The Federal Deposit Insurance coverage Company (FDIC) is penalizing a Weir, Kansas-based financial institution with a financial high quality equal to over 1 / 4 of the lender’s whole property.
The US banking regulator says it has decided that CBW Financial institution failed to keep up an “sufficient Anti-Cash Laundering/Countering the Financing of Terrorism (AML/CFT) compliance program” and is consequently imposing a high quality of $20.448 million over the violations which occurred between December of 2018 and August of 2021.
“In the course of the Assessment Interval, Respondent [CBW Bank] additionally (1) didn’t file a whole bunch of suspicious exercise experiences (SARs), (2) lacked an acceptable risk-based buyer due diligence course of, and (3) maintained an insufficient due diligence program for FFI correspondent accounts.”
In response to the FDIC, CBW Financial institution’s laxity with regard to measures aimed toward combating cash laundering and terrorism financing helped in producing a good portion of its revenue.
“As a result of [Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) compliance] failures described above, Respondent [CBW Bank] earned thousands and thousands in price revenue that it in any other case wouldn’t have earned if it had maintained an sufficient AML/CFT compliance program.”
In response to the FDIC, most of CBW Financial institution’s earnings got here from providing “fee-based correspondent banking companies for international monetary establishments (FFIs)” positioned in Africa, Central and South America, Europe and the Center East.
Following the imposition of the civil cash penalty (CMP), CBW Financial institution has filed a criticism in opposition to the FDIC in courtroom.
CBW Financial institution says,
“The penalty sought by the FDIC, is unreasonable and unprecedented for a financial institution of this measurement, complexity, and supervisory historical past. There is no such thing as a justifiable foundation for any CMP, not to mention for considered one of this magnitude given the conduct at difficulty on this case.”
Per the US banking trade data platform, BankRegData, CBW Financial institution has total assets of $73.665 million.
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