Latest FDIC Consent Order Also Focuses on BSA (June 19, 2014)
The FDIC has issued another consent order for a company with significant prepaid business and again the focus is on Bank Secrecy Act (BSA) compliance. Discover Financial Services last week announced its subsidiary Discover Bank has entered into a consent order with the FDIC and has agreed to, among other things, implement a revised Bank Secrecy Act compliance program. The bank has not admitted or denied any charges of unsafe or unsound banking practices or violations of law or regulation relating to weaknesses in the bank’s BSA compliance program.
The order does not include civil money penalties nor does it restrict Discover from booking new business. Under the agreement, Discover has committed to:
- Review and enhance customer due diligence and risk assessment processes;
- Review past account activity to determine whether suspicious activity was properly identified and reported;
- Strengthen internal controls, including augmenting board oversight regarding BSA activities, and establish an independent testing program, and develop policies and procedures to govern staffing and training for BSA compliance.
The order notes that all product lines, services, customers and transactions of the bank must be monitored for suspicious activity, including, but not limited to: credit card activity, consumer loans, private student loans, deposit and cash activity, monetary instruments, gift cards, international and domestic wire transfers, Automated Clearing House and ATM transactions.
“Our mutual agreement on the consent order calls for additional enhancements to the programs we have in place in order to meet heightened regulatory requirements,” the company said. “Discover is committed to continuously making our compliance program stronger, including our policies, procedures, training and other internal controls designed to mitigate inherent risks in our business.”