Volksbank facing second fine for lacking money laundering controls

De Volksbank is facing a second fine for poor risk management at the still State-owned bank. The European Central Bank (ECB) has asked regulator De Nederlandsche Bank (DNB) to launch another investigation into the parent company of SNS, ASN, and RegioBank, NOS reports.

Last year, the DNB already concluded that De Volksbank did too little to prevent money laundering and terrorist financing. It also did not properly check its customers’ backgrounds. The DNB has been working for some time to impose a fine on De Volksbank for this.

This year, the ECB - the regulator for large European banks - has also looked into the bank’s shortcomings, De Volksbank revealed when publishing its half-year figures. The ECB suspects De Volksbank of underestimating the risks of loans and customers for years.

The DNB told the bank that this investigation would lead to another fine. De Volksbank can’t yet say how high the fines will be.

In the past, other banks, including the big three ING, ABN Amro, and Rabobank, received hefty fines for not having their money laundering checks in order. They settled with the Public Prosecution Service (OM) for many hundreds of millions of euros.

Banks have complained that the stringent checks under the Money Laundering and Terrorism Financing Prevention Act cost them a lot of money and sometimes result in them discriminating against customers. Earlier this year, the DNB instructed Dutch banks to do more to prevent discrimination during their money laundering checks.