Federal Reserve Board Issues Enforcement Action with First of Murphysboro Corp.
December 3, 2024
Washington, D.C. – The Federal Reserve Board (FRB) has issued an enforcement action against First of Murphysboro Corp. (FOM), a Murphysboro, Illinois-based bank holding company. The action follows an investigation by the FRB into FOM’s compliance with the Bank Secrecy Act (BSA) and its anti-money laundering (AML) program.
The FRB found that FOM failed to implement an effective AML program reasonably designed to identify and report suspicious activity, maintain copies of required records, conduct due diligence on its customers, and provide adequate staff training. Specifically, the FRB cited the following deficiencies:
- Inadequate customer due diligence: FOM failed to obtain and maintain sufficient identifying information for certain customers, including those involved in high-risk transactions.
- Lack of suspicious activity monitoring: FOM’s AML system failed to adequately monitor transactions for potential suspicious activity, resulting in numerous high-risk transactions going undetected.
- Insufficient recordkeeping: FOM failed to maintain copies of required records, such as customer identification documents and transaction records, for the required period of time.
- Inadequate staff training: FOM’s staff were not adequately trained on BSA and AML requirements, resulting in a lack of understanding and compliance.
The enforcement action requires FOM to take specific steps to address these deficiencies, including:
- Developing and implementing an effective AML program that meets all applicable legal and regulatory requirements.
- Enhancing customer due diligence procedures to ensure the collection and verification of sufficient identifying information for all customers.
- Implementing a robust suspicious activity monitoring system that is capable of detecting and reporting potential suspicious activity.
- Maintaining copies of required records for the appropriate period of time.
- Providing comprehensive staff training on BSA and AML requirements.
The FRB also imposed a $1 million civil money penalty on FOM for its BSA and AML violations.
“Financial institutions have a critical role to play in detecting and deterring illicit financial activity,” said FRB Chairman Jerome Powell. “The Federal Reserve is committed to ensuring that banks have strong AML programs in place to protect the financial system and the public from potential threats.”
This enforcement action is part of the FRB’s ongoing efforts to combat money laundering and other financial crimes. The FRB regularly conducts examinations of banks to ensure compliance with BSA and AML regulations.
Federal Reserve Board issues enforcement action with First of Murphysboro Corp.
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