The Federal Reserve Board ordered American Express Company to overhaul its anti-money laundering program after finding the firm failed to adequately detect and report suspicious activity, a move that adds regulatory pressure on a payments giant already navigating a shifting competitive landscape.
Twin actions from two regulators
The enforcement action, announced Thursday, targets the holding company directly. In a parallel move, the Office of the Comptroller of the Currency sanctioned American Express National Bank, the firm's subsidiary national bank, for related deficiencies. The OCC is the bank's primary federal regulator. The dual actions signal coordinated scrutiny across the firm's bank and non-bank operations.
Enterprise-wide gaps identified
The Fed said significant deficiencies exist in how American Express implemented its enterprise-wide anti-money laundering program, with particular weaknesses at the national bank level. The order requires the company to strengthen detection, monitoring, and reporting systems to meet obligations under the Bank Secrecy Act. No fine was disclosed in the Fed's release.
What this means for the business
American Express operates a closed-loop network that generates revenue from merchant discount fees and cardholder spending. Regulatory orders that mandate compliance spending and management attention can constrain product rollouts and increase operating costs. The firm must now demonstrate to examiners that remediation is effective before the orders are lifted.
Context of recent enforcement
The action follows a pattern of heightened Bank Secrecy Act enforcement across large financial institutions. In recent years, the Fed and OCC have pursued consent orders against banks and payment companies for similar control failures, often requiring independent consultants and quarterly progress reports. American Express has not publicly commented on the orders.