The Federal Reserve Board announced an enforcement action against American Express Company on Thursday for failing to sufficiently detect and report suspicious activity related to money laundering, while also citing significant deficiencies in the firm's enterprise-wide anti-money laundering program at its subsidiary national bank.
Key Takeaways
- Federal Reserve Board announced enforcement action against American Express Company for failure to detect and report suspicious money laundering activity.
- Significant deficiencies identified in enterprise-wide anti-money laundering program, particularly at subsidiary national bank.
- Office of the Comptroller of the Currency issued separate enforcement action against the national bank subsidiary.
- Action aims to ensure firm operates in compliance with all U.S. laws and regulations.
- No monetary penalty amount disclosed in the initial announcement.
Details of the Enforcement Action
The Federal Reserve's order addresses what it described as the firm's failure to sufficiently detect and report certain suspicious activity related to money laundering. The Board also identified significant deficiencies in how American Express Company's enterprise-wide anti-money laundering program was implemented, particularly at the firm's subsidiary national bank. The action is intended to help ensure that the firm operates in compliance with all U.S. laws and regulations.
Regulatory Coordination with OCC
The Office of the Comptroller of the Currency (OCC), the primary federal regulator of American Express's national bank subsidiary, has issued a separate enforcement action against the bank. This coordinated approach underscores the seriousness with which federal regulators are treating the identified anti-money laundering control weaknesses across the organization's banking and non-banking operations.
Implications for Anti-Money Laundering Compliance
The enforcement action highlights the ongoing regulatory focus on the effectiveness of anti-money laundering programs at large financial institutions, particularly those with complex enterprise-wide structures. The Federal Reserve's emphasis on "enterprise-wide" program implementation suggests that compliance failures at a subsidiary level can trigger holding company-level enforcement, reinforcing the expectation that parent companies maintain robust oversight of all subsidiaries' AML controls.