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#2264234 - 01/03/22 08:16 PM FinCen's recent $8m civil money penalty
J_G Offline
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What are everyone's thoughts on FinCen's recent $8million civil money penalty against Community Bank of Texas? Will you be doing anything differently in your BSA compliance programs due to this?

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#2264236 - 01/03/22 08:31 PM Re: FinCen's recent $8m civil money penalty J_G
HappyGilmore Offline
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Pulling people out of the ditc...
Originally Posted by HappyGilmore
Originally Posted by J_G
What are everyone's thoughts on FinCen's recent $8million civil money penalty against Community Bank of Texas? Will you be doing anything differently in your BSA compliance programs due to this?
the bigger question should be how does this impact your bank and what will your bank be doing differently, if anything. trying to compare to what another bank is or isn't doing is not always an apple to apple comparison.

This is a pretty significant lack of procedures this bank admitted to:

CBOT admitted that it willfully failed to implement and maintain an effective anti-money laundering (AML) program that was reasonably designed to guard against money laundering. CBOT also admitted that it willfully failed to report hundreds of suspicious transactions to FinCEN involving illegal financial activity by its customers and processed by, at, or through the bank even after the bank became aware that certain customers were subjects of criminal investigations. The violations occurred from at least 2015 through 2019 and caused millions of dollars in suspicious transactions to go unreported to FinCEN in a timely and accurate manner, including transactions connected to tax evasion, illegal gambling, money laundering, and other financial crimes.
Last edited by HappyGilmore; 01/03/22 08:35 PM.
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#2264240 - 01/03/22 09:50 PM Re: FinCen's recent $8m civil money penalty J_G
edAudit Offline
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While reviewing these types of enforcement actions are a great training tool, I would be more concerned with what your bank is/is not doing. While an 8 million dollar fine seems like a lot, I am sure with the remediation the cost will double.

It is noted that we do not know the specifics of the case but if you need to check to see if there is willful neglect in your FI a quick review of the case on the internet will not be sufficient.
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#2264241 - 01/03/22 09:56 PM Re: FinCen's recent $8m civil money penalty J_G
ACBbank Offline
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You may also want to chat with IA firm to see how they are testing to identify any of the issues raised in the CMP.
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#2264256 - 01/04/22 05:26 PM Re: FinCen's recent $8m civil money penalty J_G
TryingtoComply Offline
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Interesting that the violations occurred as far back as 2015 and they were not identified sooner by their regulator.
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#2264257 - 01/04/22 05:33 PM Re: FinCen's recent $8m civil money penalty J_G
rlcarey Online
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A pretty damning statement regarding the effectiveness of previous OCC examinations.

On the other hand, CBOT received satisfactory or strong BSA/AML examination findings from outside examiners through 2019
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#2264260 - 01/04/22 06:43 PM Re: FinCen's recent $8m civil money penalty rlcarey
edAudit Offline
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Originally Posted by rlcarey
A pretty damning statement regarding the effectiveness of previous OCC examinations.

On the other hand, CBOT received satisfactory or strong BSA/AML examination findings from outside examiners through 2019

Hence, we are just seeing a small part of what is going on there. We do not know the extent of MRA, MRIA activity. It could also suggest willful activity on the part of an individual(s) which is noted. More to come?
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#2264315 - 01/05/22 05:05 PM Re: FinCen's recent $8m civil money penalty TryingtoComply
Richard Insley Offline
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Originally Posted by TryingtoComply
Interesting that the violations occurred as far back as 2015 and they were not identified sooner by their regulator.
This case is the perfect response when you're confronted by managers arguing "what we're doing must be OK or else it would have been criticized by our regulator." Regulators miss things and they make no apologies when calling a bank to task during a subsequent examination.
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#2264326 - 01/05/22 06:48 PM Re: FinCen's recent $8m civil money penalty rlcarey
Compliance NABW Offline
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Originally Posted by rlcarey
A pretty damning statement regarding the effectiveness of previous OCC examinations.

On the other hand, CBOT received satisfactory or strong BSA/AML examination findings from outside examiners through 2019

Sounds like somebody finally did a model validation, or the convicted customers were tied to the Bank by an exam team, which proceeded to fill in the blanks.

Extreme focus on credits and not so much on compliance was one of my peeves as an OCC examiner. But, as you likely are aware, there are many factors that go into an exam team "missing" violations.

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