Compliance Weaknesses Cost Capital One $100M
The penalty was part of a 2015 consent order. "We have worked diligently with our bank regulators to strengthen our processes and internal controls," a bank spokesperson said Tuesday.
October 23, 2018 at 03:01 PM
3 minute read
Capital One N.A. has agreed to pay $100 million to resolve a financial regulator's claims that the bank failed to address shortcomings in its systems for preventing money laundering.
The penalty comes three years after an earlier settlement with the Office of the Comptroller of the Currency, which cited Capital One for deficiencies in its anti-money laundering compliance program and for failing to file reports to the Treasury Department concerning suspicious customer activity. In assessing the $100 million penalty, the OCC said Tuesday, “the agency found that the bank failed to achieve compliance with the achieved OCC's 2015 order, as required.”
A Capital One spokesperson said Tuesday the civil penalty was part of the 2015 consent order, which did not include a fine.
“It emanates primarily from prior banking relationships with certain check cashing service providers—a business we made the decision to exit in 2014,” the spokesperson said. “Since that time, we have worked diligently with our bank regulators to strengthen our processes and internal controls to ensure we address any concerns regarding our [Bank Secrecy Act/anti-money laundering] compliance processes.”
The spokesperson did not immediately identify the names of the attorneys who represented Capital One before the OCC.
The settlement was finalized Tuesday but signed last week by members of Capital One's board of directors. Capital One neither admitted nor denied the OCC's claims.
Federal banking regulators said Capital One “failed to timely achieve compliance with the 2015 consent order” between 2016 and 2017. After reaching the 2015 settlement, the bank failed to file suspicious activity reports and initiated wire transfers with inadequate or incomplete information, Tuesday's consent order states.
“The bank has undertaken corrective action, and is committed to taking all necessary and appropriate steps to remedy the deficiencies identified by the OCC, and to enhance the bank's [Bank Secrecy Act/anti-money laundering] compliance program,” according to the settlement, which was signed by Maryann Kennedy, the deputy comptroller for large bank supervision.
The OCC reached a similar settlement in December with Citibank, which was fined $70 million for failing to address concerns the agency had raised in 2012. The agency announced the settlement in January.
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