Banking Department Fines Western Union $8 Million for Violating Bank Secrecy, USA Patriot, New York Banking Laws
December 18, 2002
New York, NY: Superintendent of Banks Elizabeth McCaul announced today that the Banking Department reached a Consent Agreement with Western Union for violating the Federal Bank Secrecy Act (BSA), the USA PATRIOT Act and various sections of the New York State Banking Law. The Consent Agreement includes a fine of $8 million and requires Western Union to enhance its existing BSA compliance program. New York law requires that all licensees be in compliance with all applicable state and federal laws.
"Compliance with the BSA and USA PATRIOT Act is critical to the safety and soundness of our nation�s financial services industry, " Superintendent of Banks Elizabeth McCaul said. "The New York State Banking Department takes violations of the USA PATRIOT Act, the BSA, and the New York Banking Law very seriously. We want to ensure that the U.S. financial system is not used for illegal purposes."
The Banking Department conducted an examination of Western Union and found that it failed to timely file CTRs and SARs and to adequately supervise the activities of its agents. During the course of the examination, Department examiners found that Western Union did not file CTRs on multiple same day transactions conducted at different agents which, when aggregated, totaled in excess of $10,000. When the Banking Department uncovered that Western Union was not complying with the laws previously cited, it directed them to implement the practice of filing CTRs for aggregated transactions between agents that exceed $10,000.
"It is important that financial institutions understand the requirement that FinCEN has put in place to file CTRs for transactions based on the aggregation of consumer transactions regardless of whether the transactions occurred at related or unrelated agent locations," Superintendent McCaul added.
The terms of the Consent Agreement require Western Union to:
1. Pay a fine of $8 million to the New York State Banking Department;
2. Comply with all relevant provisions of the BSA, the USA PATRIOT Act and provisions of the Banking Law and regulations within forty-five days of the Agreement;
3. Initiate an acceptable BSA Compliance program within forty-five days of the Agreement consistent with the requirements of the BSA.
Western Union cooperated with the Banking Department during its examination and to date, all CTRs and SARs identified by the Banking Department have been filed with the proper authorities.
Superintendent McCaul said that she is "encouraged by the immediate steps taken by Western Union to correct the noted deficiencies as well as the enhancements to its compliance program that have been implemented."
Western Union Financial Services Inc. is a subsidiary of First Data Corp. Western Union has more than 117,000 agent locations in over 185 countries worldwide. It is the largest network of its kind, making more than one quarter billion money orders every year. First Data Corp. provides Electronic Funds Transfers to 75% of the world and provides card issuer services for 1,400 financial institutions and more than 390 million consumers worldwide.
The New York State Banking Department is the regulator for all state-chartered banking institutions, including nine of the State�s ten largest banks, and virtually all of the United States offices of international banking institutions. The Department also licenses all money service businesses operating in New York State. The aggregate assets of the companies and institutions supervised by the Banking Department are roughly $1.7 trillion.