US Banking Regulator FDIC Hits Bank With $20,448,000 Penalty – About a Quarter of the Lender’s Total Assets

The Federal Deposit Insurance coverage Company (FDIC) is penalizing a Weir, Kansas-based financial institution with a financial penalty equal to over 1 / 4 of the lender’s whole property.

The U.S. banking regulator says it has decided that CBW Financial institution has failed to keep up an “satisfactory anti-money laundering/anti-terrorist financing (AML/CFT) compliance program” and is subsequently imposing a fined $20.448 million for the violations that occurred between December 2018 and August 2021.

“Throughout the evaluation interval, defendant [CBW Bank] additionally (1) didn’t file a whole bunch of suspicious exercise stories (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 in anti-money laundering and anti-terrorist financing measures helped generate a good portion of its income.

“By the [Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) compliance] errors described above, defendant [CBW Bank] earned hundreds of thousands in fee earnings that it might not in any other case have earned if it had maintained an satisfactory AML/CFT compliance program.”

In response to the FDIC, nearly all of CBW Financial institution’s revenues got here from offering “fee-based correspondent banking providers to international monetary establishments (FFIs)” in Africa, Central and South America, Europe and the Center East.

Following the imposition of the civil financial penalty (CMP), CBW Financial institution filed a grievance 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 dimension, complexity and regulatory historical past. There is no such thing as a justifiable foundation for a CMP, not to mention a CMP of this magnitude, given the conduct at problem on this case.”

In response to US banking trade data platform BankRegData, CBW Financial institution has whole property of $73.665 million.

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