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Shut Down Rabobank, Public Citizen Tells Regulators

Feb. 13, 2018

Shut Down Rabobank, Public Citizen Tells Regulators

Rabobank’s Repeated Crimes Are Grounds for Termination

WASHINGTON, D.C. – After repeatedly pleading guilty to money laundering and other charges, Rabobank must lose its license to do business, Public Citizen said in a letter (PDF) sent to two financial regulatory agencies today. Public Citizen is asking the U.S. Office of the Comptroller of the Currency (OCC) to terminate the bank’s charter and asking the Federal Deposit Insurance Corporation (FDIC) to revoke Rabobank’s status as an insured depository institution.

On Feb. 7, the Netherlands-based Rabobank National Association pleaded guilty to a felony conspiracy charge for impairing, impeding and obstructing the OCC by concealing deficiencies in its anti-money laundering program and for obstructing the OCC’s investigation. Rabobank admitted to conspiring with several of its former executives to defraud the U.S. by unlawfully impeding the OCC’s ability to regulate the bank. Rabobank also admitted that it allowed hundreds of millions sourced from Mexico and elsewhere to be deposited into its rural bank branches and then transferred without proper notification to regulators as required by law. According to the U.S. criminal code, these specific violations are grounds for losing its charter.

“Federal regulators have brought severe sanctions against smaller banks, and it should bring the same penalties to larger ones,” the letter reads. “We reject the assertion that some banks are ‘too big to jail,’ an observation that bringing equal justice to large banks would destabilize the financial system. […] We ask that the Comptroller and the FDIC faithfully implement the clear intent of statutes designed to ensure integrity in our financial system. Refusing to do so would be an abdication of the agencies’ responsibilities under the law.”

“If Washington is serious about arresting the illegal drug trade and reforming Wall Street, it must use serious tools,” said Bartlett Naylor, financial policy advocate for Public Citizen’s Congress Watch division and author of the letter. “Money laundering makes possible the insidious trade in illegal, harmful drugs that have threatened the health of millions and led to fatal violence on the street. While the U.S. has spent countless billions securing the border and fighting street crime, federal efforts to combat money laundering have fallen short. The $360 million settlement with Rabobank perpetuates this inadequate response. Real penalties are needed to establish a deterrent so that Rabobank and other banks remove themselves from illegal drug trafficking.”