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US fines ABN AMRO Bank $80 million

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By Mark Felsenthal
December 19, 2005

U.S. bank regulators and supervisors announced on Monday that Dutch bank ABN AMRO Bank N.V. will pay an $80 million penalty in connection with findings the bank failed to comply with U.S. anti-money laundering laws.

The bank, (AAH.AS: Quote, Profile, Research), said in a statement it will pay the fines. The penalties are associated principally with problems with dollar clearing operations at its New York branch and violations in Dubai of U.S. foreign assets control sanctions governing transactions with Iran and Libya, the bank said.

"ABN AMRO recognizes that serious mistakes were made and accepts the sanctions," the bank said in a statement.

ABN AMRO bank employees in Dubai developed procedures to send payments to the bank's New York clearing center on behalf of Iranian and Libyan clients that excluded country-specific information so they would not be blocked, the bank acknowledged.

ABN AMRO transactions violated U.S. sanctions laws, the Federal Reserve, New York and Illinois state bank supervisory agencies, the Financial Crimes Enforcement Network and the Treasury Department's Office of Foreign Assets Control said in a statement.

The U.S. bank regulators and supervisors said De Nederlandsche Bank N.V., the regulator of Dutch banks, had also participated in issuing the consent order.

Regulators are requiring ABN AMRO to improve compliance and risk management systems to ensure full oversight and compliance with U.S. laws.

Members of the bank's managing board have decided to pay back Euros 1 million ($1.2 million) out of bonuses received in 2004. This includes 40 percent of Board Chairman Rijkman Groenink's bonus and 30 percent of Chief Financial Officer Tom de Swaan's bonus, the bank said.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.