US Fed orders Commerzbank to clean up anti-money laundering problems
WASHINGTON, Oct 17 (Reuters) - The U.S. Federal Reserve ordered Commerzbank AG and its U.S. branch on Thursday to hire an independent consultant to help the German bank clean up its internal anti-money laundering programs.
The Fed and the bank first entered into an agreement in June 2012 that required Commerzbank to improve compliance in its bulk cash transactions business.
On Thursday, regulators said an examination of other business lines at the U.S. branch found inadequate controls to guard against money laundering.
The Fed did not fine the bank but issued a cease-and-desist order requiring it to hire independent consultants to study its anti-money laundering programs and to review certain transactions conducted between May and October of 2012.
Regulators also urged the bank to improve its reporting of suspicious activities and to submit an enhanced program to ensure it follows anti-money laundering laws.
U.S. officials have stepped up enforcement of those laws lately, causing banks to compete with each other for compliance personnel as they scramble to improve their programs.
Total settlements for anti-money laundering violations amounted to $3.5 billion in 2012, compared with $26.6 million in the preceding year, according to the Association of Certified Anti-Money Laundering Specialists.
Commerzbank didn't admit or deny the Fed's allegations, according to the regulator.