October 12, 2020

Federal Reserve finds state bank deficient in AML/OFAC compliance

On October 1, 2020, The Federal Reserve Board announced the settlement of an enforcement action against Atlantic Community Bankers Bank of Camp Hill, Pennsylvania.  The FRB identified deficiencies in the bank’s compliance with the Bank Secrecy Act and the rules and regulations promulgated thereunder, the anti-money laundering requirements of Regulation H of the Board of Governors of the Federal Reserve System, and applicable regulations issued by the Office of Foreign Assets Control of the US Department of the Treasury.

The settlement requires that the bank engage an independent third party to validate the bank’s transaction monitoring system and prepare a written report of findings and recommendations.  The settlement further requires that the bank submit a written BSA/AML and OFAC compliance plan that incorporates specific measures to be taken by the bank’s board of directors, audit committee, senior management and compliance cadre to ensure compliance with the law and regulations and the bank’s policies and procedures.  The bank must submit an enhanced compliance program to the FRB within 60 days that includes a comprehensive risk assessment, lays out the bank’s system of internal controls, provides for enhanced independent testing procedures, and engages a qualified compliance officer who is given autonomy and responsibility for implementing and maintaining an effective BSA/AML compliance program.  The settlement also requires the bank to submit plans for suspicious activity monitoring and reporting, for transaction monitoring, for independent testing, and revised customer due diligence and internal audit programs acceptable to the FRB.  The bank must also submit an enhanced OFAC compliance plan that incorporates enhanced OFAC screening procedures, an improved sanctions risk assessment plan, and enhanced OFAC policies and procedures.

The bank’s compliance will be demonstrated by the submission of quarterly progress reports submitted to the FRB for the duration of the agreement. 

 FRB press release | Enforcement Action