USB US Bancorp

By Rachel Louise Ensign 
 

U.S. Bancorp said it entered into a consent order last month with the Office of the Comptroller of the Currency over alleged anti-money-laundering deficiencies.

The Minneapolis-based bank said in a securities filing Wednesday that it entered into the order with the regulator Oct. 23 that involved "deficiencies in its Bank Secrecy Act/anti-money laundering compliance program" and requires an ongoing review of that program.

Under such orders, the regulator typically alleges that a bank has inadequate controls to keep out dirty money and the bank agrees to take steps to bolster such controls. In similar agreements, other banks did not admit or deny the regulator's allegations.

Anti-money-laundering laws require banks to have a system to detect and prevent money laundering. These laws have been enforced more strongly in the last five years and a number of major fines for deficiencies at big banks have led other lenders to focus on anti-money-laundering compliance.

"U.S. Bank embraces the highest standards of compliance and we continuously explore ways to improve our processes across the enterprise to benefit all of our customers," a bank spokesman said. "We will continue to work closely with the OCC to resolve their concerns as expeditiously as possible."

U.S. Bank's disclosure comes after the lender has said it is bolstering spending on compliance. In the third quarter, the bank said noninterest expense rose more than 6% from the year prior in part due to higher staffing for risk and compliance activities. The bank said in its filing that it has already made some of the compliance enhancements required by the consent order.

"We have gone from baggage handlers to pilots," U.S. Bank Chief Executive Richard Davis said on the earnings call, referring to the regulators' heightened compliance expectations of bank employees. "Baggage handlers, every once in a while, make a mistake. And up until now, it's okay; no one loses their life, but pilots in the same company can't crash a plane."

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(END) Dow Jones Newswires

November 05, 2015 10:38 ET (15:38 GMT)

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