On May 21, 2026, the U.S. Department of Treasury’s Office of the Comptroller of the Currency (“OCC”) announced that an enforcement action was launched against New York-based Community Federal Savings Bank (“CFSB”) after identifying deficiencies in its Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) compliance program. The concerns were based on an examination of the BSA/AML program as a whole and, according to the OCC, was “largely unrelated to customers involved in digital assets activities.”
According to the Consent Order, OCC investigators found that, while the Bank’s size and payment processing activity had increased significantly since 2020, including cross-border activities, the Bank’s controls and risk management processes were not sufficient with the level of risk and growth. The OCC indicated that the Bank’s compliance program failed to meet BSA requirements and included deficiencies such as systemic internal control breakdowns, weak independent testing, and weak BSA staffing. The Comptroller also found deficiencies in the Bank’s suspicious activity monitoring processes, including its use of an automated alert triage system that “auto-closed a very high percentage of all ingested alerts,” some of which should have been escalated for further review. Investigators also determined that the Bank’s customer due diligence program was ineffective due to the Bank’s inability to understand the nature of certain customers’ businesses and the purposes for certain transactions processed by the Bank. There were also various instances where the Bank “failed to determine whether it had correspondent accounts for foreign financial institutions to ensure compliance with the due diligence requirements under section 312 of the USA PATRIOT Act.”
In the Consent Order, the OCC ordered CFSB to appoint a Compliance Committee to ensure the Bank’s compliance with the order and a third-party Program Consultant to prepare a written BSA program assessment. The Bank was also ordered, among other things, to develop a written action plan to remediate the deficiencies identified by the OCC. While CFSD did not admit or deny the OCC’s findings, the OCC acknowledged that the Bank had already started to take corrective actions and had articulated commitments to address the deficiencies.
OCC News Release | Consent Order