Earlier today, the OCC announced a $50 million civil money penalty against Rabobank of Roseville, CA. This penalty is a result of deficiencies in the bank's BSA/AML compliance program dating back to a consent order on December 5, 2013.
In their release, the OCC found the following:
- Since at least 2012, the bank failed to establish and maintain a compliance program that adequately covers required BSA/AML elements. The bank failed to develop adequate “customer due diligence” and “enhanced due diligence” processes, as required by the BSA, and failed to adequately investigate questionable activity related to law enforcement subpoenas and requests received pursuant to section 314(a) of the USA PATRIOT Act, which requires banks to provide certain customer and account information upon request from the Financial Crimes Enforcement Network (FinCEN).
- As required by the 2013 order, an independent consultant reviewed the bank’s transaction and account activity between January 2010 and December 2013, resulting in the filing of 472 Suspicious Activity Reports (SARs) and reporting more than $233 million in previously unreported suspicious activity. The bank’s systemic failure to report suspicious transactions and file SARs resulted in a violation of 12 C.F.R. § 21.11.
- During the OCC’s examination that commenced in November 2012, bank senior officers participated in efforts to preclude the OCC from obtaining requested information and the bank concealed requested documents from OCC officials, in violation of 12 U.S.C. § 481.
As you can see from this statement, this financial institution - who states they are one of the 30 largest banks in the world - had some major deficiencies in their management of their BSA/AML program. The Consent Order for a Civil Money Penalty goes on to state the following:
"In addition, the Bank's audit scope was limited in key areas, staffing in the Bank's BSA compliance department was insufficient, and Bank staff did not receive sufficient BSA training to perform their respective duties."
This statement clearly reflects the agency's exceptions for BSA staffing, training, and expertise. In addition to this, the original consent order lays out many corrective actions that should be basic fundamentals for any BSA program. This fine is a reminder of the importance of placing a greater value on effectiveness than on efficiency.