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Top Story Compliance Related


Joint statement on BSA/AML enforcement

The federal banking agencies have issued a Joint Statement on Enforcement of Banks Secrecy Act/Anti-Money Laundering Requirements updating their existing enforcement guidance to enhance transparency regarding how they evaluate enforcement actions that are required by statute when financial institutions fail to meet Bank Secrecy Act/anti-money laundering (BSA/AML) obligations.

The statement clarifies that isolated or technical violations or deficiencies are generally not considered the kinds of problems that would result in an enforcement action. It also addresses how the agencies evaluate violations of individual components (known as pillars) of the BSA/AML compliance program. It also describes how the agencies incorporate the customer due diligence regulations and recordkeeping requirements issued by the U.S. Department of the Treasury as part of the internal controls pillar of the financial institution's BSA/AML compliance program.



Fed issues Outstanding CRA rating

Our review of the Federal Reserve Board's Community Reinvestment Act Evaluations and Ratings Search page has revealed that the Federal Reserve Banks made public their ratings of five CRA evaluations in July. Four of the evaluations were rated "Satisfactory." Congratulations to Banco Popular de Puerto Rico, San Juan, on its "Outstanding" rating!


Individual settles potential OFAC liability

OFAC has announced a $5,000 settlement agreement with a U.S. individual who, at the time of the apparent violations was a civilian direct hire of the U.S. Army and stationed at the U.S. embassy in Bogota, and has agreed to settle their potential civil liability for 24 apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations, 31 C.F.R. part 598. Between approximately October 2015 and August 2016, the individual engaged in at least 24 transactions valued at $3,349 that dealt in the blocked property interests of a foreign individual who at the time was a specially designated narcotics trafficker in apparent violation of the Kingpin Sanctions. OFAC determined that the person did not voluntarily disclose the apparent violations, and that the apparent violations constitute an egregious case.


New OFAC Sudan Program and Darfur guidance

OFAC has posted a notice it has published a new Sudan Program and Darfur Sanctions Guidance document and a new FAQ and removed eleven Sudan-related FAQs. OFAC has also amended FAQs pertaining to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) as it applies to Sudan and five general and compliance FAQs to reflect that Sudan has not been a comprehensively sanctioned country since October 12, 2017.


Interactive Brokers to pay $38M for BSA/AML lapses

The SEC has announced that Interactive Brokers LLC will pay an $11.5 million penalty to settle charges it repeatedly failed to file Suspicious Activity Reports (SARs) for U.S. microcap securities trades it executed on behalf of its customers. In parallel actions, the Financial Industry Regulatory Authority (FINRA) and the Commodity Futures Trading Commission (CFTC) also announced settlements with Interactive Brokers related to anti-money laundering failures in which the registered broker-dealer agreed to pay penalties of $15 million and $11.5 million, respectively, for a total of $38 million in penalties paid to the three agencies.

For additional information, see Interactive Brokers LLC paying $38M for BSA/AML failures, in the BankersOnline Penalties pages.


OCC CRA evaluation ratings released

The OCC has released a list of 30 Community Reinvestment Act (CRA) performance evaluations that became public in July. The possible ratings are outstanding, satisfactory, needs to improve, and substantial noncompliance. Of the evaluations listed, 21 are rated satisfactory.

We congratulate these nine institutions, which were rated outstanding:


OFAC adds a dozen new designations

On Friday, OFAC imposed sanctions on eleven individuals for undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly of the citizens of Hong Kong. These actions were taken in accordance with Executive Order 13936, “The President’s Executive Order on Hong Kong Normalization,” which President Trump issued on July 14, 2020.

OFAC also took action against Bi Sidi Souleymane, also known as Sidiki Abbas. Souleymane leads the Central African Republic (CAR)-based militia group Return, Reclamation, Rehabilitation (3R). OFAC's action was coordinated with an action by the U.N. Security Council.

For more information on the identities of the twelve individuals designated in OFAC's actions, see the BankersOnline OFAC Update.


FinCEN repeals special measure for Banco Delta Asia

FinCEN has published a final rule [85 FR 48105] repealing and removing its regulations concerning Special Measures against Banco Delta Asia at 31 CFR 1010.655, effective today.


Enforcement actions against Capital One

Capital One Financial Corporation, McLean, Virginia, was issued a consent cease and desist order by the Federal Reserve Board, and its national bank subsidiaries, Capital One, N.A. and Capital One Bank (USA), N.A., were assessed an $80 million civil money penalty and issued a consent cease and desist order by the OCC.

The enforcement actions were taken for the banks' failure to establish effective risk assessment processes prior to migrating significant information technology operations to the public cloud environment, and their failure to correct the deficiencies in a timely manner, culminating in a significant data breach in March 2019 that affected the personal information of Capital One credit card customers and applicants for credit card products.

For addition information, see this BankersOnline Penalty Page.


U.S.-UK innovation partnership meeting

Treasury reported yesterday on Wednesday's virtual meeting of U.S. and UK participants in the countries' Financial Innovation Partnership to exchange views on topics of mutual interest. The Regulatory and Commercial Pillars of the Partnership met jointly to discuss deepening U.S.-UK ties in financial innovation. Also, the representatives of the U.S. Treasury Department and Her Majesty's Treasury chaired a discussion of the Regulatory Pillar of the FIP, engaging on topics including digital payments, operational resilience, cross-border testing of innovative financial services, and regulatory and supervisory technology.

Participants acknowledged the importance of the ongoing partnership in monitoring and analyzing trends in global financial innovation, as well as being an integral component of the U.S.-UK financial services cooperation.


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