American Express must pay a $350 million penalty after regulators cited “significant deficiencies” in its anti-money laundering program.

The Office of the Comptroller of the Currency and the Federal Reserve Board concurrently issued enforcement actions against American Express and its subsidiaries Thursday over failures in their anti-money laundering programs.

American Express National Bank was hit with a cease-and-desist order and a $350 million civil money penalty by the OCC, while American Express and its travel-related services arm received a cease-and-desist from the Fed.

Amex’s bank subsidiary failed to tailor its Bank Secrecy Act/anti-money laundering risk assessment to its business activities, according to the OCC, by focusing too much on its “relatively narrow” demand deposit account products and services and not enough on the risks in its “more dominant” credit and charge card products.

Additionally, Amex experienced “systemic breakdowns” in its suspicious activity monitoring and reporting processes, resulting in roughly $13 billion of suspected money laundering activity over the past 10 years, the OCC said.

The Fed called Amex’s AML program issues “enterprise wide,” but particularly an issue at its national bank subsidiary.

“The OCC expects banks of American Express’s size and complexity to devote sufficient resources to ensure compliance with laws and regulations designed to detect and prevent money laundering, which are critical to both economic and national security,” said Comptroller of the Currency Jonathan Gould in a prepared statement.

” The consent orders are not anticipated to affect Amex’s 2027 guidance, according to the filing.

Source link