Financial crimes

U.S. regulators have made it clear that banks have the discretion to explain account closures, short of disclosing the existence of a suspicious activity report filing. They should make it mandatory.

A forthcoming rule from Treasury's Financial Crimes Enforcement Network will spell out banks' obligations to identify the true identities and beneficial ownership of its clients, even as the administration eliminated most U.S. beneficial ownership reporting.

Less than half the information banks share under the program relates to money laundering or terrorist financing, by Fincen's own count. Most is fraud.

The USA Patriot Act passed on an overwhelming bipartisan basis in the wake of the 9/11 attacks, overhauling banks' involvement in anti-money-laundering efforts.

The global rise of online gambling has created a range of new money-laundering risks for banks and other companies, according to the Financial Action Task Force, an international standard-setting organization.

A consulting firm working for BMO Harris flagged the processor's charge-back problem in 2015. The FTC says the shell accounts kept coming through 2023.

Banks say the cost and complexity of anti-money laundering compliance — including enhanced due diligence and filing suspicious activity reports — is a major barrier to serving cannabis-related businesses.

The billion-dollar Dallas bank had been cited for money laundering concerns, and its recent conversion to a national charter drew sharp criticism from Sen. Elizabeth Warren.

One of the benefits of the Clarity Act is that it would codify much of digital asset firms' anti-money-laundering responsibilities. This is good news for banks that have been understandably nervous about counterparty risk.

Regulators issued a joint statement Wednesday clarifying that banks can discuss facts surrounding suspicious activity with customers so long as they do not disclose the existence of a suspicious activity report explicitly. 

Erin Piacenti, 32, was a vice president at Bank of America and the mother of a five-month-old baby. On her way home from work, she was stabbed to death in what New York police called a "random and unprovoked attack."

A former Democratic congressman will serve as vice president of wholesale banking at Truist Financial; Bank of America's $72.5 million settlement with sex trafficking victims of the late financier Jeffrey Epstein is approved by a New York federal judge; HDFC plans to challenge the bankruptcy resolution involving a personal guarantee by media tycoon Subhash Chandra; and more in this week's banking news roundup.

The checks were drawn on accounts at JPMorganChase, Citibank, BMO, Stellar Bank and Amegy Bank. The largest single check ran just over $1.5 million.

Thomas Eide's CB Surety ran small charges on prepaid cards to dilute clients' charge-back ratios, keeping open the accounts banks would have closed.

Bankers, particularly at the midsize and regional level, should be on the lookout for more opportunities to develop networked solutions to common problems, such as know-your-customer operations and fraud detection.

Depository institutions filed about 3% of the suspicious activity reports Fincen counted but accounted for 61% of the dollars — roughly $3 billion.

The Treasury's Financial Crimes Enforcement Network's decision to permanently exempt U.S. businesses from disclosing their true owners eliminates a database banks hoped would help them satisfy their customer due diligence. 

A report released this week by Sen. Ron Wyden, D-Ore., shines a light on what is required of banks when high-net-worth clients engage in suspicious activity.

The second-largest U.S. bank provided an update to investors about the consent order issued by the OCC in 2024, saying a resolution may include monetary penalties.

The Treasury's financial crime prevention arm said the Swiss firm's U.S. brokerage wing largely ignored a 2018 consent order to clean up its anti-money-laundering processes, leading to the historic settlement announced early in August.