Capital One reiterates AML investment following FinCEN fine

Financial services firm taking AML obligations “very seriously”

By Leanna Reeves | 27 January 2021

This month, the Financial Crimes Enforcement Network (FinCEN) fined Capital One $390m for violating the Bank Secrecy Act (BSA) and failing to comply with regulations – but the firm claims it is committed to tackling money laundering.

“Capital One takes its anti-money laundering obligations very seriously,” said a spokesperson from the company, via email.

“The bank has invested heavily in the enhancement of its Anti-money laundering (AML) program over the past several years under new AML leadership, and has worked closely with regulators and law enforcement to ensure our compliance processes and protocols are robust and thorough.”

In its latest Corporate Social Responsibility report, Capital One says associates are using up-to-date AML tools whilst using real-time financial data to identify suspicious transactions. The bank’s AML team is also working with non-government organisations including the Polaris Project.

The spokesperson said the firm is filing 8,700 Suspicious Activity Reports (SARs) to FinCEN, on a monthly basis.

In last year’s proxy statement, Capital One revealed it “researched significant milestones with key regulators in areas of AML, CCAR and Sales Practices” throughout 2019.

From 2008 to 2014, Capital One failed to report suspicious transactions, amounting to the laundering of millions of dollars according to FinCen.

FinCEN said the firm deliberately failed to maintain an efficient (AML) program whilst it did not “file thousands of suspicious activity reports (SARs) and negligently failed to file thousands of Currency Transaction Reports (CTRs),” particularly in regards to the business unit Check Cashing Group.

The regulator has said it will not tolerate compliance failures “regardless of their [each institution’s] size and believed influence.”

Capital One admitted to the facts and paid the fine. The firm has also said it enlarged its AML programs since the event.

“We are pleased to resolve this matter, which involves AML oversight from 2008-2014 relating to a small portfolio of check-cashing businesses that Capital One inherited as part of an acquisition and subsequently exited in 2014.

“We previously resolved related issues with our primary regulator, the Office of the Comptroller of the Currency (OCC), as part of a July 2015 Consent Order that was closed in November 2019, after Capital One successfully completed enhancements to its AML program,” said the spokesperson.

“We are pleased to fully resolve the last-remaining government inquiry relating to a line of business the Bank exited in 2014.”

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