NEW YORK CITY (dpa-AFX) - Integrated payments technology company American Express Co. (AXP) has been hit with a $350 million fine for deficiencies in its affiliated bank's Bank Secrecy Act or BSA and anti-money laundering or AML compliance program.
In a statement, the Office of the Comptroller of the Currency or OCC announced that it has issued a cease-and-desist order and the civil money penalty against American Express National Bank, Sandy, Utah for the lapses.
According to the regulator, the bank failed to establish and maintain a BSA/AML compliance program reasonably designed to assure and monitor compliance with the BSA and its implementing regulations.
The deficiencies involved inadequate resources, including staff without sufficient expertise, systemic internal control gaps, weak independent testing, and weak BSA/AML training for employees and directors.
The bank failed to tailor its BSA/AML risk assessment to its business activities, and its customer due diligence processes and customer identification program procedures contributed to monitoring and reporting failures, the OCC noted.
The agency alleged that with the systemic breakdowns in its suspicious activity monitoring and reporting processes, the bank failed to timely identify, evaluate, and sufficiently report around $13 billion of suspected trade-based money laundering activity that took place over the past decade.
The OCC said it is taking these actions in coordination with a concurrent cease-and-desist order against American Express and American Express Travel Related Services Co., Inc., by the Board of Governors of the Federal Reserve System.
The OCC-assessed penalty will be directed to the U.S. Treasury.
Comptroller of the Currency Jonathan Gould, stated, 'The OCC expects banks of American Express' size and complexity to devote sufficient resources to ensure compliance with laws and regulations designed to detect and prevent money laundering, which are critical to both economic and national security. American Express failed to maintain a BSA/AML compliance program properly aligned with the money laundering risks of its operations, which resulted in the bank's failures to timely identify and report significant missed suspicious activity and to provide important information to law enforcement.'
In overnight activity on the NYSE, American Express shares were losing around 0.46%, trading at $306.69, after closing Thursday's regular trading 1.27% higher.
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