Kenneth Rijock

Kenneth Rijock

Wednesday, October 24, 2012

PENNSYLVANIA BANK CANCELS STOCK OFFER DUE TO AML AND BSA DEFICIENCIES



If you read the fine print in banking notices, as I do, you may have seen this one. A Pennsylvania bank, which intended to offer shares of its stock to the public, was forced to withdraw that offer. It seems that an examination by regulators found serious defects in the anti-money laundering and Bank Secrecy Act programmes.

The bank will now be hiring additional compliance staff, and improving and updating its compliance programme. The next time senior staff at your bank complain about rising compliance costs, remind them that compliance shortcomings, when found, can often kill a bank's attempts to raise funds, expand in to new areas, offer additional services, and any number of advances planned by the directors. Always make sure your compliance house is in order, before you take any steps that will bring regulators into the bank to check it out, lest you be financially embarrassed like this bank was.


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