Discover Financial Agrees to New Anti-Money Laundering Measures--Update

By Dow Jones Business News, 
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By Andrew R. Johnson

Discover Financial Services agreed to enhance its procedures for preventing money laundering under a pact with the Federal Deposit Insurance Corp., the credit-card lender said Friday.

The Riverwoods, Ill., company said it would put in place a revised Bank Secrecy Act compliance program under the agreement. Discover, which didn't admit or deny any charges of unsound banking practices, won't pay any fines as part of the agreement.

"Discover is committed to continuously making our compliance program stronger, including our policies, procedures, training and other internal controls designed to mitigate inherent risks in our business," a spokesman said in an email.

Discover disclosed in a February regulatory filing that the FDIC had notified it of possible deficiencies in its program for preventing money laundering. The company said an enforcement action was possible.

Under the FDIC's order, Discover must adopt a revised compliance program within 120 days, retain a third-party consultant to help it assess risks of its bank operations and take other steps.

Discover is the sixth-largest credit-card issuer based on outstanding loans. It also operates an online bank that offers checking and savings accounts, certificates of deposit and other consumer-banking products.

The company agreed in 2012 to pay $214 million in customer refunds and fines under a settlement with the Consumer Financial Protection Bureau and the FDIC over allegations it mismarketed add-on products such as a debt-cancellation service and identity-theft protection to credit-card customers.

Write to Andrew R. Johnson at andrewr.johnson@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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