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OCC and FinCEN Levy $140M Fine, Cease and Desist Order Against USAA

The Office of the Comptroller of the Currency (OCC) has assessed a $60 million civil monetary penalty against USAA, Federal Savings Bank, for violations of the OCC’s Bank Secrecy Act regulations. The OCC also issued a Cease and Desist Order against USAA citing the bank’s failure to establish and maintain an effective Bank Secrecy Act/Anti-Money Laundering (BSA/AML) program.

The OCC’s civil monetary penalty (which will be paid to the U.S. Treasury) is separate from, but coordinated with, a settlement between USAA and the Financial Crimes Enforcement Network (FinCEN), where FinCEN assessed a $140 million civil monetary penalty against USAA for willful violations of the Bank Secrecy Act and its implementing regulations. FinCEN has agreed to credit the $60 million civil penalty imposed by the OCC.

In its findings, the OCC reports that USAA failed to adopt and implement a BSA/AML program that adequately covered the requirements of the Bank Secrecy Act and its implementing regulations.

The OCC claims that such deficiencies resulted in USAA’s failure to file timely suspicious activity reports. The bank also failed to correct BSA/AML internal control problems that the OCC had previously identified and reported to it.

Congress passed the Bank Secrecy Act, aka the Anti-Money Laundering Law, in 1970 to combat money laundering. Since then, the BSA has required financial institutions to work with government agencies to protect their clients, communities, and country. Financial institutions are required to maintain detailed records and report any suspicious activity that could indicate money laundering or other crimes.

“As its customer base and revenue grew in recent years, USAA FSB willfully failed to ensure that its compliance program kept pace, resulting in millions of dollars in suspicious transactions flowing through the U.S. financial system without appropriate reporting,” said FinCEN’s Acting Director Himamauli Das. “USAA FSB also received ample notice and opportunity to remediate its inadequate AML program, but repeatedly failed to do so. Today’s action signals that growth and compliance must be paired, and AML program deficiencies, especially deficiencies identified by federal regulators, must be promptly and effectively addressed.”

The OCC’s Cease and Desist Order requires the bank to take broad and comprehensive corrective actions to improve internal controls, training, staffing, and third-party risk management of its BSA/AML program.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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