The U.S. regulator of national banks has begun stress testing midsize financial institutions for adequate safety and soundness controls, including anti-money laundering and sanctions checks, say financial lobbyists and compliance officers.
Reaching the point where an off-limits, high-risk jurisdiction becomes bankable is a complex compliance process involving many factors, including political and economic stability, country reports by international watchdogs and old-fashioned shoe leather, say former bankers and consultants.
The OCC has asked financial institutions to submit comments about the data collection system, which the agency says is designed to "enhance the ability of examiners and bank management" to identify money laundering risks in bank products, services, customers and locations.
The Federal Reserve and New York State Banking Department entered into a written agreement with Sumitomo Mitsui Banking Corp. on Wednesday ordering its New York branch to improve Bank Secrecy Act compliance deficiencies a month after another Japanese bank was cited for risk management deficiencies.
Lisa Arquette, associate director of the FDIC's Anti-Money Laundering and Financial Crimes Branch, says examiners are conducting fewer risk assessments as more banks prepare their own.
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