On October 16, 2025, the Financial Transactions and Reports Analysis Centre of Canada (Fintrac), Canada’s anti-money laundering (AML) and anti-terrorist financing regulatory agency, imposed an administrative penalty exceeding $600,000 on First Nations Bank of Canada (FNBC). The penalty of $601,139.80 was levied following a compliance examination that uncovered significant shortcomings in the bank’s AML controls and reporting practices.
Fintrac identified five violations during its examination of FNBC’s compliance with federally mandated AML obligations. The regulatory agency found that the bank failed to submit suspicious transaction reports (STRs) in 31 percent of the cases reviewed. This lapse indicates a critical deficiency in the bank’s monitoring and reporting of transactions potentially linked to money laundering or terrorist financing activities.
Moreover, Fintrac found that FNBC did not develop or maintain adequate written compliance policies and procedures, a requirement under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The absence of documented policies calls into question the bank’s institutional controls designed to prevent illicit financial activity and monitor client risk.
The examination further revealed that FNBC had failed to properly assess and document the risk associated with money laundering and terrorist financing. Importantly, the bank did not implement prescribed special measures to manage relationships with high-risk clients, a critical control mechanism to mitigate exposure to these risks.
Ongoing monitoring deficiencies were also noted, with FNBC failing to consistently monitor business relationships as required by Fintrac regulations. This ongoing oversight is crucial to detect and report suspicious activities promptly.
Fintrac’s penalty and findings send a clear message about the importance of rigorous compliance from financial institutions, especially those serving unique client bases such as Indigenous communities, which FNBC primarily serves. The case highlights regulatory expectations for comprehensive, documented, and proactive AML programs that include risk assessments, monitoring, and timely suspicious transaction reporting.
FNBC has since indicated a commitment to enhancing its controls and cooperating fully with Fintrac’s oversight to address the compliance gaps identified in the review.
This latest enforcement action by Fintrac underscores the heightened regulatory scrutiny within Canada’s financial sector, reinforcing the necessity for all institutions to uphold strict AML and anti-terrorist financing standards to protect the integrity of the Canadian financial system and broader public interests.
By imposing this substantial fine, Fintrac aims to encourage greater vigilance among all financial entities in fulfilling their legal obligations to detect, prevent, and report financial crimes.
The administrative penalty follows Fintrac’s mandate to protect the Canadian financial system and demonstrates the agency’s resolve in holding banks accountable for lapses in AML compliance that could facilitate illicit activities.
This development holds broader implications for mid-sized and community-focused banks, emphasizing the non-negotiable nature of AML compliance across all types of financial institutions.
The FNBC case will likely prompt a reassessment of AML policies and practices across the sector, potentially motivating banks to strengthen controls, enhance training, and improve compliance infrastructure to avoid similar penalties.
AML Editor’s article was originally published in moosejawtoday on 18, Oct 2025