FinCEN assessed a $300,000 civil money penalty against North Dade Community Development Federal Credit Union of Miami Gardens, Florida on November 25, 2014 for BSA violations from 2009–2014 — a $4 million asset, 5-employee credit union that processed $1 billion+ in annual wire volume from 56 money services businesses as sub-account holders without adequate AML controls, identity verification, or suspicious activity monitoring.

North Dade Community Development Federal Credit Union — $300,000 BSA Penalty: $4M Asset CU Processing $1B+ Annually (2014)

Outcome: FinCEN assessed a $300,000 civil money penalty against North Dade Community Development Federal Credit Union of Miami Gardens, Florida on November 25, 2014, for systemic BSA violations from 2009 through 2014 — a $4 million asset, 5-employee credit union that had allowed 56 money services businesses (MSBs) to hold sub-accounts, processing over $1 billion in annual outgoing wires and nearly $1 billion in remotely captured deposits without adequate AML controls, risk assessment, customer due diligence, or suspicious activity reporting.

North Dade Community Development Federal Credit Union was a small community development credit union in Miami Gardens, Florida with only $4 million in total assets and five employees. Despite this minimal institutional footprint, North Dade had allowed itself to become a banking hub for 56 money services businesses that held sub-accounts at the credit union. In 2013 alone, the total transaction volume through North Dade attributable to these MSB sub-accounts included $1.01 billion in outgoing wire transfers and approximately $984 million in remotely captured deposits — a transaction volume representing roughly 250 times the credit union's total assets.

From 2009 through 2014, North Dade had material deficiencies across all four required elements of its BSA/AML program: internal controls, independent testing, BSA compliance officer designation, and training. The credit union blindly relied on a single third-party vendor to conduct all due diligence for all 56 MSBs without itself understanding the nature, risk profile, or ownership of the businesses it was banking. Without internal understanding of its customer base, North Dade was unable to detect or report the significant suspicious transactions flowing through the credit union, including activity related to money laundering and drug trafficking.

North Dade also failed to comply with Section 314(a) of the USA PATRIOT Act, which required the credit union to search its records for accounts and transactions linked to persons identified by law enforcement as potentially involved in terrorism or money laundering. The credit union was subsequently liquidated by NCUA.

Primary Source: FinCEN Press Release — FinCEN Penalizes Florida Credit Union for Failures in Managing High-Risk International Financial Activity