Wells Fargo Enters Agreement with OCC to Strengthen Anti-Money Laundering Controls

Wells Fargo Bank, N.A., has entered into a formal agreement with the Office of the Comptroller of the Currency (OCC) to address deficiencies in its anti-money laundering (AML) and financial crimes risk management practices. The agreement, announced today, outlines a comprehensive plan to enhance the bank's compliance with the Bank Secrecy Act (BSA) and U.S. economic sanctions laws.

The OCC identified several areas of concern, including violations related to internal controls, suspicious activity reporting, customer due diligence, and compliance with sanctions enforced by the Office of Foreign Assets Control (OFAC). In response, Wells Fargo has committed to implementing a wide-ranging action plan to rectify these issues.

Important components of the agreement include:

1. Establishing a Compliance Committee to oversee the implementation of corrective actions.
2. Developing a detailed BSA/AML and OFAC sanctions action plan within 120 days.
3. Enhancing front-line financial crimes risk management and independent risk management functions.
4. Improving the bank's customer identification program, customer due diligence processes, and customer risk identification methodologies.
5. Strengthening suspicious activity monitoring and reporting systems.
6. Conducting a comprehensive BSA/AML and OFAC risk assessment.
7. Enhancing data integrity for key compliance systems.
8. Developing a robust OFAC sanctions compliance program.
9. Implementing restrictions on new products, services, and markets until adequate controls are in place.

The agreement also requires Wells Fargo to obtain OCC approval before expanding into new products, services, or geographic markets with medium or high BSA/AML or OFAC sanctions risks.

While the agreement does not impose financial penalties, it mandates significant operational and procedural changes. Wells Fargo will need to demonstrate sustained compliance with these new measures before the agreement can be terminated.

The OCC's action reflects ongoing regulatory scrutiny of major financial institutions' compliance with anti-money laundering and sanctions laws. It underscores the importance of robust internal controls and risk management practices in the banking sector.

Wells Fargo has already begun taking corrective actions and has expressed commitment to fully addressing the issues identified by the OCC. The bank's progress will be closely monitored by its board of directors and the newly established Compliance Committee, with regular reports submitted to the OCC.

This agreement is part of a broader trend of increased regulatory focus on financial crimes prevention in the banking industry. It serves as a reminder to all financial institutions of the critical importance of maintaining effective AML and sanctions compliance programs.

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