Major bank anticipates paying a penalty over relationship with Scott Tucker

This Wednesday, May 3, 2017, photo shows a U.S. Bank branch in Omaha, Neb. (AP Photo/Nati Harnik)
This Wednesday, May 3, 2017, photo shows a U.S. Bank branch in Omaha, Neb. (AP Photo/Nati Harnik) AP

U.S. Bank expects it will have to pay a penalty related to its banking relationship with recently convicted Leawood payday loan businessman Scott Tucker.

U.S. Bancorp, the publicly traded holding company of Minneapolis-based U.S. Bank, recorded a $608 million liability on its most recent quarterly report, an amount that reflects what it may have to pay to resolve the Tucker issue and other ongoing regulatory compliance matters.

U.S. Bancorp disclosed in a January filing with the Securities and Exchange Commission that its dealings with Tucker were the subject of an investigation by the U.S. Attorney’s Office in Manhattan, N.Y. That’s the same U.S. Attorney’s office that brought racketeering charges against Tucker. He was convicted of those charges Oct. 13.

“That investigation also has covered issues related to the adequacy and effectiveness of U.S. Bank’s legacy Bank Secrecy Act/anti-money laundering compliance program,” U.S. Bancorp wrote in the SEC filing.

“The parties are currently working on a definitive settlement, which the Company currently expects to include a deferred prosecution agreement and payment of a penalty, which the Company expects to finalize soon.”

The amount that U.S. Bancorp ultimately pays is subject to negotiations with federal prosecutors and other regulatory agencies.

Under federal laws, banks are expected to monitor for and report suspicious or questionable banking practices.

Tucker, who federal prosecutors said made $380 million from his various payday loan companies, was sentenced on Jan. 5 to nearly 17 years in federal prison following his conviction for running what a jury found was an abusive and predatory consumer loan enterprise. He is being held in a federal detention center in Brooklyn, N.Y.