A Rabobank branch in California, close to the border with Mexico, is being investigated for its role in potentially money laundering cash, news agency Bloomberg says on Monday.

Rabobank shut the Calexico branch in January after US officials began investigating if it had ignored signs that the operation may been used by drug cartels to launder funds, Bloomberg says.

Rabobank spokesman Hendrik Jan Eijpe told Bloomberg the bank is cooperating with investigators, but declined to provide further information.

If the bank faces criminal action in relation to the anti-money laundering probe, it would mean extra trouble for the cooperative bank, Bloomberg says.

In 2013, Rabobank escaped prosecution over the manipulation of benchmark interest rates in the US as long as it avoided further legal trouble. That agreement expires on October 29.

Meanwhile, the bank is overhauling its California operations, saying the outlook for the business had deteriorated. Bloomberg says.