Central Bank fines credit union for money laundering failures
The Central Bank has fined Bray Credit Union €98,000 for failing to have adequate measures in place to prevent money laundering and terrorist financing.
The institution was found to have broken the rules over a five-and-a-half year period.
All credit and financial institutions are required by law to put policies in place to detect such activities.
The Central Bank has been clamping down on institutions that fail to adhere to the terms of legislation enacted nearly six years ago.
Last month it issued its biggest penalty yet under this law when it fined Ulster Bank €3.3 million.
In relation to Bray Credit Union, the regulator said it had uncovered significant failings in its framework to detect money laundering and terrorist financing.
It did not specify if any money laundering or financing of terrorists actually occurred.
Bray Credit Union currently has 26,886 members and is in the top 11% of credit unions by asset size.
The Central Bank said it was concerned that a credit union of its size and scale was found to have breached key requirements for such an extended period of time.
“The breaches identify significant failings by Bray Credit Union in crucial areas such as the adoption of adequate policies and procedures, customer due diligence and monitoring dealings with members,” commented the Central Bank’s Director of Enforcement Derville Rowland.
“The failure by Bray Credit Union to apply adequate identification and verification measures to members and to scrutinise their transactions meant that it lacked critical information to allow it to properly fulfil its obligations to monitor, identify and report unusual and potentially suspicious activity and created an unacceptable risk of money laundering and terrorist financing,” she added.
Ms Rowland also said that credit unions must use the knowledge and insight they have of their customer base to comprehensively assess the money laundering and terrorist financing risks in their business and to implement effective and robust frameworks, system and controls to counter those risks.