Credit Suisse settles AML compliance failures with Federal Reserve

On December 22, 2020, the Federal Reserve Bank of New York and the New York State Department of Financial Services entered into a settlement with Credit Suisse Group AG and three of its subsidiaries for anti-money laundering and Bank Secrecy Act compliance failures. 

According to the settlement, the regulators identified deficiencies in Credit Suisse’s New York branch’s compliance risk management program, particularly in the BSA/AML compliance function administered by ServeCo, a New York subsidiary of Credit Suisse Services USA, LLC that provides BSA/AML operational support to the bank.  

The settlement agreement requires Credit Suisse’ board of directors and the board and risk committees of the bank’s US entity to submit a written BSA/AML oversight program within 90 days of the settlement; the program must provide for a sustainable governance framework designed to enhance supervision and implementation of BSA/AML compliance policies, procedures and controls, and include eight items to improve the consolidated framework for BSA/AML compliance across the bank’s US operations – specifically, measures to ensure:

1. appropriate and effective oversight and reporting structures, including with regard to ServeCo;
2. that ServeCo and other BSA/AML service providers are adequately identified, documented and monitored, including the providers’ duties and responsibilities, the scope and frequency of assessments of BSA/AML controls conducted by the providers, and procedures for the escalation of compliance matters;
3. the maintenance of accurate and comprehensive customer and transactional data;
4. that reporting and oversight mechanisms provide a system of internal controls designed to ensure BSA/AML compliance by all legal entities and units across the bank’s US operations;
5. the production of regular risk assessments pursuant to a comprehensive BSA/AML compliance risk assessment process;
6. the qualifications of persons or groups charged with carrying out the BSA/AML compliance function;
7. the establishment of procedures for periodic testing of compliance risk management policies, procedures and controls, and;
8. the establishment of interim measures to monitor and control BSA/AML risk until the improved policies mandated by the settlement agreement can be fully implemented.

The settlement also requires Credit Suisse to submit a revised customer due diligence program, a written suspicious activity monitoring and reporting program, a new written plan for periodic independent testing of the bank’s BSA/AML compliance by qualified independent parties, and the submission of quarterly progress reports to the Federal Reserve.

Federal Reserve press release | Written Agreement