Union Bank of California prepares for possible regulatory sanctions
On July 19, 2007, UnionBanCal Corporation, the holding company for Union Bank of California, issued a press release to disclose that it has reserved $10 million for possible regulatory fines and penalties for Bank Secrecy Act /Anti-Money Laundering (BSA/AML) violations.
In 2005, the bank had an agreement with the Office of the Comptroller of the Currency (OCC) to cure BSA/AML weaknesses. Now it announced having committed substantial resources in order to resolve issues raised by regulators. Also, Union Bank of California informed that it faced possible penalties both from the OCC and the financial Crimes Enforcement Network (FinCEN), a part of the US Treasury Department.
In accordance with the press release, “the Bank has been advised by the OCC that the OCC will institute a procedure for a cease and desist order against the Bank with respect to its BSA/AML controls and procedures and will assess civil money penalties with respect to BSA/AML mattersâ€. It has received notice from the FinCEN that it is going to access civil money penalties on BSA/AML matters. Although the bank is not aware of what final terms, conditions or monetary penalties will be imposed by the agencies, it believes these will not affect the business operations, earnings, capital or liquidity. So, the Bank established a reserve of $10 million.