Florida bank faces accusations due to anti-money laundering suspicions by the Office of the Comptroller of the Currency (OCC)
In a significant development, PNC Bank, based in Maitland, Florida, has been subjected to an enforcement action by the Office of the Comptroller of the Currency (OCC). This action, which spans across the Retail, Regulations & Policy, Technology, Risk, and Fintech sectors, comes as part of a series of similar actions against banks, reflecting a growing focus on third-party partnerships.
The exact nature of the violations that have led to this enforcement action remains undisclosed. However, PNC has agreed to revise its compliance with the Bank Secrecy Act and anti-money laundering rules, and to create a new BSA/AML action plan. This plan will be submitted to the OCC within 30 days of October 3.
In response to the enforcement action, PNC's senior former vice president and BSA/AML program head, Aleem Jackson, stated, "We take our responsibility to ensure our fintech partners maintain compliance with regulatory requirements seriously."
Last year, PNC forged a relationship with Cable, a tech company that automates compliance testing for banks and fintechs. In this context, it is worth noting that PNC has also purchased licensing rights for a compliance testing tool from Cable.
PNC's commitment to robust AML and CFT compliance is evident in its recent partnerships. In 2022, the bank partnered with open banking fintech Raisin to expand the reach of its savings products. Similarly, PNC has partnered with various fintech companies in recent years, focusing on digital banking and payment solutions. These partnerships have been established with stringent AML and CFT compliance measures to adhere to regulatory requirements.
Notably, PNC serves as the banking partner for immigrant-focused fintech Majority. The bank has not returned requests for comment regarding the enforcement action by press time.
In addition to the enforcement action, the bank has been ordered to share updated policies and procedures related to money laundering and terrorist financing risks within 60 days of the agreement. PNC must also submit updates on its progress every 30 days following the end of each quarter.
This enforcement action against PNC follows the OCC and other federal agencies' imposition of more than $3 billion in fines and an asset cap on TD Bank's U.S. operations. The implications of this action for the banking sector and the broader fintech industry are yet to be fully understood.
As the situation unfolds, PNC, like other financial institutions, will need to demonstrate its commitment to regulatory compliance and transparency. The bank has already taken steps towards this, with the purchase of a compliance testing tool and the creation of a new BSA/AML action plan. The coming months will be critical in determining the bank's path forward.
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