settle charges with the Treasury Department’s Office of the Comptroller of the Currency (OCC) but was ordered to shore up previously disclosed deficiencies in its Bank Secrecy Act/anti-money laundering (BSA/AML) and sanctions compliance programs.
The OCC said in a press release Monday that the deficiencies in BSA/AML and sanctions compliance specifically related to failures to timely file suspicious activity reports (SARs) and correct deficiencies in its customer due diligence (CDD) process.
The bank will be required to appoint a compliance committee and hire an independent consultant and BSA officer, according to its consent order.
The agency acknowledged the bank disclosed in October regulatory inquiries into transaction monitoring, training, governance, and CDD, according to a quarterly filing.
In the filing, the bank said it “plans to continue implementing enhancements to these programs” and does not expect a “material adverse financial impact on the corporation.”
“We have been working closely with the [OCC] over the past year to make improvements to our AML and sanctions programs,” a BofA spokesperson said in an emailed statement. “The work we’ve done so far positions us well to implement the requirements of the consent order.”
According to the order, BofA “had a breakdown in its policies, procedures, and processes to identify, evaluate, and report suspicious activity,” including a systemic failure to “ensure that its transaction monitoring system had appropriate thresholds for determining when transaction alerts should trigger a case investigation.”
The OCC said the bank’s failure to ensure sufficient resources dedicated to case investigations and noncompliance with the SAR filing requirement resulted in violations.
Within 30 days, the bank must appoint a compliance committee consisting of at least three members, the majority of which are directors who are not employees or officers of the bank. Within 60 days, the bank must hire an independent consultant to conduct an assessment of its BSA and sanctions compliance programs.
The OCC further ordered the bank to revise its CDD program to “ensure appropriate collection and analysis of customer information when opening new accounts, when renewing or modifying existing accounts for customers, and when the bank obtains event-driven information indicating that it should obtain updated information to better understand the nature and purpose of its customer relationships and generate and maintain an accurate customer risk profile.”
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