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FinCEN announces enforcement action against Capital One, $390 million penalty
The Financial Crimes Enforcement Network (FinCEN) Friday announced a new enforcement action against Capital One Bank for engaging in both willful and negligent violations of the Bank Secrecy Act (BSA) and its implementing regulations. The agency has assessed a $390 million civil money penalty for the violations.
Specifically, FinCEN determined and Capital One admitted to willfully failing to implement and maintain an effective anti-money laundering (AML) program to guard against money laundering.
The assessment details BSA violations regarding the filing of suspicious activity reports (SARs) and currency transaction reports (CTRs) between 2008 and 2014. Of note, the violations took place in the bank's Check Cashing Group, a business unit that was established following the acquisition of other regional banks in 2008.
“The failures outlined in this enforcement action are egregious,” said FinCEN Director Kenneth Blanco in a statement. “Capital One willfully disregarded its obligations under the law in a high-risk business unit.
"Capital One’s egregious failures allowed known criminals to use and abuse our nation’s financial system unchecked, fostering criminal activity and allowing it to continue and flourish at the expense of victims and other citizens," Blanco added.
FinCEN indicated that Capital One was aware of the risks and had received warnings from regulators, as well as criminal charges against some customers. The bank's internal assessments had ranked some of the customers in the top 100 of its highest risk customers for money laundering.
NAFCU works closely with FinCEN to ensure credit unions are aware of regulatory changes and trends and BSA/AML reform was one of the association's advocacy priorities for 2020 in efforts to reduce regulatory burdens, including those related to SAR and CTR filings.
The fiscal year 2021 National Defense Authorization Act includes several NAFCU-sought wins for credit unions, including AML and BSA reform.