As I observed this past March, "I would expect that being a BSA Officer would be as much fun these days as being a jihadist caught in an open field in Iraq under a full moon with an Apache attack helicopter hovering over your right shoulder." Add a Texas bank to the list of testifiers to that truth.
T Bank’s failure to meet regulators’ standards for keeping watch for suspicious transactions has landed it more scrutiny and a higher capital requirement.
In response, the 3-year-old North Dallas bank plans to raise an additional $8 million and beef up its audit procedures. The bank already has cut ties with several customers due to concerns raised by the Office of the Comptroller of the Currency/p>
Bank President Patrick Adams declined to comment. But in securities filings, the bank stated it had ended relationships with “customers who were primarily engaged in Internet product sales and a merchant processor who processed payments for those customers.”
[...]
Bank industry groups have complained that requirements under the USA Patriot Act and Bank Secrecy Act are too onerous, and hold the same expectations for billion-dollar institutions and small community banks.
Yes, they do, especially for "small community banks" that service businesses that who process payments for customers around the world. That sort of client requires greater scrutiny than the local John Deere dealer. On the other hand, the complaint's valid, because it requires a big investment in time, technology and money to act as the right arm of law enforcement in stopping money laundering and other nefarious financial crimes. It's an especially galling task when the Feds refuse to act on the vast majority of the suspicious activities that are reported.
The article's author claims that T Bank is "the sole Dallas-Fort Worth bank so far this year to become the subject of a regulatory order from the Comptroller’s Office." That may be true as to formal enforcement actions, but it's "highly doubtful" that there are no other Dallas-Fort Worth national banks who have not been criticized with respect to BSA and anti-money laundering compliance. BSA compliance is a thorn in the side of almost every bank.
We said last week, things are getting hinky with the regulators, and T Bank's problems are further evidence of it.
“They’re tightening up, there’s no doubt about it,” said Chris Kelly, a litigation consultant and former banker with Hill Schwartz Spilker Keller LLC in Dallas.
Smaller banks are an especially likely target, he says.
Yet another nightmare to keep community bankers sleepless. As if they needed any more of those.
