US Fed terminates action against HBL
HBL, one of the top banks in Pakistan, in a report disclosed: “The Federal Reserve in September last year formally announced the termination of all Federal Reserve enforcement actions with HBL and HBLNY.”
Accordingly, the HBL does not expect any further actions or proceedings from the New York State Department of Financial Service (NYSDFS) or the Federal Reserve.
In the first quarter of 2020, by agreement with the New York State Department of Financial Services (NYSDFS) and the US Federal Reserve, the Habib Bank Limited surrendered its New York State licence to operate the HBL’s New York branch office and completed the voluntary liquidation of HBLNY under the New York banking law, according to the report.
The HBL has been operating a small branch in New York since 1978, which mainly offers US dollar clearing services.
In 2015, the New York branch was subject to a consent order and a cease and desist order by the New York State Department of Financial Services (DFS) and the Federal Reserve Bank of New York, respectively.
The HBL had notified the Pakistan Stock Exchange of this in December 2015. Despite HBL’s sincere and extensive remediation measures over the last two years, DFS is still not appreciating or recognising the significant progress that the bank has made at its New York branch and it has received a notice of departmental hearing by DFS, in terms of which DFS seeks to propose a civil monetary penalty of up to an outrageous amount of $629,625,000.
The actual penalty has not yet been imposed and only a maximum amount of potential penalty has been proposed. The HBL would vigorously contest this in the scheduled administrative hearing and the courts of law in the United States, as being unjustified, capricious, unreasonable, not supported by the facts or law and as being time barred.
The bank has also voluntarily decided to close its business in New York in an orderly manner and DFS has allowed the HBL to submit a voluntary application for orderly winding down of its New York business.
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