Enforcement actions and fines from regulators — the Federal Reserve, the Office of the Comptroller of the Currency and others — highlight the growing scrutiny on anti-money laundering (AML) efforts.
And where these firms, banks and FinTechs among them, are deemed to come up short, there’s a (literal) price to pay. In the meantime, the very rules governing AML and fraud-fighting efforts may change, as a commentary period is ongoing as regulators seek input on the use of advanced technologies to sharpen fraud defenses at financial institutions (FIs).
As reported this past Friday (July 19) the Federal Reserve Board fined Green Dot $44 million for unfair and deceptive practices and a deficient consumer compliance risk management program. Green Dot, for its part, is being tasked with a mandate to, among other actions, “develop an effective anti-money laundering program and hire an independent third-party to conduct a review of certain transaction activities.”
Earlier this year, Toronto-Dominion Bank (TD Bank) detailed steps it had been taking in response to investigations into its AML programs, where it had set aside $450 million to resolve one of these inquiries. The company also set about introducing new technologies and refining its alert systems to tailor them to specific areas of operation and branches.