Money
Fed hits American Express with AML enforcement action over suspicious activity failures
By Bear Creek Staff, . Bear Creek Capital Network.
The Federal Reserve announced Thursday that it has taken a formal enforcement action against American Express Company, targeting the firm's handling of suspicious activity linked to money laundering. The Fed's announcement identified two distinct problems: the company's failure to catch and flag certain suspicious transactions, and broader structural weaknesses in how its enterprise-wide anti-money laundering program was being run.
The deficiencies were concentrated at American Express's subsidiary national bank. Because that bank's primary federal regulator is the Office of the Comptroller of the Currency rather than the Fed, the OCC issued its own separate enforcement action against the bank on the same day. The Fed's action covers the parent company.
The Fed stated that its action is intended to bring American Express Company into full compliance with U.S. laws and regulations. No financial penalty figure was disclosed in the announcement.
For compliance officers and risk managers watching this space, the dual-regulator structure here is the detail that matters most. When a bank holding company and its subsidiary bank each draw a simultaneous enforcement action from their respective regulators, the remediation burden falls on both entities independently. American Express will need to satisfy the Fed at the holding company level while its bank subsidiary works through the OCC's separate requirements. Those two tracks do not automatically resolve together, and the timelines can diverge.
The Fed's focus on the enterprise-wide program, rather than a single product line or transaction type, suggests the examiners found systemic gaps rather than isolated failures. That framing typically signals a more demanding remediation process: the firm cannot point to one business unit, fix it and close the matter. It has to demonstrate that controls work across the whole organization.
What the announcement does not establish is the volume or dollar value of the suspicious activity that went undetected, the time period covered by the examination, or what specific changes American Express has already made or committed to make. Those details, if they emerge, would come through the formal written agreement or consent order, which had not been published at the time of the Fed's press release.
Source: https://www.federalreserve.gov/newsevents/pressreleases/enforcement20261008a.htm
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