TCF Financial to Settle Money-Laundering Probe for $10M

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TCF Financial (TCF) in Wayzata, Minn., will pay $10 million to settle an investigation by U.S. authorities into alleged money-laundering lapses.

The $17.9 billion-asset company said late Friday that it also agreed to a series of steps to strengthen compliance with laws and regulations that aim to prevent banks from being used as channels for funds tied to illegal activities.

The settlement resolves a probe by the Office of the Comptroller of the Currency into the company's alleged failure to properly document transactions it processed over 21 months, starting in November 2008.

The pact comes as regulators push to bolster compliance with the Bank Secrecy Act, the nation's primary money laundering law. In the last six months, regulators have ordered JPMorgan Chase (JPM), HSBC (HBC) and Standard Chartered Bank to tighten money-laundering controls.

The settlement also follows a row between TCF and students at the University of Minnesota over the company's efforts to comply with U.S. laws that govern transactions with Iran.

 

"TCF, bank regulators and law enforcement all share the same goal — ensuring the continued safety and security of the deposits of our customers — and we are confident that with the help of the OCC, we have taken the necessary steps to put in place a best-in-class [Bank Secrecy Act] program and team to lead this critical area moving forward," William Cooper, TCF's chief executive, said in a press release.

The OCC's order follows TCF's review of 2,357 reports of suspicious activities that consisted primarily of cash transactions involving funds of unknown origin. Regulators later found 13 instances of the company's failure to properly file so-called suspicious activity reports for roughly $7.2 million in transactions that suggested ties to terrorist financing

According to the order, the OCC determined that TCF flagged the suspicious transactions, but the documents filed "to report the activity to law enforcement were not adequate and of poor quality."

As part of the settlement, TCF agreed to institute a companywide program to identify risks of money laundering and to review procedures for collecting information from customers when they open an account. TCF also agreed to detail in writing its policies and procedures to comply with the Bank Secrecy Act and to assess the company's compliance annually.

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