Capital One has been given a $390 million penalty by the US Financial Crimes Enforcement Unit (FinCEN) over violations of the Bank Secrecy Act (BSA.)

The bank holding business admitted to wilfully failing to implement and maintain an effective anti-money laundering programme.

The company also admitted that it failed to file thousands of suspicious activity and currency transaction reports.

FinCEN said that the violations, which happened between 2008 and 2014, had caused millions of dollars in suspicious transactions to go unreported in a timely and accurate manner, including proceeds connected to organised crime, tax evasion, fraud, and other financial crimes laundered through the bank into the U.S. financial system.

“The failures outlined in this enforcement action are egregious,” said FinCEN’s director Kenneth A. Blanco. “Capital One wilfully disregarded its obligations under the law in a high-risk business unit.

He added: “Information received from financial institutions through the Bank Secrecy Act plays a critical role in protecting our national security, and depriving law enforcement of this information puts our nation and our people at risk.”

He said that Capital One’s “egregious failures” allowed known criminals to use and abuse the US financial system unchecked, fostering criminal activity and allowing it to continue and flourish at the expense of victims and other citizens.

“These kinds of failures by financial institutions, regardless of their size and believed influence, will not be tolerated,” said Blanco. “Today’s action should serve as a reminder to other financial institutions that FinCEN is committed to protecting our national security and the American people from harm and we will bring appropriate enforcement actions where we identify violations.”

A spokesperson from Capital One said: “We are pleased to resolve this matter, which involves AML oversight from 2008-2014 relating to a small portfolio of check-cashing businesses that Capital One inherited as part of an acquisition and subsequently exited in 2014.

"We previously resolved related issues with our primary regulator, the Office of the Comptroller of the Currency (OCC), as part of a July 2015 Consent Order that was closed in November 2019, after Capital One successfully completed enhancements to its AML program. The Bank was fully reserved for this resolution and has already paid FinCEN’s Civil Monetary Penalty and, accordingly, there is no further financial impact. We are pleased to fully resolve the last-remaining government inquiry relating to a line of business the Bank exited in 2014."

The company said that it has invested heavily in the enhancement of its anti-money laundering programme over the past several years, which is under new leadership.

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