A bank is preparing for a regulatory exam after a previous regulatory exam identified weaknesses...

B: If a bank fails to demonstrate sustained improvement or cannot resolve identified deficiencies, it can face civil or even criminal penalties from regulators. Regulators expect not just policy changes, but proof of effectiveness and ongoing compliance improvements.

C: Even after addressing many concerns, if all issues are not resolved—such as outstanding transaction monitoring backlogs—regulators may issue orders to further remediate the AML program until full compliance is achieved.

CAMS 6th Edition and regulatory guidance clarify that “regulators may impose penalties, issue consent orders, or require further remediation where weaknesses persist.”

Incorrect:

A: Secondary sanctions generally apply to sanctions violations, not standard AML program weaknesses.

D: Regulatory actions can be public and do pose reputational risk.

E: While transparency is sometimes required, this is not a universal regulatory response.