Tue, Mar 4th, 2014

http://www.nj.com/business/index.ssf/2014/03/fdic_orders_bank_of_princeton_to_beef_up_money-laundering_defenses.html

The Bank of Princeton, a 12-branch lender with $877 million in assets, has been ordered to ramp up its compliance with federal anti-money laundering laws, according to an enforcement action issued by the Federal Deposit Insurance Corp.

The FDIC’s order does not allege anything wrong took place at the Bank of Princeton, but it says the bank has to take a number of steps to better detect suspicious activity and alert authorities to red flags.

Among other things, the bank must implement a revised Bank Secrecy Act compliance program; conduct risk assessments at least annually; and determine when certain customers should face enhanced due diligence because of risks they present, the FDIC said in an enforcement order it released on Friday.

Additionally, the Bank of Princeton’s board was told to appoint a BSA compliance officer and set up a compliance committee featuring mostly people who have never been involved in the bank’s daily operations, the agency said.

The Bank Secrecy Act, passed by Congress in 1970, requires financial institutions to alert authorities to cash transactions of more than $10,000 and to report activity that might indicate money laundering, tax evasion and other criminal activities. Regulators have cracked down lately on alleged bank shortcomings in policing potential money laundering.

The Bank of Princeton’s management consented to the terms of the enforcement action, though they didn’t admit or deny any violations related to “weaknesses” in its BSA compliance and other matters, according to the FDIC order.

Officials at the bank, including President Edward Dietzler and Chairman Andrew Chon, didn’t immediately return calls today.

In a separate Securities and Exchange Commission filing, the bank said that while it was taking steps to comply with the FDIC order, there’s no guarantee it will succeed or that it won’t be impacted financially.

The bank, which operates nine branches in New Jersey and three under the MoreBank brand in the Philadelphia area, said last month it netted $8.8 million in profits for 2013, a 39 percent rise from the year before.