American Express Fined $350 Million for Ignoring $13B in Suspicious Trades

Federal regulators have imposed a hefty $350 million civil penalty on American Express National Bank, citing what the Office of the Comptroller of the Currency (OCC) described as "critical deficiencies" in its anti-money laundering (AML) controls. These failures allowed approximately $13 billion in suspected illicit transactions to go undetected over more than a decade. The OCC, alongside the Federal Reserve, announced enforcement actions against the Utah-based banking subsidiary and its parent company, American Express Co., revealing systemic breakdowns in monitoring and reporting trade-based money laundering activity from June 2014 through May 2025.

The OCC's investigation found that American Express National Bank's risk assessment process did not align with its actual business operations. Regulators noted that the bank concentrated its AML efforts on a narrow set of demand deposit account products, neglecting the risks associated with its more dominant credit and charge card portfolios. There were identified "systemic breakdowns" in the monitoring and reporting of suspicious activities, with some transactions linked to accounts associated with bank insiders, although specific individuals or their roles were not disclosed.

Between 2014 and 2025, the bank processed billions of dollars in transactions suspected of being linked to trade-based money laundering. This form of money laundering typically involves manipulating commercial transactions—such as altering the price, quantity, or quality of goods—to disguise criminal proceeds or transfer illicit value across borders.

This penalty marks one of the largest fines for anti-money laundering violations against a major U.S. financial institution in recent years. It echoes previous scandals involving American Express, which has 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 highlights the increasing regulatory scrutiny that financial institutions are facing after decades of regulatory capture between banking agencies and the corporations they oversee. The OCC and Federal Reserve have ramped up penalties against major banks for compliance failures, reflecting concerns that institutional priorities have often favored profit over legal obligations designed to combat financial crime, which regulators deem critical to both economic and national security.

Regulatory Demands for Compliance Improvements

Under the OCC's consent order, American Express National Bank is required to submit a detailed action plan within 90 days to address its compliance deficiencies. This includes strengthening its 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 activities.

The Federal Reserve has 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.

Follow The Money

Following the announcement, American Express shares fell approximately 0.3% in premarket trading. The company stated that a portion of the $350 million penalty had been reserved in prior periods and would not affect its full-year 2026 financial guidance. CEO Stephen Squeri acknowledged the company’s commitment to combating financial crimes and addressing regulatory concerns, stating that while progress has been made, further work is necessary.

The consent orders do not impose asset caps, and American Express indicated that compliance costs would not impact its 2027 guidance. However, this enforcement action signals that federal regulators will continue to demand 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 is likely to increase, with billions of dollars in potential penalties serving as an ongoing deterrent against systemic compliance failures.