USAA fined $140 million for controlling money laundering

Federal regulators have fined the USAA Federal Savings Bank, a century-old institution that deals primarily with members and veterans of the US military, for failing to comply with anti-money laundering laws.

The Office of the Comptroller of the Currency and the US Treasury’s Financial Crimes Enforcement Network, known as FinCEN, announced the action Thursday in separate statements.

The Comptroller of the Currency fined USAA $60 million and ordered it to take immediate action to improve its monitoring of customers for suspicious activity. FinCEN imposed an $80 million fine, saying the bank had an ineffective anti-money laundering program for at least five years, from 2016 to 2021, and failed to heed warnings from regulators regarding the problem.

Banks play a central role in the ability of federal authorities to track and punish criminal financial activity. They are required to strictly monitor their clients’ transactions and report anything that looks suspicious, such as withdrawals of large sums of money or attempts to transfer funds to known criminals. The USAA failed to report thousands of suspicious transactions accurately and quickly, including transactions in personal accounts used for apparent criminal activity, FinCEN said.

“While its customer base and revenues have grown in recent years, the USAA FSB has deliberately failed to ensure its compliance program keeps pace, resulting in millions of dollars in suspicious transactions flowing through the system. U.S. financier without proper reporting,” Acting FinCEN Director Himamauli Das said. , said in a statement. The bank “was given adequate notice and opportunity” to correct its anti-money laundering controls, he added, “but repeatedly failed to do so.”

The USAA said Thursday it had not built its anti-money laundering capabilities and expertise enough to meet federal requirements, but was cooperating with the Office of the Comptroller of the Currency.

“While the issues identified in these orders did not cause any harm to individual members, we understand the importance of these requirements,” said bank chief executive Wayne Peacock. “USAA has already made progress in many critical areas by investing in new systems and training, building staff and expertise, and improving our processes. And we have an unwavering commitment to the military community.

James V. Hayes