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Banking Department Fines Western Union $8 Million for Violating Bank Secrecy, USA Patriot, New York Banking Laws


State of New York
Banking Department


In the Matter of   
Western Union Financial Services, Inc. 
Englewood, Colorado        

Agreement and Imposition of Monetary Penalty Issued Upon Consent

WHEREAS, Western Union Financial Services, Inc. (“the Licensee”), with offices located at 6200 South Quebec Street,  Englewood, Colorado 80111, is licensed as a transmitter of money pursuant to Article XIII-B of the New York Banking Law (the “Banking Law”) by the Superintendent of Banks (the “Superintendent”) of the New York State Banking Department (the “Banking Department”); and  

WHEREAS, in recognition of their common goals to ensure compliance with applicable federal and state laws, rules and regulations by the Licensee and to manage financial, operational, legal, reputational and compliance risk of the Licensee, the Licensee and the Banking Department mutually have agreed to enter into this Agreement and Imposition of a Monetary Payment Issued Upon Consent (the “Agreement”) ; and

WHEREAS, during the course of an examination of the Licensee, the Banking Department identified certain alleged deficiencies relating to the establishment and maintenance of books and records designed to ensure and monitor compliance with the reporting requirements of the Currency and Foreign Transactions Reporting Act (31 United States Code Section 5311 et seq.), as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the “USA PATRIOT Act”)(Public Law No. 107-56, October 26, 2001), and the implementing regulations promulgated thereunder by the United States Department of the Treasury (31 of the Code of Federal Regulations Part 103) (collectively, the “BSA”), and relating to the Official Compilation of Codes, Rules and Regulations of the State of New York, title 3, Part 300.1(c) (“Part 300”) and requirements to supervise agents pursuant to Banking Law Section 651-b and by Part 406.3(g); and

WHEREAS, the Banking Department alleges that the Licensee has failed to file in a timely manner certain Currency Transactions Reports (“CTRs”), Suspicious Activity Reports (“SARs”) and reports required by Part 300; and

WHEREAS, the Banking Department alleges that the Licensee has failed to exercise sufficient supervision and oversight over its agents in accordance with Banking Law Section 651-b and Part 406.3(g); and

WHEREAS, the Banking Department alleges deficiencies in the Licensee’s program to ensure compliance with the above cited laws and regulations and in its monitoring and oversight of the compliance programs of its agents; and

WHEREAS, the Licensee and the Banking Department agree that the Licensee should enhance its policies, procedures and controls for compliance with the above laws and regulations; and

WHEREAS, the Licensee has undertaken immediate corrective action and has begun to implement comprehensive enhancements to its compliance program, including its program of supervision of its agents; and

WHEREAS, the parties hereto wish to resolve this matter on the terms set forth hereinafter without further legal action and without any admission of wrongdoing by the Licensee. 

NOW, THEREFORE, IT IS HEREBY AGREED, in light of the above, that the Licensee shall make to the Banking Department a monetary payment in the amount of eight million dollars ($8,000,000.00) to the Banking Department.

IT IS HEREBY FURTHER AGREED, that the Licensee shall take the following affirmative actions to correct the deficiencies described above:

A. Compliance Program

1. Within forty-five (45) days from the effective date of this Agreement, the Licensee shall submit to the Banking Department an enhanced program for ensuring compliance with the BSA, Part 300 and Part 406.3(g) (the “Compliance Program").  The Compliance Program, among other things, shall upgrade and improve the Licensee’s systems of internal controls.  At a minimum, the Compliance Program shall: 

a.   Ensure compliance with the above recordkeeping and reporting requirements.

b.   Enhance and provide comprehensive and effective compliance training and oversight for all appropriate personnel of the Licensee ("Licensee's personnel") and its agents with respect to the above requirements.  Such training and oversight shall be risk-based.

i.  The training of Licensee's personnel and agents shall be conducted by competent and qualified personnel, knowledgeable in all aspects of these laws and regulations and the Licensee's internal policies and procedures.

ii.   All Licensee's personnel and all agents shall receive training at least once a year and all newly-hired Licensee personnel or newly-engaged agents shall receive training shortly after being hired or engaged, respectively.

iii.  All training materials, including the Compliance Manual and Operations Manual of the  Licensee, shall be updated on a regular basis to ensure that all appropriate personnel have the most current and up-to-date information.  All such manuals shall be consolidated in a manner that facilitates easy access.

iv.  Oversight shall include effective monitoring of transactions conducted by Licensee's agents, through the Licensee’s monitoring systems, to ensure that suspicious and other reportable transactions are identified and reported in accordance with all applicable laws and regulations.

c.   Require that the Licensee provide for independent   testing of its Compliance Program in accordance with the requirements of the BSA. 

d.   Require the compliance officer to report to senior management with respect to the Compliance Program and senior management of First Data Corporation and of Western Union  shall approve such Compliance Program together with any substantial amendments to the Compliance Program.

B.          Approvals and Progress Reports

1.     The program and procedures required under this Agreement shall be submitted to the Banking Department for review.  Such program and procedures shall be submitted within the periods set forth in this Agreement.  The program and procedures shall not be substantially amended or rescinded without prior written notice to the Banking Department. 

2.     Within fifteen (15) days after the end of each quarter following the effective date of this Agreement, the Licensee shall submit a written progress report to the Banking Department detailing the actions taken to comply with each provision of this Agreement. 

C.          Monetary Payment Instructions

1.     The monetary payment assessed by this Agreement shall be remitted in full within one business day of the date of execution of this Agreement, pursuant to payment instructions from the Banking Department. 

D.          Notices 

1. All communications regarding this Agreement shall be sent to: 

Paul J. Fazio
Deputy Superintendent of Banks
Licensed Financial Services Division
New York State Banking Department
One State Street 
New York, New York 10004  

Christina Gold
President 
Western Union Financial Services, Inc. 
6200 South Quebec Street 
Englewood, Colorado 80111 

Michael Jeronimus, Esq. 
General Counsel 
Western Union Financial Services, Inc. 
6200 South Quebec Street 
Englewood, Colorado  80111 

E.Miscellaneous

1.     The provisions of this Agreement shall not bar, estop or otherwise prevent any other agency or department of the State of New York, or any other state or federal agency or department, from taking any other action affecting the Licensee, any of its current or former officers, directors, employees, or insiders, or their successors or assigns with respect to the matters relating to this Agreement.   

2.     Each provision of this Agreement shall remain effective and enforceable unless stayed, modified, terminated or suspended in writing by the Superintendent.   

3.     Notwithstanding any provision of this Agreement, the Superintendent, in her sole discretion, may grant written extensions to the Licensee to comply with the provisions of this Agreement.  

4.     The effective date of this Agreement is the date on which it is signed by the Superintendent or her Deputy.   

5.     This Agreement is in complete settlement of all civil and regulatory liability of the Licensee and its directors, officers, employees and insiders, based upon any violations of laws and regulations related to the BSA, Part 300 and Part 406.9, and to the supervision of its agents under Banking Law Section 651-b and Part 406.3(g) related to these laws and regulations through January 1, 2003.   

6.This is not a confidential document.  

This agreement is in complete settlement of all civil and regulatory liability of the Licensee and its directors, officers, employees, and insiders, based upon any violations of laws and regulations related to any applicable New York recordkeeping or reporting requirement, including Part 300 and Section 406.9, and to supervision of its agents, including under Section 651-b and Part 406.3(g), through January 1, 2003.   

By Agreement of the Superintendent of Banks of the State of New York, effective this 18th day of December, 2002. 

Dated _________________.  By  ____________________________
Elizabeth McCaul
Superintendent of Banks
New York State Banking Department 
Dated _________________.  By  ____________________________
Christina Gold 
President 
Western Union Financial Services, Inc.

Acknowledged by First Data Corporation:
By:  ______________________________