The U.S. Federal Reserve Board has issued an enforcement action against Bank of Montreal (TMX:BMO) over deficiencies in the anti-money laundering controls of its U.S. operations.
The Fed’s enforcement action indicates that the bank has entered into a formal agreement with the Office of the Comptroller of the Currency (OCC) designed to remedy deficiencies in its anti-money laundering compliance program, noting that the most recent examination by the Federal Reserve Bank of Chicago and the Illinois Department of Financial and Professional Regulation disclosed deficiencies in the Chicago branch’s risk management and compliance with anti-money laundering requirements.
It also found deficiencies with the firmwide compliance risk management program, and determined that the bank “lacked effective systems of governance and internal controls to adequately oversee the activities of Bank of Montreal’s U.S. operations with respect to legal, compliance, and reputational risks related to compliance with anti-money laundering requirements.”
The agreement includes a plan to commit adequate resources to operate an effective compliance risk management program; measures to ensure adherence to approved compliance policies, procedures, and standards; and, steps to improve board oversight. It’s also required to complete a review of the effectiveness of the anti-money laundering compliance program, prepare a written report of findings and recommendations, and submit the report and a plan for fulfilling it to the regulators within 90 days. Then, it must report on its progress each quarter.