U.S. Bank Cited by Federal Authorities for Lapses on Money Laundering (Published 2018)

U.S. Bank, the fifth-largest commercial bank by assets in the United States, was charged by the federal authorities on Thursday with failing to guard against illegal activity and, in at least one instance, even abetting it.

The Justice Department accused U.S. Bank, which is based in Minneapolis, of severely neglecting anti-money laundering rules, helping a payday lender operate an illegal business and lying to a regulator about its plans for tracking potential criminal activity by bank customers.

Federal prosecutors in Manhattan reached an agreement with U.S. Bank to defer prosecution as long as the bank could show it had improved its monitoring of customer transactions. To settle the Justice Department charges and cases brought by other regulators, the bank agreed to pay various fines and penalties totaling $613 million.

In a statement, the bank’s chief executive, Andy Cecere, said that U.S. Bank had already made “significant investments” toward improving its program for combating money-laundering.

“Our culture of ethics and integrity demands that we do better,” he said.

The action against U.S. Bank was modest compared with cases involving banking giants like HSBC and Standard Chartered that the authorities found had done business with drug gangs and countries like Cuba and Iran that had been barred from the United States financial system under international sanctions. In 2012, for instance, federal prosecutors settled a money-laundering case against HSBC for $1.9 billion.

Unlike the earlier cases, the one involving U.S. Bank focused mainly on warning signs that the bank was ignoring.