Banking Law

Capital One to Pay $290 Million to Settle FinCEN Investigation

Jan. 15, 2021, 10:33 PM

Capital One Financial Corp. agreed to pay an additional $290 million to settle an investigation brought by the Treasury Department’s Financial Crimes Enforcement Network into its anti-money laundering program.

The lender previously paid $100 million to the Office of the Comptroller of the Currency over the matter, and is getting credit for that in a $390 million settlement with FinCEN announced on Friday. The Department of Justice and the New York District Attorney’s Office had already closed their investigations, which the bank has said focused on “certain former check casher clients of the commercial banking business” and its anti-money laundering program.

The matter involves oversight of the bank’s AML program from 2008 to 2014 and concerned a small portfolio of check-cashing businesses that Capital One inherited via an acquisition and exited in 2014, it said on Friday. The bank was fully reserved for this resolution, it said.

“We are pleased to fully resolve the last-remaining government inquiry,” Capital One said in a statement. “Capital One takes its anti-money laundering obligations very seriously.”

Unreported Transactions

FinCEN said the bank admitted it failed to maintain an effective anti-money laundering program, allowing “millions of dollars” in suspicious transactions to go unreported, including proceeds connected to organized crime, tax evasion, fraud and other financial crimes.

“Capital One willfully disregarded its obligations under the law in a high-risk business unit,” FinCEN’s Director Kenneth Blanco said in a statement. “Information received from financial institutions through the Bank Secrecy Act plays a critical role in protecting our national security, and depriving law enforcement of this information puts our nation and our people at risk. Capital One’s failures did just that.”

The bank has invested heavily in enhancing its AML program over the past several years. Capital One has worked closely with regulators and law enforcement to “ensure our compliance processes and protocols are robust and thorough,” according to the statement.

To contact the reporter on this story:
Jenny Surane in New York at jsurane4@bloomberg.net

To contact the editors responsible for this story:
Alan Goldstein at agoldstein5@bloomberg.net

Sally Bakewell, David Scheer

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

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