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Invest Independently confirmed2 publishers 2 min read Published

American Express's $350 million penalty comes to 2.7 cents per dollar of suspicious activity it under-reported

American Express must pay a $350 million penalty after US regulators found its AML program let about $13 billion in suspicious activity go under-reported. One order is thin evidence of a sweep, but it shows bank-chartered card issuers what the OCC counts as under-resourcing.

The Investor · Invest desk

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What happened

  • The OCC order covers June 2014 to May 2025 and describes billions in suspected trade-based money laundering through questionable card charges and repayments, some tied to accounts connected with bank insiders.
  • Regulators cited inadequate resources, inexperienced staff, weak training and gaps in internal controls as the shortcomings behind the program's failure.
  • Under the enforcement action, American Express must rebuild its AML framework, tighten surveillance of suspicious transactions and reinforce oversight of potential insider misconduct.
  • The Federal Reserve separately issued a cease-and-desist order against the company.

Why it matters

  • What it costs cost American Express says part of the penalty was reserved in earlier periods and that 2026 guidance holds, so the cost still to come is the rebuild of its AML framework.
  • What it limits constraint The OCC measures AML resourcing against a bank's full size and complexity, so a small deposit unit cannot anchor the program of an issuer whose card book is far larger.
  • Who has to decide decision A card issuer holding a bank charter has to decide whether monitoring staff scales with card volume or with the deposit book, and the Amex order shows which the OCC measured it against.

The penalty is small beside the activity it covers. At $350 million [1] against about $13 billion [2], it comes to 2.7 cents per dollar [16]. The order runs from June 2014 to May 2025 [12], so the under-reported flow averages roughly $1.2 billion a year [17]. Both sources call the $13 billion suspicious or suspected activity, so the figure measures what went unreported. The market's response was small too. Shares slipped 0.3% in premarket trading, on a stock already down more than 16% since the start of the year [13]. The consent orders place no limit on the company's assets [8].

The allocation finding is the one that applies to other card issuers with bank charters. The OCC said the company concentrated on risks linked to its relatively narrow deposit products and gave insufficient attention to its much larger credit card business [3]. Neither report gives headcount or budget for either side, so the size of the staffing gap cannot be computed from what has been published.

American Express accepted the OCC's orders without admitting or denying the findings [6]. Its public account stresses what it did report. "We also investigated transactions that we identified being processed over our network by individuals misusing our products for the purchases of goods and services," the company said. It also "reported that information to law enforcement, and took other appropriate action." [15] Comptroller of the Currency Jonathan Gould said the lapses stopped the bank from passing critical information to law enforcement [10]. The two statements can both hold. The company's statement is about transactions it identified. The OCC's finding is about activity it failed to identify, evaluate and sufficiently report [2]. The cause was systemic shortcomings in transaction monitoring, customer identification and internal controls, and they kept the full extent of suspicious behaviour from reaching law enforcement [11].

We think the order sets a sizing test for any card issuer that holds a bank charter, on the evidence of a single case. The Paypers makes the same argument. It writes that for issuers that also run deposit-taking operations, the case illustrates the expectation that monitoring, reporting and customer due diligence be proportionate to the risks across all business lines, including large card portfolios [18]. The counter-thesis is that this is an Amex problem. The OCC called the failings systemic [11], and a failure that broad says more about one bank's controls than about how regulators will treat its peers. We would call our view wrong if the next AML orders against card issuers cite other failings and none repeats the mismatch between a small deposit book and a large card book.

What to watch

  • Whether the OCC or the Federal Reserve issue AML orders against other bank-chartered card issuers that cite the same deposit-versus-card mismatch.
  • Any separate terms or penalty in the Federal Reserve's cease-and-desist order against American Express.
  • Whether American Express keeps its 2026 and 2027 guidance unchanged as the AML rebuild proceeds.

Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.

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  1. [1]

    American Express has been ordered to pay a $350 million penalty by US regulators.

    Reported Supported Source: fintech.global, citing the OCC orderView cited source
  2. [2]

    The OCC said American Express failed to identify, evaluate and sufficiently report approximately $13 billion in suspicious activity over the past decade; fintech.global describes it as roughly $13bn in suspected illicit activity left insufficiently monitored and reported.

    Reported Supported Source: OCC statement as reported by The PaypersView cited source
  3. [3]

    The OCC said American Express concentrated on risks linked to its relatively narrow deposit products and gave insufficient attention to its much larger credit card business.

    Reported Supported Source: OCC assessment as reported by The Paypers; fintech.global reports the same findingView cited source
  4. [4]

    The Federal Reserve has separately issued a cease-and-desist order against American Express.

    Reported Supported Source: fintech.globalView cited source
  5. [5]

    Under the enforcement action, American Express must rebuild its AML framework, tighten surveillance of suspicious transactions and reinforce oversight of potential insider misconduct.

    Reported Supported Source: fintech.globalView cited source
  6. [6]

    American Express accepted the OCC's orders without admitting or denying the findings.

    Reported Supported Source: fintech.global; The Paypers reports the same, citing ReutersView cited source
  7. [7]

    American Express said part of the penalty had already been set aside in earlier periods and would leave its full-year 2026 financial guidance unchanged, and that it does not anticipate compliance costs affecting its 2027 guidance.

    Reported Supported Source: American Express, as reported by fintech.globalView cited source
  8. [8]

    The consent orders place no limit on American Express's assets.

    Reported Supported Source: fintech.globalView cited source
  9. [9]

    The regulators said the shortcomings included inadequate resources, inexperienced staff, weak training and gaps in internal controls.

    Reported Supported Source: OCC and Federal Reserve findings as reported by The PaypersView cited source
  10. [10]

    Comptroller of the Currency Jonathan Gould said the lapses stopped the bank from passing critical information to law enforcement.

    Reported Supported Source: Jonathan Gould, as reported by fintech.globalView cited source
  11. [11]

    The OCC identified systemic shortcomings across transaction monitoring, customer identification and internal controls, which meant the full extent of suspicious behaviour never reached law enforcement.

    Reported Supported Source: OCC, as reported by fintech.globalView cited source
  12. [12]

    According to the OCC's order, the bank handled billions in suspected trade-based money laundering between June 2014 and May 2025, covering questionable card charges and repayments; some of this activity was linked to accounts connected with bank insiders, whom the regulator did not name or describe.

    Reported Supported Source: OCC order, as reported by fintech.globalView cited source
  13. [13]

    American Express shares slipped 0.3% in premarket trading on Friday and have fallen more than 16% since the start of the year.

    Reported Supported Source: fintech.globalView cited source
  14. [14]

    The OCC said it expects banks of American Express's size and complexity to commit sufficient resources to complying with laws designed to detect and prevent money laundering, and framed its expectations in terms of an institution's size and complexity rather than individual product lines.

    Reported Supported Source: OCC statement as reported by The PaypersView cited source
  15. [15]

    We also investigated transactions that we identified being processed over our network by individuals misusing our products for the purchases of goods and services, reported that information to law enforcement, and took other appropriate action.

    Reported Supported Source: American Express statement, as quoted by fintech.globalView cited source
  16. [16]

    The $350 million penalty is about 2.7 cents for every dollar of the roughly $13 billion in suspicious activity.

    Derived Supported
  17. [17]

    Spread over the June 2014 to May 2025 window (11 years inclusive), roughly $13 billion of under-reported activity averages about $1.2 billion a year.

    Derived Supported
  18. [18]

    For card issuers that also run deposit-taking banking operations, the case illustrates the expectation that monitoring, reporting and customer due diligence should be proportionate to the risks across all business lines, including large card portfolios.

    Reported Contested Source: The Paypers' analysisView cited source

Sources

2 independent publishers whose own reporting we read for this story.

  1. fintech.global

    1 article · October 12, 2026

    American Express hit with $350m AML penalty
  2. thepaypers.com

    1 article · October 12, 2026

    US regulators fine American Express USD 350 million over AML failings

Topics and entities

Topics

  • AML Enforcement and Referrals
  • US bank regulation
  • Card issuer compliance

Entities