American Express slapped with record fine for 11-year blind eye to $13B in “suspicious” trade

• American Express fined $350 million by federal regulators for anti-money laundering failures.
• Company missed approximately $13 billion in suspicious transactions over 11 years.
• Office of the Comptroller of the Currency and Federal Reserve issued concurrent enforcement actions.
• American Express neither admitted nor denied the findings in consent orders.
• Bank must overhaul compliance programs and hire independent reviewer within 90 days.

Regulators uncover systemic failures

Federal regulators on Thursday imposed a $350 million civil penalty against American Express National Bank, citing what the Office of the Comptroller of the Currency described as “critical deficiencies” in anti-money laundering controls that allowed approximately $13 billion in suspected illicit transactions to go undetected for more than a decade. The OCC and Federal Reserve jointly announced enforcement actions against the Utah-based banking subsidiary and its parent company, American Express Co., revealing systemic breakdowns from June 2014 through May 2025 in monitoring and reporting trade-based money laundering activity, including card charges and repayments associated with those transactions.

Scope of the failures

The OCC determined that American Express National Bank’s risk assessment process failed to align with the company’s actual business operations. Regulators found the bank concentrated its anti-money laundering focus on “relatively narrow” demand deposit account products while neglecting risks inherent in its “more dominant” credit and charge card portfolios. The agency identified “systemic breakdowns” in monitoring and reporting suspicious activity, with some transactions involving accounts linked to bank insiders, though the OCC did not identify specific individuals or their roles.

Between 2014 and 2025, the bank processed billions in suspected trade-based money laundering activity. Trade-based money laundering typically involves manipulating commercial transactions—altering price, quantity, or quality of goods—to disguise criminal proceeds or move illicit value across borders.

Historical context and regulatory implications

This penalty represents one of the largest anti-money laundering fines in recent years against a major U.S. financial institution. The action echoes past scandals involving American Express, which previously faced investigations from the Treasury Department, Federal Deposit Insurance Corporation and Federal Reserve over allegations of issuing fraudulent credit cards and deceptive sales practices, including a $112 million fine for unlawfully charging late fees.

The enforcement action underscores the heightened regulatory scrutiny facing financial institutions following decades of regulatory capture between banking agencies and the corporations they oversee. The OCC and Federal Reserve have increasingly pursued penalties against major banks for compliance failures, reflecting concerns that institutional priorities have prioritized profit over legal obligations designed to combat financial crime, which regulators describe as “critical to both economic and national security.”

Required corrective actions

Under the OCC consent order, American Express National Bank must submit a detailed action plan within 90 days addressing compliance deficiencies. Requirements include strengthening Bank Secrecy Act and anti-money-laundering risk assessment processes, enhancing customer due diligence and risk-identification programs, and hiring an independent third party to conduct retrospective reviews of suspicious activity.

The Federal Reserve separately ordered American Express Co. to submit an enterprise-wide compliance improvement plan, while its subsidiary American Express Travel Related Services must address sanctions compliance with the Treasury Department’s Office of Foreign Assets Control.

Implications for financial oversight

American Express shares fell approximately 0.3% in premarket trading following the announcement, though the company stated that a portion of the $350 million penalty had been reserved in prior periods and would not affect full-year 2026 financial guidance. CEO Stephen Squeri acknowledged the company takes its responsibility to combat financial crimes seriously and will address regulatory concerns, adding that while progress has been made, more work remains.

The consent orders do not impose asset caps, and American Express indicated compliance costs will not affect 2027 guidance. However, the enforcement action signals that federal regulators will continue demanding accountability from financial institutions whose compliance programs fail to match the scale and complexity of their operations. As money laundering techniques evolve and financial networks expand globally, the pressure on major banks to maintain robust detection systems will likely intensify, with billions of dollars in potential penalties serving as ongoing deterrent against systemic compliance failures.

Sources for this article include:

ZeroHedge.com

TheEpochTimes.com

Finance.Yahoo.com