OCC tells Florida community bank to step up AML oversight

A Maitland, Florida bank has agreed to revamp its money laundering oversight program after being cited by the Office of the Comptroller of the Currency.

Axiom Bank entered into a formal agreement with the OCC this month, agreeing to put together a plan for improving its Bank Secrecy Act and anti-money laundering, or BSA/AML, controls as well as its practices involving flagging suspicious activities. The bank also agreed to beef up its oversight staff and related training programs.

Money laundering

The anti-money-laundering lever that regulators have never used

October 4, 2024 6:00 AM

The OCC announced the enforcement action against the $850 million bank on Thursday. The agreement document noted that the agency found BSA violations at Axiom as well as "unsafe or unsound banking practices" related to BSA/AML compliance.

The announcement comes a week after the OCC joined with the Federal Reserve and the U.S. Justice Department in hitting TD Bank with $3 billion worth of fines and an asset cap, the biggest AML-related penalty ever issued to a bank.

Axiom has also pledged to do a suspicious activity lookback and review its practices for third-party risk-management — which has been a focal point for federal banking regulators during the past two years. 

The document did not detail the specific violations at the bank, as is typical.

Axiom must submit several plans for remediating its issues within the next 30 days.

Axiom is a nationally chartered bank with seven branch locations in central Florida. It was among the fastest growing small banks in the country last year, ranking No. 14 on American Banker's list of the top 20 community banks for commercial and industrial lending. The firm's C&I book was $199.8 million as of the first quarter, a 15% increase year over year. 

Like many community banks, Axiom has forged partnerships with various financial technology groups in recent years. 

It is the banking service provider for Majority — a Miami-based challenger bank launched in 2022 to cater to recent immigrants. That same year, it partnered with the UK-based platform BankiFi to provide cash management services to small and medium businesses. Before that, it partnered with the fintech Malauzai in 2018 to develop a mobile application, AxiomGo, aimed at providing services to unbanked consumers.

Last year, Axiom brought in Cable, a third-party group that touts an ability to "continuously test" BSA/AML compliance across all of a bank's accounts. In a January 2023 press release, the two companies said Cable would "automate" Axiom's "financial crime compliance." 

Founded in 1984 as Washington Shores Savings Bank, the firm has undergone several name changes during the past 40 years. It adopted the Axiom moniker in 2014, around the same time that it relocated from Lake Mary, Florida.