US Bancorp assessed $275 million in fines, $528 million forfeiture, for money laundering violations

Penalties of $275 million, and a forfeiture of $528 million, were imposed on one of the nation’s largest banking companies after federal banking and law enforcement agencies determined it was in violation of federal anti-money laundering requirements.

In a release Thursday, the Federal Reserve said it had fined U.S. Bancorp of Minneapolis $15 million for lacking “adequate risk management and compliance policies and procedures” to ensure the bank complied with applicable Bank Secrecy Act and anti-money laundering requirements (BSA/AML).

The Minnesota-based bank was ordered by the Fed to improve risk management and oversight of its banking subsidiaries’ compliance with U.S. economic sanctions, and BSA/AML.

At the same time, the U.S. Bancorp’s national bank subsidiary (U.S. Bank National Association of Cincinnati, Ohio), was fined $75 million and $185 million, respectively, by the Office of the Comptroller of the Currency (OCC) and the Financial Crimes Enforcement Network (FinCEN) for BSA violations, for “deficiencies in the bank’s Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance program,” the OCC said in a release. “These deficiencies were the subject of the OCC’s 2015 consent order against the bank.”

The Fed also said, in its release, that in a separate action, the U.S. Department of Justice announced the execution of a deferred prosecution agreement with the banking company for BSA violations that occurred at its national bank subsidiary. The deferred prosecution agreement provides for a $528 million forfeiture by U.S. Bancorp.

“Under the terms of the Board’s consent cease and desist order, US Bancorp must strengthen oversight of firmwide risk-management and compliance programs for preventing violations of anti-money-laundering and U.S. sanctions laws and put in place procedures to ensure it provides adequate and complete responses to examiner inquiries,” the Fed stated.

In its release, the OCC said it assessed the fine (the result of a 2015 consent agreement) because of an inadequate system of internal controls, ineffective independent testing, and inadequate training at the bank.

“The bank had systemic deficiencies in its transaction monitoring systems, which resulted in monitoring gaps and a significant amount of unreported suspicious activity. The bank conducted a look-back required by the 2015 consent order and, as a result, had to file additional Suspicious Activity Reports, which constituted additional violations of 12 C.F.R. § 21.11.”

The OCC said the bank paid the assessed penalty to the U.S. Treasury.

Federal Reserve Board fines US Bancorp $15 million and orders it to improve risk management and oversight