The Federal Reserve fined Deutsche Bank $186 million on Wednesday, saying it moved too slowly to fix problems with the bank’s money-laundering controls that the bank regulator cited in 2015 and 2017.
“Deutsche Bank made insufficient remedial progress” in complying with those orders, which it agreed to, the Fed said in a statement.
In fining the bank, the Fed issued a new order asking Deutsche to “prioritize completing” the controls it was supposed to have imposed under previous orders.
The central bank said the action was necessary because while the bank has made some progress in putting in place better controls, I remained exposed to elevated levels of compliance risk” when it comes to detecting money laundering or violations of US sanctions.
deutsche, in the current situationHe said the Fed’s action relates to “our historic delay in adhering to legacy enforcement procedures and agreements.” But the bank said it had taken steps to strengthen its money-laundering controls, including adding staff to its team that cracks down on financial crimes.
Deutsche has a troubled history with regulators and prosecutors. Over the past decade, the bank has been slapped with a number of penalties and heavy fines for failing to crack down on money laundering and for allegations of enabling tax abuse, price fixing and foreign bribery. In 2017, the bank reached a $7.2 billion civil settlement with federal prosecutors over its sale of toxic mortgage products in the run-up to the 2008 financial crisis. The bank also paid a $150 million fine to a Bank of New York regulator in 2020, in part over its banking relationship with disgraced financier Jeffrey Epstein.
The Fed’s orders in 2015 and 2017 stemmed from Deutsche’s relationship with the Estonian branch of Danske Bank, which also caused conflicts with authorities.
Bank regulators found that in its dealings with Danske Bank, Deutsche did not properly monitor transactions involving high-risk clients. Deutsche ceased operations with Danske in Estonia in 2015.
Last year, Danske, Denmark’s largest bank, pleaded guilty to charges stemming from a long-running money laundering investigation. The bank also agreed to pay a $2 billion fine.