Federal regulators have updated their BSA/AML guidance. The following is an excerpt from their statement, which can be read in its entirety by clicking here.
"For example, an institution that has procedures to provide BSA/AML training to appropriate personnel, independent testing, and a designated BSA/AML compliance officer, would nonetheless be subject to a cease and desist order if its system of internal controls (such as customer due diligence, procedures for monitoring suspicious activity, or an appropriate risk assessment) fails with respect to a high risk area or to multiple line of business that significantly impact the institution's overall BSA compliance. Similarly, a cease and desist order would be warranted if, for example, an institution has deficiencies in the required independent testing element of the Program and those deficiencies are coupled with evidence of highly suspicious activity creating a significant potential for unreported money laundering or terrorist financing in the institution."
Commentary
As noted in the July 8 post, AP Reports, "AML (Anti-Money Laundering) Compliance Costs Mount," Federal Regulators are raising the bar for BSA/AML compliance. In the past, it may have been enough to have the training, systems, and documentation in place. Now regulators will be looking closely at how the bank's BSA/AML program works in day-to-day use. Banks that haven't done so already should step up their BSA/AML testing efforts.
