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U.S. Supreme Court Limits State Regulatory Authority over Financial Institutions
By Matt Squire
printThe U.S. Supreme Court on Tuesday restricted state authority over financial institutions by ruling that Wachovia Corp.'s mortgage subsidiaries are not subject to Michigan regulations. In a 5-3 decision, the court said nationally chartered banks, which are regulated by the Office of the Comptroller of the Currency (OCC), and their subsidiaries are not subject to further regulation by the states. The ruling comes as federal lawmakers and regulators are pressuring mortgage lenders to address their business practices in light of the current subprime lending crisis. National foreclosures in January increased by 19 percent from the previous month and were up...
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A U.S. District Court judge Wednesday signed an order ending Wachovia Bank's deferred prosecution agreement with the U.S. Justice Department for failing to identify transactions potentially tied to drug cartels.
The U.S. Treasury Department is reportedly investigating the role of Wachovia Bank compliance staff in the financial institution's failure to sufficiently scrutinize more than $420 billion in transactions tied to Mexican currency exchange businesses.
If March's record penalty against Wells Fargo & Co. has reminded compliance departments of the bite of anti-money laundering regulatory fines, it has also been a reminder of something else. With acquisitions come problems.
Two U.S. companies paid a total of $200 million dollars this week for anti-money laundering (AML) and sanctions violations. On Wednesday, Wells Fargo Co. agreed to pay the United States $160 million and the next day a Delaware corporation paid $40 million.
Wells Fargo & Co., the parent company of Wachovia Bank, will pay $160 million to settle anti-money laundering compliance problems tied to accounts with Mexican currency exchange companies, the company said Wednesday.
An expected settlement between the U.S. Justice Department and Wachovia Bank over lax anti-money laundering policies is highlighting the compliance risks of doing business with Mexican currency exchange companies.
The Supreme Court is likely to reverse a decision by a lower court that deemed parts of the country's counterterrorism laws unconstitutional and overly vague, say former federal investigators.
Banks that merge or consolidate risk regulatory reprimands if they choose to scale back their anti-money laundering protections in the process, say consultants.
Wachovia Bank will pay up to $125 million to compensate victims of a telemarketing fraud conducted through accounts at the bank and a $10 million civil penalty under agreements reached with the Office of the Comptroller of the Currency.
Wachovia Bank, which U.S. authorities have connected to a Mexican exchange house allegedly involved in a money laundering operation, is terminating its correspondent relationships with all money services businesses based outside the United States.
The U.S. Justice Department is seeking the forfeiture of $110 million in proceeds from an allegedly corrupt Italian bankruptcy case.
In a June 5 letter to the U.S. Drug Enforcement Administration, Miami attorney Frank Rubino, who represents Casa de Cambio Puebla, said federal agents on May 16 seized the companys funds deposited at a Miami branch of Wachovia Bank.
The sanctions put pressure on U.S. banks to conduct greater due diligence on correspondent accounts to determine if they are linked to the Middle Eastern nation. That will likely continue a trend of foreign institutions dropping business dealings with the country.