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Big banks are getting the regulatory cannon pointed at them again. This time, the Office of the Comptroller of the Currency is looking at how American banks have failed to properly monitor cash transactions that could have led to laundering.
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Officials who chose to remain anonymous said that federal and state authorities are set to begin an aggressive crackdown. In the wake of investigations into Standard Chartered and HSBC (NYSE:HBC), American banks like JPMorgan (NYSE:JPM), Citigroup (NYSE:C), and Bank of America (NYSE:BAC) are being scrutinized.
Last year, JPMorgan was accused of violating sanctions against Cuba and Iran. The bank processed about $178.5 million for Cuba between 2005 and 2006. In 2009, it made a $2.9 million loan to a bank tied to an Iranian shipping line owned by the government. JPMorgan paid $88.3 million to the Treasury Department to settle these issues.
Citigroup was issued a cease-and-desist order related to cash transactions in April. The company was accused of failing to recognize high-risk customers in “multiple areas of the bank.” Although the company has not admitted to doing anything wrong, it has adopted many of the required reforms.
Bank of America has not been formally accused of anything, but it is still in the spotlight. The increase in investigations comes now that regulators are being freed from dealing with issues related to the 2008 turmoil. Alma Angotti, a director at compliance consulting firm Navigant, said, “These issues may have been put on hold during the financial crisis, and now regulators can go back to focus on money-laundering and other compliance problems.”
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