OCC Slams Bank of America for BSA Lapses: A Wake-Up Call for Banks

The Office of the Comptroller of the Currency (OCC) has issued a cease-and-desist order against Bank of America (BofA) for shortcomings in its sanctions programs and noncompliance with the Bank Secrecy Act (BSA). This enforcement action serves as a stark reminder for other large banks to strengthen their anti-money laundering (AML) and sanctions compliance programs.

BofA's failure to timely file suspicious activity reports (SARs) was a significant factor in the OCC's decision. The bank had not corrected previously identified deficiencies in its Customer Due Diligence (CDD) processes, leading to systemic lapses in transaction monitoring and SAR reporting. This failure to address weaknesses in CDD processes and lack of proper oversight, training, and screening for sanctions compliance contributed to the bank's noncompliance with the BSA.

The OCC's order highlighted several key internal controls and governance issues in BofA's BSA compliance program. These included inadequate internal controls, poor governance, and deficient independent testing, which led to systemic lapses in transaction monitoring and suspicious activity reporting. The bank also neglected to address weaknesses in customer due diligence processes and lacked proper oversight, training, and screening for sanctions compliance.



BofA's inadequate customer due diligence processes and lack of proper oversight and training for sanctions compliance were significant factors in the OCC's decision. The OCC identified weaknesses in the bank's CDD processes, leading to systemic lapses in transaction monitoring and suspicious activity reporting. Additionally, the bank neglected to address these deficiencies, demonstrating a lack of proper oversight and training in sanctions compliance. This failure to correct previously identified issues and maintain an effective BSA compliance program contributed to the OCC's enforcement action.

The penalties imposed on BofA differed from those faced by Wells Fargo and TD Bank. Unlike Wells Fargo, which faced oversight restrictions and a fine, BofA's order did not include a monetary penalty. Unlike TD Bank, which had an asset cap imposed and growth restrictions, BofA's order did not mention any growth limitations. Bank of America's agreement with the OCC focused on revamping its AML protocol, hiring a third-party consultant, and reviewing past actions, indicating a more cooperative approach to remediation.



Other large banks can learn from BofA's enforcement action to enhance their BSA/AML compliance programs. The OCC's order highlights the importance of timely suspicious activity reporting, robust internal controls, and effective governance. Banks should ensure they have adequate resources dedicated to BSA/AML compliance, invest in advanced transaction monitoring systems, and provide comprehensive training to staff. Additionally, banks should regularly review and update their customer due diligence processes to address evolving risks. Lastly, banks should maintain open communication with regulators and promptly address any identified deficiencies to avoid potential enforcement actions.

In conclusion, the OCC's cease-and-desist order against Bank of America serves as a wake-up call for other large banks to strengthen their BSA/AML compliance programs. By learning from BofA's mistakes and taking proactive measures, banks can mitigate risks and avoid potential regulatory penalties.