American Express Fined $350 Million Over AML Failures

American Express National Bank has been fined $350 million after US regulators found failures in its anti-money laundering controls, including shortcomings in identifying and reporting approximately $13 billion in suspected trade-based money laundering activity over the past decade. The Office of the Comptroller of the Currency (OCC) announced the penalty and a cease-and-desist order on October 8.

The OCC said the bank’s Bank Secrecy Act (BSA) and AML compliance program suffered from inadequate resources, staff with insufficient expertise, gaps in internal controls, weak independent testing, and inadequate training for employees and directors.

It continued: 

The bank focused on the risks in its relatively narrow demand deposit account products and services and insufficiently on the risks in its more dominant credit and charge card products. In addition to its ineffective risk assessments, the bank’s customer due diligence processes and customer identification program procedures contributed to the bank’s monitoring and reporting failures.

Separately, the Federal Reserve issued a consent cease-and-desist order against American Express Company and American Express Travel Related Services Company. It identified weaknesses in transaction monitoring, fraud referral processes, third-party risk assessment, and financial crime risk management.

The Federal Reserve order requires American Express to submit plans within 90 days to strengthen board oversight and its group-wide BSA/AML compliance program. These must address customer due diligence, transaction monitoring, suspicious activity reporting, and oversight of third parties.

The companies consented to the Federal Reserve order without admitting or denying its allegations. 

American Express CEO Stephen Squeri said it was committed to addressing regulators’ concerns and continuing to improve compliance.