The Fed has warned Deutsche Bank in recent weeks to address persistent deficiencies in anti-money laundering controls or could impose fines, according to people familiar with the matter.
While Deutsche Bank has said it is allocating significant resources to adjust anti-money laundering controls, the Fed said that instead of making progress, it was going backwards. The Fed says some of these anti-money laundering controls need immediate attention.
In 2017, Deutsche Bank was fined $41 million by the Federal Reserve for poor anti-money laundering.
In 2018, the Fed classified Deutsche's US operations as a "problem state" (troubled condition), a rare rebuke to large banks. In May 2020, the Fed issued a new warning about the bank's anti-money laundering controls.
Deutsche Bank passed the Fed's stress test for the first time in 2019, but Christian Soyne, CEO of the bank, has recognized the bank's continuing flaws.
In July last year, Deutsche Bank was fined $150 million by the New York Department of Financial Services, in part because of its dealings with convicted sex offender and financier Jeffrey Epstein (Jeffery Epstein). The New York Department of Financial Services said payments handled by Deutsche Bank should have been marked through its compliance system, including payments to people publicly alleged to be associated with Epstein.