In an order made public last week, it was announced Apple Bank for Savings has agreed to pay the FDIC $12.5 million in civil penalties for allegedly violating the federal Bank Secrecy Act and failing to fully implement an ordered anti-money laundering compliance program.
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The alleged acts, spanning from 2014 to 2018, violated several provisions of the Bank Secrecy Act. This is a law aimed at keeping criminals from using U.S. financial institutions as instruments of illegal activity. The order also added that Apple failed to update its anti-money laundering risk assessment program to make it congruent with the examination manual of the Federal Financial Institutions Examination Council.
The FDIC and Apple Bank came to an agreement in 2015 after an April target examination of the New York bank led to the FDIC requiring they institute a number of anti-money laundering measures. Apple agreed, “without admitting or denying any charges of unsafe or unsound banking practices or violations of law or regulation relating to weaknesses in the bank’s Bank Secrecy Act.”
The 2015 order required FDIC oversight of new, enhanced anti-money laundering and Bank Secrecy Act compliance programs for the bank. Specifically, Apple Bank promised to roll-out a comprehensive system in place for monitoring, detecting and reporting suspicious activity, and to enhance the due diligence process for making sure it identified its customers properly as well as its system “for those categories of customers the bank has reason to believe pose a heightened risk of suspicious activity.”
FDIC records show that the 2015 agreement was terminated in May 2020.
A representative for Apple Bank told Law 360, on Friday, “Apple Bank is committed to strong and transparent relationships with its regulators and has worked diligently and invested considerable resources to address the FDIC’s comments.”
“Apple Bank’s enhancements to its compliance program have been acknowledged by the FDIC and reflect the bank’s commitment to providing superior service to the customers and communities it serves in New York, while maintaining a compliance program that complies with applicable statutory and regulatory requirements,” the representative added.
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Source: https://www.law360.com/banking/articles/1350121/fdic-fines-apple-bank-12-5m-over-aml-compliance
