See http://www.sltrib.com/business/ci_2845960. Something we can all learn from.

What we can learn is that we would get a C&D, but the 5th largest bank in the country only gets an internal memo that would never have been made public if a whistle blower had not leaked it.

Why devsfan, are you suggesting the OCC didn't learn anything from the way it initially pampered Riggs?

I guess I am.

I believe I was hit with shrapnel! Need a MASH unit here.

We little guys who have been drawn and quartered by the regulators have been anxiously waiting to see what was going to happen to the 'big' guys. Now we know, they obviously don't have to play by the same rules.

Big banks getting away with what little banks get in regulatory hell for is nothing new. In the 70's Ralph Nader was writing and giving speeches about regulators looking at big banks as "To Big to Fail"

If a big bank was allowed to fail, be hugely fined, or have a series of C and D's made public, the havoc to the countries economy would be devastating. So while individual examiners may report deficiencies. The agencies and politicians are not going to let a big bank cause economic or political harm.

A small bank with a problem does not have the same political or economic impact, so they are always going to take it in the ear.

May be this is a sign of the regulators taking a more reasonable and measured approach?

Someone, either here in BOL or in an article, stated that large banks also have the financial wherewithal to throw money at a problem to fix it quickly, something smaller banks do not have generally. Therefore, a problem at a smaller bank may be a larger, more difficult to resolve problem. (Of course, the other side of that is the risk at the larger bank might be higher due to size of customers, types of products, etc.)

The article said...

"Among the deficiencies cited by regulators were failure to report some large cash transactions and insufficient internal auditing of anti-laundering practices. The problems were procedural, and there was no evidence that the bank had been used to fund terrorism, the memo said."

That doesn't sound worthy of a formal enforcement action to me. It sounds as if the biggest problem is the fact that the problems keep repeating. I'm not sure how this issue compares to what was happening at Riggs. Just because Wells Fargo is a big bank, it doesn't mean it's being treated differently than a small bank with similar problems.

However, having worked for a large bank, I can tell you that examination "problems" are sometimes (but not all the time) truly are handled differently.

The fact that the OCC employee leaked the memo is interesting. I wonder how much experience this person has an examiner. I truly hope it was not someone who still wet behind the ears and didn't understand the relationship between a bank and it's regulator.

The last paragraph is bothersome to me:

"The Wells memo said the bank wasn't subjected to a harsher sanction in part because there was ''no apparent money laundering, potential terrorist financing, pattern of structuring to evade reporting requirements or insider complicity."

I'll bet that there are plenty of smaller banks out there that had similar circumstances and still ended up under an order.

David and Dolly,

I don't know that they are, but why shouldn't Wells fight a cease and desist order?

Let's put our emotions aside for a moment and pause to put this into perspective. Wells had a few CTR violations and the internal audit wasn't up to snuff. Obviously, in the big scheme of things, this was not a serious enough failure to cause too much hand wringing at the OCC -- at least apparently not from most folks at the agency.

You're free to disagree with me, but I don't think this should be about the regulators treating a big bank differently than a small bank. My bank (which is not a big bank) found itself in a similar situation to Wells and we didn't get an enforcement action because we made it very clear to the examiners we were going to do what it took to get back on track. (I will admit, however, that ours was not a repeat situation.)

David, the *last* thing our industry needs is for regulators to start with "knee jerk" enforcement. Despite what the FDIC Act says, let's give them the freedom and grace to supervise with intelligence and forethought.

As someone suggested above, I think we may be beginning to see the pendulum swing back from the extremes of the past three or four years. At least we can only hope. I applaud the agency for showing the restraint to not take the "safe" road and just treat Wells like it was another Riggs.

The above post is anonymous for obvious reasons.

There was more in the memo regarding the deficiencies at Wells, and they sounded very similar to many banks that wound up with a C&D. I don't have access right now to the article that appeared in American Banker, but I recall there was a lot more damning issues, such as Wells not identifying over 100,000 potential MSB's and other serious lapses.

Of course Wells should fight a C&D. I can't imagine a bank that wouldn't fight a C&D. The difference is that most banks would lose that fight.

My fear in all of this is that management at banks might now look upon the whole BSA enforcement as more about politics and posturing than about the safety of the bank and our country.

Let's be honest here. Much of the hoopla surrounding AML compliance is politics and posturing. How many terrorists have been identified through filing CTRs or treating MSBs as high risk customers? (I know we haven't found any.) Who can say that the few that have been found might not have still been found without the Patriot Act.

Unless there really is some grounds for it, sacrificing Wells on the altar of "treating the big banks the same as the small banks" is also politics and posturing.

I would suggest that the issue here is not that the OCC might let Wells dodge a C&D. The issue is that the regulators sometimes are treating small banks the same as big banks. Instead of hitting Wells with a sledge hammer, they need to stop hitting the small banks with it for minor violations or compliance weaknesses.

Small banks and large banks do need to be treated differently.

I agree with Bonnie's statement that bank managment is likely to look upon this as politics and posturing.

Those of us that are involved with BSA issues know how serious the consequences are. It's discomforting to see Wells treated in this manner when banks with similar circumstances received harsher treatment.

In my opinion, the failure to identify 100,000 potential MSBs is serious considering all the attention there has been on them in the last year.

Dolly, let's hope the new interagency exam procedures bring some balance to the process. The potential is there, now it's up to the agencies to make them work.

HS

On a similar note, this morning's ABA news said that U. S. Attorneys have to have the approval of the Justice Department's Criminal Division before criminal charges can be filed against a bank for failure to file a SAR

The US Treasury Department's Inspector General issued a report on 8/18/06 regarding the OCC's failure to issue a public cease and desist order against Wells Fargo for BSA violations. The report is 81 pages. Here is a link to it. http://www.treas.gov/inspector-general/audit-reports/2006/oig06034.pdf

It took them 81 pages to say that the regulators don't yank the chains of the Mega Banks?

Does anyone have a copy of the original article? If so PM me, I would like a copy.

Thanks

Shemp, there's a link to it in Reg. Reader's post above.

its not in the link anymore....