FINTRAC Penalty on Synergy Credit Union: What Went Wrong

On November 27, 2025, FINTRAC announced that Synergy Credit Union, a provincial credit union headquartered in Lloydminster, Saskatchewan, was hit with an administrative monetary penalty (AMP) of $214,500. The violations, uncovered during a compliance examination, highlight recurring issues that continue to appear across Canada's financial sector — especially around risk assessment, suspicious transaction reporting, and the implementation of high-risk mitigation measures.

While Synergy has paid the penalty in full and the case is now closed, the findings offer important lessons for credit unions, banks, MSBs, and all reporting entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

Source: FINTRAC Official News Release

Read the full FINTRAC announcement

Overview of Violations

FINTRAC found Synergy Credit Union committed four categories of non-compliance:

1. Failure to Report Suspicious Transactions (STRs)

This is the most serious finding.

FINTRAC determined Synergy failed to submit STRs despite having reasonable grounds to suspect the transactions were tied to money laundering or terrorist financing.

This is one of the highest-risk AML failures a reporting entity can commit, because STRs form the backbone of FINTRAC's financial intelligence.

2. Failure to Assess and Document ML/TF Risks

Synergy did not adequately identify or document risks associated with:

Products and services
Clients and business relationships
Delivery channels
Geographic exposure
Other prescribed risk factors

Without a legitimate, documented risk-based approach, AML programs cannot function effectively.

3. Failure to Take Special Measures for High-Risk Situations

Once a client or activity is deemed high-risk, entities must implement:

Enhanced due diligence
More frequent ongoing monitoring
Additional information collection and verification

FINTRAC found that Synergy did not implement or document these measures.

4. Failure to Maintain Adequate Compliance Policies and Procedures

Synergy's AML/ATF policies were found to be:

Outdated
Incomplete
Missing required elements
Not formally approved by senior leadership

This is a foundational breakdown — no AML program works without clear, updated, senior-approved documentation.

What This Means for Reporting Entities Across Canada

STR Failures Are a Deal-Breaker

FINTRAC continues to treat suspicious transaction reporting as the most important obligation across the entire AML ecosystem. Failing to report STRs reliably results in high–six figure penalties — or more.

With proposed Bill C-2 now expanding criminal and administrative consequences for non-compliance, entities can expect:

Increased scrutiny
Larger penalties
More public enforcement actions

Risk Assessments Remain a Pain Point

Nearly every enforcement action issued in the past two years includes a risk-assessment violation.

Why?

Because many entities either:

Use generic templates not reflective of their actual operations,
Fail to update them annually, or
Don't operationalize the assessment into monitoring and decision-making.

FINTRAC expects every risk factor to be documented, justified, and connected to real controls.

"Special Measures" Must Be Real, Not Theoretical

Credit unions and banks should take note: FINTRAC is increasingly penalizing institutions for failing to apply enhanced measures once a client is deemed high risk.

This includes:

Collecting additional KYC information
Increasing monitoring frequency
Escalating review to compliance officers
Documenting why a relationship remains open

If it's not documented, FINTRAC will consider it not done.

Why Credit Unions Should Take This Case Seriously

Unlike major banks, many credit unions operate with smaller compliance teams — but the expectations from FINTRAC are identical.

With the average credit union handling cash, electronic transfers, business accounts, and high-risk client segments, the AML exposure is comparable to mid-sized financial institutions.

The Synergy case reinforces:

FINTRAC is willing to penalize credit unions significantly
STR failures will always drive penalty size upward
Incomplete risk assessments are no longer tolerated
Documentation matters just as much as implementation

How Organizations Can Strengthen Their AML Compliance Program

To avoid similar enforcement outcomes, entities should prioritize:

1. STR Process Overhaul

Implement a "second reviewer" for all STR decisions
Document why something is or isn't suspicious
Train frontline staff on red flags and escalation

2. Risk Assessment Rebuild

Tailor it to actual operations
Update at least annually
Map inherent risks to mitigations

3. Enhanced Measures for High-Risk Clients

Collect additional KYC evidence
Increase monitoring frequency
Review all high-risk relationships quarterly

4. Updated Policies + Proof of Senior Approval

Policies must match operations
Must be reviewed annually
Senior leadership must approve updates in writing

Final Takeaway

Synergy Credit Union's $214,500 penalty is part of a rapidly accelerating trend in FINTRAC enforcement across Canada's financial institutions. The message is clear: OUTDATED OR UNDER-DOCUMENTED COMPLIANCE IS A LIABILITY — NOT A DEFENSE.

If your organization needs help modernizing its reporting, risk assessment, or AML compliance processes, tools like Comply+ can dramatically reduce risk by ensuring reporting is fast, accurate, and fully aligned with FINTRAC expectations.

FINTRAC Penalty on Synergy Credit Union: What Went Wrong — and What It Means for Canadian Financial Institutions