Even there there is the progression of MRA (Matters Requiring Attention), MRIA (Matters Requiring Immediate Attention) before going to actual criminal prosecution (which invariably ends in a settlement, which takes the form of a large fine and a Consent Order). Just take a look at [1], where an unnamed bank has appealed an MRA given by the OCC on the topic of AML in 2020.
Yes, but in for example the HSBC case that didn't happen, I think (might be wrong, it's been years since I looked at this stuff). Although there were MRAs, there wasn't any intermediate step I think between that and prosecution?
Senator Levin. Did the OCC ever cite a violation of law for
noncompliance with AML statutes prior to 2010? Do you know, Ms.
Dailey?
Ms. Dailey. I do not believe we did prior to 2010.
[...]
Senator Levin. What about informal enforcement action? Was
there any informal enforcement action taken against HBUS prior
to 2010?
Ms. Dailey. There was not.
I can accept that this isn't how the system is meant to work, although the core problems of subjectivity remain even if there are warnings. For instance, wasn't a key pillar of the case against HSBC that it didn't consider all Mexican clients to be high risk, and the regulators decided they should have done? We might consider that this was ~15 years ago, in the environment of 2023 such a classification might actually be considered racism! So exactly what the standards are for things like "high risk", "politically exposed persons", "structured transactions" and so on are always open to interpretation.
