Habib Bank fined for failure to comply with money laundering regulations

(New York, NY – Insurance News 360) – Financial Services Superintendent Maria T. Vullo Exercises Her Authority to Expand the Scope of an Independent Review and Issues Surrender Order Imposing Conditions for the Orderly Wind Down of Habib’s New York Branch

New Consent Order Follows a 2016 Examination Finding Continued Weaknesses in the Bank’s Risk Management and Compliance Following a Prior 2015 Consent Order

New York’s Department of Financial Services issued a $225 million fine against Habib Bank and its New York branch because the bank8 did not comply with New York laws and regulations designed to combat money laundering, terrorist financing, and other illicit financial transactions.

The investigation began in 2016 when DFS discovered that the bank’s risk management and compliance were weak and that they had not completed  remedial actions required by a 2015 consent order.

Financial Services Superintendent Maria T. Vullo expanded an indep0endent review of the bank’s operations.  As a fresul9t of the fine and the findings Habib Bank has agreed to surrender its license to operate the New York branch upon fulfillment of conditions outlined in a separate Surrender Order to ensure the orderly wind down of the New York branch.

“DFS will not tolerate inadequate risk and compliance functions that open the door to the financing of terrorist activities that pose a grave threat to the people of this State and the financial system as a whole,” said Superintendent Vullo.  “The bank has repeatedly been given more than sufficient opportunity to correct its glaring deficiencies, yet it has failed to do so.  DFS will not stand by and let Habib Bank sneak out of the United States without holding it accountable for putting the integrity of the financial services industry and the safety of our nation at risk.  The terms of this Consent Order and the Surrender Order now agreed to by the bank will ensure that Habib’s misconduct will no longer occur on U.S. soil and that DFS will still investigate the bank’s prior activities.”

Source: New York Department of Financial Services.