Wells Fargo Ordered to Fix Financial Crime Controls by Regulator

Regulator Demands Wells Fargo Address Anti-Money Laundering and Sanctions Flaws

The Office of the Comptroller of the Currency (OCC) has issued a consent order requiring Wells Fargo to overhaul its financial crime compliance program, including its anti-money laundering (AML) and sanctions controls.

Lax Oversight and Inadequate Staffing: Root of the Problem

The OCC found that Wells Fargo's program suffered from weak oversight, insufficient staffing, and outdated technology. These deficiencies allowed high-risk customers to evade detection and engage in suspicious transactions.

Specific Flaws Identified by the Regulator

The consent order highlights specific weaknesses in Wells Fargo's compliance program:

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• Insufficient customer due diligence, enabling high-risk customers to open accounts without proper screening.

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• Inadequate transaction monitoring, failing to detect suspicious activities that could indicate money laundering or sanctions violations.

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• Limited risk assessments, underestimating the potential for financial crime and failing to allocate resources accordingly.

Timeline for Compliance and Consequences

Wells Fargo has two years to implement the required changes. Failure to comply could result in further enforcement actions, including fines and restrictions on the bank's operations.

Industry Implications and Widespread Concerns

The OCC's order against Wells Fargo serves as a warning to other banks about the importance of robust financial crime compliance programs. It highlights the growing scrutiny of banks' ability to prevent and detect financial crimes, particularly in light of increasing sophisticated criminal methods.

Commitment to Compliance and Customer Protection

Wells Fargo has stated its commitment to addressing the deficiencies identified by the OCC. The bank's CEO has emphasized the importance of customer protection and the need to maintain a strong compliance culture.