Federal Reserve Board fines Deutsche Bank with $186m over AML failures

Deutsche Bank
Credit: Vytautas Kielaitis / Shutterstock

The Federal Reserve Board has issued a $186m (£145m) fine to Deutsche Bank AG and its New York branch over failures to comply with AML regulations. 

According to the Reserve’s Board, the fine is a response to Deutsche Bank performing “unsafe and unsound practices” on US soil by violating its agreements under the Board’s 2015 and 2017 consent orders in regards to sanctions compliance and AML controls. 

Deutsche Bank has been alleged of not showing sufficient progress under these two consent orders, exhibiting “deficient” internal controls and governance processes, including failure to prioritise the completion of several “critical” requirements outlined by in the Board’s prior orders. 

More details revealed that a written agreement has been achieved between Deutsche Bank and the US government highlighting the need for improvement in the financial institution’s governance, risk management, and controls. 

In a separate statement, Deutsche Bank commented: “We are committed to maintaining robust risk management programs with a special emphasis on Anti-Financial-Crime and Compliance controls. 

“The Written Agreement and the Consent Order with the Federal Reserve relate to our historic tardiness in adhering to older enforcement actions and agreements, as well as a correspondent banking relationship we exited in 2015. 

“We appreciate that the Federal Reserve recognises the progress we have made in recent years in remediating and resolving control weaknesses. We also recognise that these actions reinforce the need to ensure we stand by our commitments and close our remediation obligations in the near future.

“As part of this work, we have taken several actions, including extensive enhancements to our client due diligence and transaction monitoring, and significantly invested in controls since 2019 to enhance our effectiveness and increase the size of our global Anti-Financial Crime team by more than 25 percent – to more than 2,000 employees. 

“Given the momentum we have built in the last two years, we believe we are well positioned to meet our regulators’ expectations. The imposed fine is in large part covered by provisions taken in previous quarters, with the remainder being within the bank’s published cost guidance for the second quarter.”