A $676 million bank in Andrews, Texas, has been ordered by the Federal Reserve Board and the Texas Department of Banking to undertake numerous actions to correct its violations of Bank Secrecy Act/anti-money laundering (BSA/AML) requirements, the Fed announced in a release Tuesday.
In a cease-and-desist order, executed Dec. 26, the Fed and state regulator said the most recent examination of Commercial State Bank of Andrews, Texas, identified “significant deficiencies” in the bank’s risk management and compliance with applicable laws, rules and regulations relating to AML. These included, the order notes, violations of the BSA, Treasury’s rules and regulations under BSA, and the AML requirements of the Fed’s Regulation H, which sets BSA/AML requirements for supervised institutions.
According to the order, the board of this state-chartered member bank has 60 days to submit a written plan to strengthen board oversight of the bank’s BSA/AML compliance that, “at a minimum,” addresses, considers and includes:
(a) the actions that the board of directors will take to maintain effective control and oversight of bank management’s compliance with the BSA/AML Requirements;
(b) measures to ensure adherence to approved compliance policies, procedures, and standards;
(c) measures to ensure BSA/AML issues are appropriately tracked, escalated, and reviewed by the Bank’s senior management; and
(d) adequate resources for the BSA/AML compliance officer, including sufficient staffing levels, and periodic re-evaluation of resources and staffing needs.
Additionally, the bank has 60 days to submit an “enhanced” written BSA/AML compliance program; a written revised program for conducting “appropriate levels of customer due diligence”; and a written enhanced program “to reasonably ensure the identification and timely, accurate, and complete reporting by the Bank of all known or suspected violations of law or suspicious transactions to law enforcement and supervisory authorities.” It must also engage an independent third party acceptable to the supervisors to validate effectiveness of the bank’s transaction monitoring system and to report findings, conclusions and recommendations, the order says.
Among other provisions, the order requires the bank to submit an acceptable written plan for independent testing of the bank’s compliance with all applicable BSA/AML requirements.