I don’t care how big you are, a $10 million CMP is serious money.
TCF Financial Corp. will pay $10 million for lapses in monitoring suspicious bank transactions, including potential terrorist financing. According to reports in The Star Tribune, the fine “announced Friday January 25 by the Office of the Comptroller of the Currency, caps a long-running probe of the bank’s compliance with the Bank Secrecy Act. TCF mishandled mandatory reports regarding questionable dealings, a key tool for law enforcement to prevent money laundering and other illegal activity, federal officials said. At issue were cash transactions that appeared to be manipulated, and wire transfers where the source and purpose of the funds were unknown, the OCC said.” (See source link at end of this narrative.)
I’m sorry for the TCF folk, including their shareholders. I wouldn’t wish this on any bank. But, if there’s a silver lining, it is this: the hit to TCF can serve as a close-by “lightning strike.” It’s an example of what happens when BSA compliance get’s shoved on the back burner. Reading this article is a good reminder for a bank to stay focused on this fact of compliance life: the regulators are not kidding about BSA compliance.
And, since good compliance requires active and positive support from senior management, including the Board, a wise BSA compliance officer will make a copy of this report and include it in the next board presentation. And, speaking of senior management and the Board, it might be good to remind them, the next time they start fussing about the compliance budget, that a $10 million dollar CMP is one heck of an expensive compliance lesson, far more than the modest cost involved to keep a bank inside the lines. (TCF’s assets as of 9/2011 were $17.7 billion; total equity was $1.7 billion. Earnings in the third quarter 2011 were $9.3 million. The $10 million fine was not inconsequential.)
If you have concerns or questions about your banks BSA compliance, give me a call at 800-522-8269, or email me with BSA CMP in the subject line. Remember, there’s never a charge to kick things around, do some “spitballing” on ways to improve your compliance.