The Exchange Bank of Canada, owned by Florida-based Currency Exchange International, is appealing a $2,457,750 fine levied by federal regulators for failing to report suspicious cash transactions. Blacklock's Reporter says the Financial Transactions and Reports Analysis Centre (FINTRAC) stated the bank did not comply with the Proceeds Of Crime And Terrorist Financing Act requirements.“The Bank acknowledged the missed large cash transactions were misclassified,” FINTRAC said, noting that banks are required to report cash deposits exceeding $10,000 or those deemed suspicious. Regulators highlighted conflicting responses from the bank regarding the movement of U.S. banknotes, raising “significant concerns about whether the bank understands when and how to comply with large cash transaction reports.”The violations were discovered during a routine compliance examination, with irregularities found in five of 26 randomly inspected files. FINTRAC cited examples including millions of U.S. dollars transferred into Exchange Bank accounts by one client, quickly wired to overseas accounts in a jurisdiction with high money laundering risks. Another client conducted transactions worth millions, exceeding normal volume by tenfold.“There were reasonable grounds to suspect one or more transactions were related to the commission or attempted commission of a money laundering or terrorist financing offence,” FINTRAC stated, adding that gaps were evident in the bank’s unusual transaction review processes.This fine is among the largest issued under the Act in recent years. Other significant penalties include $9.2 million against Toronto-Dominion Bank (2023), $7.5 million against the Royal Bank (2023), and $1.3 million against the Canadian Imperial Bank of Commerce (2023).Created by Parliament in 2000, FINTRAC faced criticism for initially concealing the identities of violators under confidential agreements. This policy changed following public backlash over undisclosed fines, such as a $1.15 million penalty against Manulife Bank. FINTRAC acknowledged the controversy in internal memos, citing concerns about fairness and transparency in its compliance program.
The Exchange Bank of Canada, owned by Florida-based Currency Exchange International, is appealing a $2,457,750 fine levied by federal regulators for failing to report suspicious cash transactions. Blacklock's Reporter says the Financial Transactions and Reports Analysis Centre (FINTRAC) stated the bank did not comply with the Proceeds Of Crime And Terrorist Financing Act requirements.“The Bank acknowledged the missed large cash transactions were misclassified,” FINTRAC said, noting that banks are required to report cash deposits exceeding $10,000 or those deemed suspicious. Regulators highlighted conflicting responses from the bank regarding the movement of U.S. banknotes, raising “significant concerns about whether the bank understands when and how to comply with large cash transaction reports.”The violations were discovered during a routine compliance examination, with irregularities found in five of 26 randomly inspected files. FINTRAC cited examples including millions of U.S. dollars transferred into Exchange Bank accounts by one client, quickly wired to overseas accounts in a jurisdiction with high money laundering risks. Another client conducted transactions worth millions, exceeding normal volume by tenfold.“There were reasonable grounds to suspect one or more transactions were related to the commission or attempted commission of a money laundering or terrorist financing offence,” FINTRAC stated, adding that gaps were evident in the bank’s unusual transaction review processes.This fine is among the largest issued under the Act in recent years. Other significant penalties include $9.2 million against Toronto-Dominion Bank (2023), $7.5 million against the Royal Bank (2023), and $1.3 million against the Canadian Imperial Bank of Commerce (2023).Created by Parliament in 2000, FINTRAC faced criticism for initially concealing the identities of violators under confidential agreements. This policy changed following public backlash over undisclosed fines, such as a $1.15 million penalty against Manulife Bank. FINTRAC acknowledged the controversy in internal memos, citing concerns about fairness and transparency in its compliance program.
