US Senate panel to hold anti-money laundering hearing - sources

WASHINGTON Thu Jan 17, 2013 6:03pm EST

WASHINGTON Jan 17 (Reuters) - The U.S. Senate Banking Committee is expected to hold a hearing soon on anti-money laundering issues, according to people familiar with the matter, as the area is getting more scrutiny by U.S. enforcement authorities and regulators.

A hearing could come in early March and include testimony from representatives of the Office of the Comptroller of the Currency, the Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corp, one source said.

U.S. regulators have been cracking down recently on lapses at banks on their anti money-laundering controls.

The OCC and the Fed earlier this week ordered JPMorgan Chase & Co to improve its compliance with the Bank Secrecy Act and anti-money laundering requirements after finding deficiencies in the bank's program.

Banks are supposed to flag suspect transactions from sanctioned countries or those from customers with ties to drug trafficking or terrorism.

HSBC Holdings Plc agreed in December to pay $1.9 billion to settle U.S. criminal allegations that it allowed drug cartels to move vast drug proceeds through the bank from Mexico and other misconduct.

HSBC's misdeeds were also the subject of an extensive report and hearing from the Senate Permanent Subcommittee on Investigations last July, which also faulted the OCC for failing to take regulatory action sooner.

The OCC has since stepped up its efforts to detect anti-money laundering lapses, and is expected to take action against other top banks.

Last April, it faulted Citigroup Inc for its money laundering compliance, though did not assess a monetary penalty on the bank.