The Federal Reserve fined Deutsche Bank $186 million on Wednesday, saying it moved too slowly to fix problems with the bank’s money-laundering controls that the bank regulator flagged in 2015 and 2017.
“Deutsche Bank has made insufficient remedial progress in compliance” with the orders it agreed to, the Fed said in a statement.
In fining the bank, the Fed issued a new order requiring Deutsche to “prioritize the completion” of controls that it should have imposed under earlier orders.
The central bank said the action was necessary because the bank had made some progress in establishing better controls, it was “exposed” The level of compliance risk increases when it comes to detecting money laundering or violations of US sanctions.
Deutsche, in a statement, said the Fed’s action is related to “our historic delays in complying with past enforcement actions and agreements.” But the bank said it had taken steps to step up its anti-money laundering controls, including adding staff to its team that crackdown on financial crimes.
Deutsche has had a troubled history with regulators and prosecutors. Over the past decade, the bank has been hit with numerous sanctions and large fines for failure to prevent money laundering and allegations of tax violations, price fixing and foreign bribery. In 2017, the bank reached a $7.2 billion civil settlement with federal prosecutors over the sale of toxic mortgage products during the 2008 financial crisis. The bank also paid a $150 million fine to the New York bank regulator in 2020, partly over its banking ties with disgraced financier Jeffrey Epstein.
The Fed’s 2015 and 2017 orders stemmed from Deutsche’s ties to Danske Bank’s Estonian branch, which is also a target of authorities.
Bank regulators had found that in its transactions with Danske Bank, Deutsche had not properly monitored transactions involving high-risk customers. Deutsche ceased doing business with Danske’s Estonian branch in 2015.
Last year, Danske, Denmark’s largest bank, pleaded guilty to charges arising from a long-running money-laundering investigation. The bank also agreed to pay a fine of $2 billion.
