The Federal Reserve Board on Thursday announced an enforcement action against American Express Company over, among other issues, the company’s failure to adequately detect and report certain suspicious activity related to money laundering.
The board also identified significant deficiencies in the implementation of American Express’ enterprise-wide anti-money laundering program, particularly at its subsidiary, American Express National Bank.
The Office of the Comptroller of the Currency (OCC) on Thursday ordered American Express National Bank to pay a $350 million civil money penalty over deficiencies in its anti-money laundering compliance program. The regulator also issued a cease-and-desist order against the bank, citing systemic failures in monitoring and reporting suspicious transactions that resulted in approximately $13 billion in suspected trade-based money laundering activity not being adequately identified, evaluated and reported over the past decade.
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Separately, the Federal Reserve Board issued a cease-and-desist order against American Express Company and American Express Travel Related Services Company Inc. over deficiencies in the company’s enterprise-wide anti-money laundering program, particularly at its national bank subsidiary. The Federal Reserve’s announcement did not impose an additional monetary penalty.
“The OCC expects banks of American Express’s size and complexity to devote sufficient resources to ensure compliance with laws and regulations designed to detect and prevent money laundering, which are critical to both economic and national security,” Comptroller of the Currency Jonathan Gould said in a statement.
According to the OCC, American Express focused on risks associated with its relatively narrow range of deposit products while devoting insufficient attention to its much larger credit card business. The regulator also identified shortcomings in customer due diligence and identity verification programs.
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American Express CEO Stephen Squeri said in a statement that the bank was “fully committed” to addressing the regulators’ concerns and continuing to strengthen its compliance measures.
“While we have made meaningful progress, we know there is more work to do,” Squeri said. He added that the penalty and the costs of meeting the regulators’ requirements were not expected to affect the company’s financial guidance for 2026 and 2027.
However, according to Reuters, American Express neither admitted nor denied the allegations.
American Express had raised its full-year revenue growth guidance to 10% after reporting second-quarter earnings that exceeded analyst expectations. The company posted earnings per share of $4.53 and total revenue of $19.6 billion. Its full-year earnings-per-share guidance stood at $17.30 to $17.90.