Policy & Regulation

WASHINGTON — BNP Paribas on Monday became the second foreign bank this year to plead guilty to violating U.S. laws, but perhaps the biggest question about the Justice Department action against the French company is what it means for U.S. banks.

A nonbank mortgage servicer that took on more loans than it could handle ended up delaying payments to Fannie Mae and Freddie Mac, according to a government watchdog report.

BNP Paribas' record $8.9 billion penalty and criminal guilty plea could have reverberations industrywide, including emboldening the Justice Department to seek similar actions against domestic banks and causing international regulators to take retaliatory action.

The Justice Department announced a criminal plea and settlement with BNP Paribas on Monday, in which the French bank will pay nearly $8.9 billion to settle charges it willfully continued to do business with countries and entities on the U.S. sanctions list. It was the largest sanctions fine in the Justice Department's history — more than four times larger than #2 on the list. The following are the largest penalties paid by banks for sanctions violations.

BNP Paribas was charged in a criminal probe of U.S. sanctions violations, signaling the bank has resolved an investigation spanning seven years and will pay almost $9 billion, the largest fine ever for such a case.

The Internal Revenue Service is about to get an unprecedented look at bank accounts and investments U.S. citizens hold abroad, through a law that is making it harder to hide assets from the tax collector.

U.S. Bancorp, the nation's largest regional lender, agreed to pay $200 million to resolve federal claims that it misrepresented the quality of government-backed mortgages the company originated.

William Dudley, head of the Federal Reserve Bank of New York, has been elected chairman of the Economic Club of New York.

The Financial Stability Oversight Council has manifestly failed to demonstrate that it has any idea how to determine if a financial firm is systemically important, writes AEI fellow Peter Wallison.

WASHINGTON — Regulators on Friday closed Freedom State Bank, in Freedom, Okla., the 12th institution to fail this year.