The Federal Deposit Insurance Corporation (FDIC) is penalizing a Weir, Kansas-based bank with a monetary penalty equal to over a quarter of the lender’s total assets.
The U.S. banking regulator says it has determined that CBW Bank has failed to maintain an “adequate anti-money laundering/anti-terrorist financing (AML/CFT) compliance program” and is therefore imposing a fined $20.448 million for the violations that occurred between December 2018 and August 2021.
“During the assessment period, defendant [CBW Bank] also (1) failed to file hundreds of suspicious activity reports (SARs), (2) lacked an appropriate risk-based customer due diligence process, and (3) maintained an inadequate due diligence program for FFI correspondent accounts.
According to the FDIC, CBW Bank’s laxity in anti-money laundering and anti-terrorist financing measures helped generate a significant portion of its revenue.
“By the [Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) compliance] errors described above, defendant [CBW Bank] earned millions in commission income that it would not otherwise have earned if it had maintained an adequate AML/CFT compliance program.”
According to the FDIC, the majority of CBW Bank’s revenues came from providing “fee-based correspondent banking services to foreign financial institutions (FFIs)” in Africa, Central and South America, Europe and the Middle East.
Following the imposition of the civil monetary penalty (CMP), CBW Bank filed a complaint against the FDIC in court.
CBW Bank says:
“The penalty sought by the FDIC is unreasonable and unprecedented for a bank of this size, complexity and regulatory history. There is no justifiable basis for a CMP, let alone a CMP of this magnitude, given the conduct at issue in this case.”
According to US banking industry information platform BankRegData, CBW Bank has total assets of $73.665 million.
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