Fed Looking Closely at Foreign Banks’ AML Efforts When Reviewing Charter Applications

By Brian Orsak

The Federal Reserve is increasingly looking to the anti-money laundering practices and legal expectations of foreign banks in approving applications to open U.S. branches, applications with the Fed show. The Fed, the banking regulator with primary responsibility for granting foreign banks approval to do business in the U.S., signed off on branch licenses for India-based ICICI Bank in October and China-based China Merchants Bank Co. last week. The latter, the fifth-largest bank in China, is the first Chinese bank to be allowed to open a U.S. branch since the country's communist revolution in 1949. In its assessment of both banks'...