BSA and OFAC Compliance Program Deficiencies Highlighted in Cease and Desist Order; October BSA Blast
I often write about Bank Secrecy Act (BSA) enforcement actions as these tend to illustrate what the regulators are looking for in examining for BSA compliance. This recent Cease and Desist Order against The Bank & Trust, S.S.B, of Del Rio, Texas, reiterates the need for a robust compliance and risk management program in order to comply with BSA and anti-money laundering (BSA/AML) regulations. The enforcement action also indicates a weakness in this bank's compliance with the Office of Foreign Assets Control of the United States Department of the Treasury (OFAC) requirements.
Under the order, the bank is required to do the following:
- Strengthen board oversight of compliance policies, procedures, standards, staffing and resources;
- Develop an enhanced written BSA/AML compliance program;
- Develop a revised written program for conducting appropriate levels of customer due diligence;
- Develop an enhanced written program designed to reasonably ensure the identification of and timely, accurate and complete reporting of all known or suspected violations of law or suspicious transactions to law enforcement and supervisory authorities;
- Submit a written plan to ensure qualified independent testing and validation of the bank's suspicious activity monitoring system;
- Bring in an independent third party to conduct a "look-back" transaction review of the first half of 2016 to see if suspicious activity involving high risk customers and transactions at, by, or through the bank was properly identified and reported; and
- Submit a plan to enhance the bank's compliance with the OFAC regulations that includes but is not limited to, enhanced OFAC screening procedures, an improved methodology for assessing OFAC risks, and enhanced policies and procedures to ensure compliance with OFAC regulations.
Examples of deficiencies by another institution can be used as road maps to determine where, if any, your own institution's BSA and OFAC compliance programs might have weaknesses.
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BSA Blast. The October 2017 issue of the BSA Blast is now available (NAFCU login required). The articles in this issue cover: 1) weaknesses in this Florida bank's BSA compliance program are outlined in a very detailed consent order signed with the OCC; and 2) FinCEN issues its first enforcement action against a foreign-located virtual currency exchange. The quiz included in this issue focuses on FinCEN's advisory guidance on political corruption in Venezuela and OFAC sanctions.
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2018 BSA Seminar. Don't have your NAFCU Certified Bank Secrecy Officer (NCBSO) designation yet? Make plans to attend NAFCU's 2018 BSA Seminar, August 12-15 in Denver, Colorado. Advance your career and skills with up-to-the-minute credit union BSA training!
