The Office of the Comptroller of the Currency (OCC) has issued a powerful cease-and-desist order against Bank of America, exposing glaring weaknesses in its AML defenses across nearly every category. OCC highlighted multiple Key failures including: - Inadequate Customer Due Diligence (CDD): Highlighting gaps in understanding customer profiles and risks. - Delayed Suspicious Activity Reports (SARs): A critical lapse in timely reporting of potential financial crimes. - Non-Compliance with BSA and Sanctions Rules: Unsafe practices undermining compliance with the Bank Secrecy Act (BSA) and sanctions regulations. To address these shortcomings, the OCC has mandated Bank of America to: - Engage an independent consultant to review its BSA/AML and sanctions compliance programs. - Conduct lookback reviews to ensure all suspicious activity is appropriately flagged and reported. - Enhance governance, controls, and training to ensure ongoing compliance. This action isn’t the first; Bank of America has previously been flagged for BSA compliance issues and is now mandated to submit a comprehensive remediation plan within 90 days. For financial institutions, this is more than a headline—it’s a warning. Compliance is not optional. Institutions must prioritize robust AML frameworks, timely reporting, and customer due diligence to stay ahead of regulatory scrutiny. Key Takeaway for Financial Institutions - Invest in Advanced Technology: Legacy systems are inadequate against sophisticated financial crimes. Advanced solutions provide superior transaction monitoring and risk detection capabilities. - Strengthen CDD and EDD Processes: A deeper understanding of customer behavior and risk factors is critical for effective compliance. - Conduct Regular Risk Assessments: AML frameworks must evolve to match the rapidly changing financial landscape. - Foster Accountability: Boards and senior management must prioritize compliance efforts to minimize regulatory and reputational risks. Is the OCC’s approach a necessary step to ensure accountability, or should regulators focus more on supporting institutions in building robust compliance systems? Share your thoughts Read more: https://lnkd.in/dCYfDJmp #AML #Compliance #AMLWatcher #OCC #BankOfAmerica #MoneyLaundering #Regulations
