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RESULTS FOR: Financial Crime Consulting

Payoneer OFAC Settlement Provides Direction for Fintech Compliance Officers

October 14, 2021 | Financial Crime Consulting test

The regulatory landscape for fintechs is continually evolving. It is critical that compliance officers stay on top of what is going on in the industry to ensure they make the best decisions and take proactive measures in alignment with current regulations. The recent OFAC settlement with Payoneer, Inc. for apparent violations of multiple sanctions programs is an excellent case study for compliance officers with fintechs and payment processors to heed when enhancing their compliance programs.

For those not familiar with … Read More

FinCEN’s Assessment on the Use of No-Action Letters—What Happens Next?

July 26, 2021 | Financial Crime Consulting

On June 30, 2021, the Financial Crimes Enforcement Network (“FinCEN”) finished an assessment of whether it should create a process for issuing no-action letters in connection with the Bank Secrecy Act (“BSA”) and other anti-money laundering and countering the financing of terrorism (“AML/CFT”) laws and regulations. The short answer is Yes—FinCEN has concluded that a no-action letter process would be valuable, and the agency will be taking steps towards a rulemaking.

A no-action letter is a letter from an agency … Read More

5 Tips to Best Position Your Fintech for a Banking Charter License Application

March 23, 2021 | Financial Crime Consulting Risk + Compliance

Recently, several financial technology (“Fintech”) organizations have applied for – and been granted – banking charter licenses. For example, in May 2019, Grasshopper was approved for a charter issued by the Office of the Comptroller of the Currency, while in July 2020, Varo Money was approved for a national bank charter.

As mentioned in an earlier post, in March, Square, Inc. (“Square”) announced that it had commenced banking operations under its independently governed subsidiary industrial bank, Square Financial Services … Read More

The Unique Advantages Fintechs Have When Expanding into Banking Operations – A Trend is Underway

March 12, 2021 | Financial Crime Consulting Risk + Compliance

On March 1, 2021, Square, Inc. (“Square”) announced that it had commenced banking operations under its independently governed subsidiary industrial bank, Square Financial Services (“Square Financial”). The announcement comes after Square successfully completed the charter approval process with the Federal Deposit Insurance Corporation (“FDIC”) and the Utah Department of Financial Institutions for an Industrial Bank/Industrial Loan Corporation (“ILC”) license. Square Financial will offer business loan and deposit products, beginning with underwriting and originating business loans for Square’s existing sellers who … Read More

Bank Secrecy Act Modernization Likely to Increase BSA/AML Enforcement, Including From Larger Whistleblowing Awards

January 13, 2021 | Financial Crime Consulting

2020 saw a substantial amount of enforcement activity in the BSA/AML/OFAC area.   Even prior to last month’s enactment of the Anti-Money Laundering Act of 2020 (the “2020 AMLA”), conventional wisdom favored an increase in enforcement activity by regulators and prosecutors for violations of laws in these areas under the incoming Biden Administration. [See Division F]

The 2020 AMLA just gave this area of enforcement a significant shot in the arm.  In an era where federal legislation has become … Read More

Received a World Bank Audit Letter? Here’s What to Do.

November 11, 2020 | Compliance Financial Crime Consulting

In its recently issued Sanctions Systems Annual Report FY 2020, the World Bank Group (WBG) confirmed its commitment to investigate and sanction corruption and fraud occurring in bank-financed projects, despite the unprecedented challenges of the COVID-19 pandemic.  The report, co-authored by the Integrity Vice Presidency (INT), the Office of Suspension and Debarment (OSD), and the Sanctions Board, revealed little coronavirus-related slowdown in the WBG’s enforcement activities.  To the contrary, the bank’s in-house investigatory teams initiated roughly the same number of … Read More

Evolution of the NYDFS Virtual Currency Licensing Regime

July 23, 2020 | Compliance Financial Crime Consulting

In the Summer of 2015, the New York State Department of Financial Services (“DFS”) became the first state banking regulator to issue a stand-alone virtual currency regulatory framework (23 NYCRR Part 200).  Prior to the creation of this virtual currency license, also known as the “Bitlicense,” institutions followed different paths to seek approval from the DFS for their crypto-related activities involving New York or New York residents.  Some institutions, like Paxos Trust Company, LLC (f/k/a itBit Trust Company, LLC) and … Read More

Deutsche Bank Sanctioned in Connection with Jeffrey Epstein Banking Relationship

July 9, 2020 | Compliance Financial Crime Consulting

The New York Department of Financial Services (“NYDFS”) recently sanctioned Deutsche Bank (“DB”) $150 million for BSA/AML deficiencies.  According to the regulator’s factual findings, the compliance failures arose in connection with the bank’s private wealth relationship with Jeffrey Epstein, and correspondent banking relationships with Danske Bank Estonia (“Danske Estonia”) and FBME Bank (“FBME”), both located in Eastern Europe.

This latest enforcement action against DB follows several others issued against the bank by NYDFS since 2015, including for improper conduct arising … Read More

NYDFS to Industry: NY Means Business When it Comes to Having a License to do Business

April 24, 2020 | Compliance Financial Crime Consulting

The New York State Department of Financial Services (NYDFS) has taken several high-profile enforcement steps in recent months against entities alleged to have taken advantage of doing business in New York State without the necessary regulatory license.  Enforcement activity against the National Rifle Association (NRA), Athene Holding Ltd., as well as Trinity Healthshare and Aliera, serve as reminders that NYDFS takes very seriously the obligation to abide by New York statutory licensing requirements.

This is for good reason — businesses … Read More

NYDFS Issues Enforcement Action Against the Industrial Bank of Korea

April 21, 2020 | Compliance Financial Crime Consulting

The New York State Department of Financial Services yesterday issued an enforcement action against the Industrial Bank of Korea (“IBK”) for violations of New York’s anti-money laundering and recordkeeping obligations. It is the first of these type of BSA/AML enforcement actions issued by the Department in some time; this is not surprising, given that NYDFS, like other regulators, has been consumed with responding to the COVID-19 pandemic.

Significant elements of the Consent Order include:

  • a $35 million penalty to be
Read More