Latest Payments News: UK's Starling Bank Reveals Active FCA Investigation Into Alleged AML Failures, and more

Kat Pilkington

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June 17, 2024

Catch up on six of the stories our payments compliance analysts have covered lately, and stay up-to-date on the latest news.

UK's Starling Bank Reveals Active FCA Investigation Into Alleged AML Failures

Starling Bank has revealed in its 2024 annual report that it is under investigation by the Financial Conduct Authority (FCA) for potential anti-money laundering (AML) failures.

The report, published this week, contains details about the investigation in the small print of a "Contingent Liabilities" section.

“On 24 November 2023 the FCA opened an investigation into the Bank’s compliance with UK money laundering regulations and the FCA’s rules and principles for businesses,” it said.

“The Company continues to engage and co-operate fully with the FCA. The potential impact of the investigation is currently unquantifiable but could be material.”

Starling is the second UK neobank to publish details of an AML probe in its 2024 report. Last week, as covered by Vixio, Monzo revealed that a criminal investigation into AML failures at the bank was dropped by the FCA in November 2023.

However, Monzo remains under civil investigation for potential breaches of FCA Principles for Businesses and related AML rules.

CFPB Proposes New Rule To Remove Medical Bills From Credit Reports

The Consumer Financial Protection Bureau (CFPB) has proposed a rule to remove medical bills from most credit reports, which it says will boost privacy, improve credit scores and prevent debt collectors from using credit reports to coerce payments.

"Medical bills on credit reports are often inaccurate and don't predict loan repayment," said CFPB Director Rohit Chopra. "We're ending the practice of using credit reports to pressure patients into paying unowed medical bills."

The proposal would ban the sharing of medical debts with lenders and would stop lenders from using medical information, closing a loophole from the 2003 Fair and Accurate Credit Transactions Act that allowed lenders to consider medical debts.

Stakeholders have until August 12 to respond.

Philippines Getting Closer To FATF Greylist Removal, Says IMF Official

The Philippines is making “significant progress” towards improving its anti-money laundering (AML) controls, and may soon be removed from the Financial Action Task Force (FATF) greylist.

According to Elif Arbatli Saxegaard, mission chief at the International Monetary Fund (IMF), the Philippines government has demonstrated an “all-hands-on-deck” approach in its efforts to secure its removal from the greylist.

“They are really committed,” said Saxegaard, as quoted by local media. “It’s hard for us to know what the FATF will decide, but our hope is that the Philippines gets off the list, building on this reform process that they’ve already initiated.”

In June 2021, FATF added the Philippines to its list of jurisdictions under increased monitoring, also known as the greylist. Greylisting can have significant negative impacts on foreign investment and cross-border payment flows.

FCA Imposes Restrictions On Motmaen Limited

The UK's Financial Conduct Authority (FCA) has placed restrictions on Motmaen Limited, a small payment institution, preventing it from providing money transfer services.

The FCA imposed restrictions on May 15, according to a bulletin on the regulator's website, requiring the firm to inform all customers that it has ceased payment activities.

The City watchdog also required Motmaen, a licensed institution since 2019 handling money remittances, to settle all liabilities to its customers by May 22, 2024, ensuring the return of any money received for uncompleted transactions.

Central Bank Of Argentina Updates Rules For Payment Service Providers

The Central Bank of the Argentine Republic (BCRA) has issued a new circular that introduces significant changes to the regulations governing payment services providers offering payment accounts (PSPCPs) and similar entities.

Effective from June 7, the update eliminates the requirement for PSPCPs to pay interest on customer funds held by these providers, in a move that is aimed at streamlining financial operations within the sector.

The new communication revokes Communication "A" 7825 and reiterates that PSPCPs must keep customer funds available on demand in an account with an independent financial institution in pesos.

It also requires PSPCPs to inform customers that they are not financial institutions and that customer funds do not have the same protections as those held by registered financial institutions.

FinCEN Seeks Comment On Renewal Of Due Diligence Rules Under BSA

The US Financial Crimes Enforcement Network (FinCEN) has issued a request for comment on a proposed renewal, without change, of existing information collection requirements under the Bank Secrecy Act (BSA).

The rules require certain banks, brokers or dealers and mutual funds to establish and maintain due diligence programmes for foreign financial institutions and for private banking accounts.

These programmes should include appropriate, specific, risk-based and, where necessary, enhanced policies, procedures and controls reasonably designed to enable the covered financial institution to detect and report money laundering.

The focus of the reporting is on correspondent accounts established, maintained, administered or managed by covered financial institutions in the US for a foreign financial institution.

Written comments are open until August 14 and must be submitted to the Office of Management and Budget.


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