Financial Regulators Clarify Use of Cease and Desist Orders in BSA/AML Enforcement

The federal financial regulatory agencies today issued a joint statement addressing how they will address noncompliance with the Bank Secrecy Act/anti-money laundering requirements. The statement describes the circumstances under which an agency would issue a mandatory cease and desist order or, at its discretion, issue formal or informal enforcement actions or other supervisory actions to address BSA/AML deficiencies.

In the statement—which does not create new expectations or standards—the agencies noted when enforcement actions would be tailored “to address the deficiencies that are specific to the institution, as identified during the supervisory process,” and that such actions would be issued “based on a careful review of all the relevant facts and circumstances.”

The statement clarifies that an agency will issue a cease and desist order for BSA/AML noncompliance in cases where an institution fails to establish and maintain a reasonably designed BSA/AML compliance program or fails to correct a previously reported problem with its BSA/AML compliance program. An agency may also take a formal or informal action against an institution for other BSA/AML program concerns or deficiencies related to Suspicious Activity Report filings and other recordkeeping requirements.