Bank of America agreed to consent order with OCC over Bank Secrecy Act deficiencies

Bank of America (BAC-1.32%) agreed to a consent order with the Officer of the Comptroller of the Currency on Monday to address deficiencies in its anti-money laundering practices.

The second-largest U.S. bank by assets agreed to address failures related to the timely submission of suspicious activity reports and correct a previously identified deficiency related to its customer due diligence processes, the OCC said in a release.

Bank of America did not admit or deny the allegations, and it did not receive a monetary penalty. Instead, the Charlotte, North Carolina-based company will have to take a number of steps to strengthen its compliance with the rules. These include outlining plans for investigating new customers and conducting risk assessments, as well as hiring an independent consultant to ensure that suspicious activity is accurately reported.

“We have worked closely with the Office of the Controller of the Currency over the past year to make improvements to our anti-money laundering and sanctions programs,” Bank of America said in a statement. “The work we’ve done so far positions us well to implement the requirements of the consent order.”

These activities fall under the requirements of the Bank Secrecy Act, which was first established in 1970 to guide financial institutions on the detection and prevention of money laundering through their systems, also known as Anti-money laundering legislation or AML. By law, all financial institutions follow a set of guidelines known as KYC (Know Your Customer/Client) – a process these firms use to verify the identity and risks of potential clients.

The OCC also said it found deficiencies in Bank of America’s internal controls, governance, independent testing and training components of its BSA compliance program.

In a quarterly regulatory filing in October, the bank said it had been — and plans to continue — implementing improvements to Bank Secrecy Act programs. Based on discussions with regulators, the bank said it does not expect the issues related to these programs to have a material adverse financial impact.

This comes just over two months after TD Bank (TD+0.04%) was hit with one landmark punishment over its inability limit financial crime in its systems. In October, Canada’s second-largest bank became the largest in U.S. history to plead guilty to Bank Secrecy Act program failures and the first to plead guilty to conspiracy to commit money laundering.

Over six years, TD Bank failed to monitor $18.3 trillion in customer activity in the United States. In its plea agreement, TD Bank admitted that this allowed three money laundering networks to transfer over $670 million through the bank’s accounts.

The bank said yes pay a record $1.3 billion to the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN. The Office of the Comptroller of the Currency struck a cease and desist order and a $450 million civil penalty at TD Bank on Thursday over its inadequate Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance program. And the Federal Reserve Board imposed one $123.5 million in fines.