JPMorgan Chase & Co. is reviewing its correspondent banking unit and not taking on new business from foreign lenders after regulators identified deficiencies in its anti-money-laundering procedures.
The bank said in a memo last week that its treasury services unit won’t take on new correspondent clients or new business from existing customers who use the bank to process transactions, according to Brian Marchiony, a spokesman. The halt allows JPMorgan to review its existing relationships, he said. The Wall Street Journal reported the memo yesterday.
“Serving financial institutions in correspondent banking has been, and will continue to be, a core strength of ours,” Marchiony said in an e-mailed statement. “It’s important for us to pause and assess our business, particularly in select markets, to ensure we are well-positioned to meet our responsibilities for the long-term.”
The Office of the Comptroller of the Currency issued a consent order in January after finding that the bank “has an inadequate system of internal controls and independent testing” for anti-money-laundering compliance. The firm “failed to identify significant volumes of suspicious activity” and to file reports alerting regulators, according to the order.
HSBC Holdings Plc, Europe’s biggest bank, last year agreed to pay $1.92 billion to settle U.S. probes of money laundering.