Interagency Statement on Bank Secrecy Act

Last week, the federal banking agencies issued a Statement with an important reminder to banks: Stay on top of Bank Secrecy Act compliance!

            Specifically, the Statement reiterates that at minimum, all BSA Compliance Programs must include five key elements:

1.      A system of internal controls capable of assuring BSA compliance;

2.      Independent tests that monitor BSA compliance;

3.      A designated individual responsible for monitoring BSA compliance;

4.      Training programs that educate employees about BSA compliance; and

5.      A customer identification procedure that enables banks to form reasonable beliefs as to the true identity of its customers.

            The Statement states that federal banking agencies will issue cease and desist order to banks that fail to maintain adequate BSA Compliance Programs.  Before a cease and desist order is issued, however, the problem must be identified in a written document that is communicated to the institution’s board of directors.   

            This Statement serves as a reminder of the importance of a strong BSA Compliance Program.  It also emphasized the serious implications that can result from failing to correct a problem that a federal banking agency has brought to your attention.  As an example, it states that if in an examination an agency finds an inadequate BSA training program, and at the next examination the training program problem is fixed, but another BSA compliance problem is discovered, a cease and desist order will ordinarily not be issued.  If, however, the training program is still deficient at the second examination and steps have not been taken to remedy the problem, the agency may issue a cease and desist order.

If you have any questions regarding BSA Compliance Programs contact Howard Hagen.