NAFCU Compliance Blog

The Extra 30 Minutes & Director Education

Written by Steve Van Beek

On Friday I blogged about the Importance of Informed, Decisive and Strategic Board Members.  Over the weekend, I read another article that highlighted this issue and included a great tip.  The article was from NCUA Board Member Michael Fryzel and states:

"Recently, when visiting a credit union, I heard an excellent idea on helping board members better understand the many aspects of the financial services world. I call the idea "the extra 30."

Each month, prior to their board meeting, directors arrive at the credit union 30 minutes early. Those extra 30 minutes are then spent listening, asking questions and learning about one specific topic that will help them do their jobs better.

The range of subjects covered during the extra 30 minutes can be anything from the value of passbook accounts to asset liability management. It can even be a discussion on an NCUA regulation or the benefits of derivatives.

The extra 30 sessions should be concise, plain English presentations that provide solid information on a particular subject. The session should leave the participants knowing a little more than they knew before and eager for what is to come at the next session."

Of course, when I'm reading the section above I'm thinking about ways credit unions can use NAFCU's Online Training Program which includes 14 unique modules for boards. The majority of the modules are between 25 and 35 minutes in length - a great way to train during "the extra 30 minutes."

Board Member Fryzel continues:

"Director education is one of the most important functions of a credit union. The people entrusted with fiduciary responsibility need to know what their credit union is doing and what they are voting to approve when making decisions. Credit unions must continue to provide directors with the opportunity to understand and become familiar with the many aspects of our ever changing financial world. The first step in achieving that goal is to make education easy, available and understandable.

What better way to begin than with just an extra 30?"

Again - this builds on Friday's blog post on the Importance of Informed, Decisive and Strategic Board Members.  

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Modules from NAFCU's Online Training Program. Below is a listing of the 14 board modules in NAFCU's Online Training Program:

1. The Nature, Foundation and Organization of Federal Credit Unions (33 minutes)
2. The Role of the Federal Credit Union's Board (34 minutes)
3. The Role of the Supervisory Committee (33 minutes)
4. Ethics and Fiduciary Duties (26 minutes)
5. The Regulation of Federal Credit Unions (23 minutes)
6. The Examination of Federal Credit Unions (38 minutes)
7. Risk Management (36 minutes)
8. Privacy, Security & Identity Theft (19 minutes)
9. The Bank Secrecy Act, Money Laundering and Financial Crime (44 minutes)
10. Asset Liability Training (35 minutes)
11. Discrimination Issues for Credit Unions (32 minutes)
12. On-Demand Webcast:  Essential Financial Literacy Education (60 minutes)
13. On-Demand Webcast:  Corporate Governance and Board Fiduciary Duties (90 minutes)
14. On-Demand Webcast:  BSA & OFAC Compliance for Directors and Supervisory Committee Members (75 minutes)

I see numerous opportunities to get your extra 30!  You can get a sneak peek at the Online Training Program here.

The Importance of Informed, Decisive and Strategic Board Members

Written by Steve Van Beek

Yesterday, we blogged on the latest The Federal Credit Union magazine - including an article on The Vital Life of the CU Director.

Well, that article isn't the only one focusing on the role of the credit union's board of directors.  The NCUA Report has included detailed articles in both the January and February issues.

The January issue had an article from Region V titled Strong Board Leadership is Essential for Successful Credit Unions.  The article includes this summary:

"We found the most successful directors display three overarching and essential characteristics.

• They have a clear understanding of their role.
• They are engaged in critical decisions.
• They have a strategic mindset."

You can find the full article here.

The February issue includes an article from NCUA Chairman Debbie Matz titled Volunteer Directors Play Critical Role in Safety & Soundness (continued on page 6).

The article focuses on the board's duties to oversee the direction of the credit union as well as their risk management duties - including:

• Interest Rate Risk
• Third-Party Risk - including

1. Credit Risk; and
2. Reputation Risk

• Aging Membership

The article ties risk management back into overall safety and soundness.  

Read together - these articles provide a compelling case for informed, decisive and strategic credit unions boards.

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With the above in mind, I wanted to share two NAFCU resources to help ensure your credit union's board is informed, decisive and strategic.  

NAFCU's Board of Directors & Supervisory Committee Conference.  NAFCU's 32nd Board of Directors Conference will be held May 15 - 17 in beautiful Asheville, North Carolina.  You can view the conference agenda here, which includes the following:

• Bank Secrecy Act and Risk Management with NAFCU's Anthony Demangone

• Fiduciary Duties and Ethics: The Top 10 Things Credit Union Directors Need to Know with NAFCU's Carrie Hunt

• Strategic Succession Planning

• How the CFPB Impacts Your Credit Union with Yours Truly

• Regulatory Update with NAFCU's Carrie Hunt

And, much more - including the opportunity to earn Bank Secrecy Act and Financial Literacy training certificates.  You can find additional information here (including the full conference brochure).

Sign up by March 22nd to get the early-bird rate!

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NAFCU's Online Training Program.  NAFCU also offers an affordable online training program for credit unions.  The program includes 14 modules for board members - including two on the Bank Secrecy Act and one on Financial Literacy (training certificates are available for board members who view those modules).  You can find FAQs here and pricing information here.  If you have any questions - just shoot me an email and I'll help in any way I can.     

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Be sure to pass the articles and the training opportunities along to your management and board.  And, remember that all of NAFCU's educational events - including our Board of Directors conference and Online Training Program - are open to all credit unions regardless of NAFCU membership.

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Have a great weekend!  

NAFCU's Regulatory Compliance School Just Got Better - Regulatory Update Day

Written by Steve Van Beek

We've heard you!  For the past couple of years, we've received the following feedback about NAFCU's Regulatory Compliance School (paraphrased, of course):

"School is great and provided a solid foundation for understanding the regulatory requirements credit unions face on a daily basis.  BUT, the rules are changing so fast that it would be great to receive updates on what has just changed and what is changing next."

With this in mind, we've created Regulatory Update Day at NAFCU's 2013 Regulatory Compliance School (March 18-23 in National Harbor, Maryland).  

Regulatory Update Day (Thursday, March 21st) will provide:

• A clear understanding of what changes NCUA has in store for 2013 – including their Exam Focus

• An overview of the scope and applicability of the CFPB’s seven new mortgage regulations*

• A detailed look at the CFPB’s Qualified Mortgage/Ability-to-Repay requirements*

• Answers to Frequently Asked Questions on the mortgage rules from NAFCU’s compliance team*

• Insight from credit union attorneys and practitioners on how best to set up your implementation strategy

You can find more information on Regulatory Update Day here.  The three sessions with the "*" are sessions that are also part of NAFCU's Mortgage Reform Webcast Series.

The other 4 days of Compliance School will remain the same as will the opportunity to take the NAFCU Certified Compliance Officer (NCCO) exams.  Good luck!  

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And, all attendees at NAFCU's 2013 Regulatory Compliance School will receive NAFCU's 2013 GPS (coming soon!) as well as NAFCU's Scope & Applicability Charts.

Remember:  You do not need to be a NAFCU member credit union to attend NAFCU's conferences or webcasts.  In fact, you don't even need to work at a credit union.  Each School usually features a handful of consultants, vendors and other credit union "peeps" who support credit unions - in one way or another - on a daily basis.      

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FBI Bank Robbery Website; January 2013 BSA Blast & Best of Staff Quiz

Written by Steve Van Beek

Below is a short article from NAFCU's January 2013 BSA Blast: 

New Resource Tool Launched: FBI Nationwide Wanted Bank Robbers Website

According to the last full year of the Federal Bureau of Investigation (FBI) bank crime statistics, bank robbers last year walked away from federally insured banks, credit unions, savings and loan associations and armored trucks with more than $38 million in cash. To help with unsolved cases, the FBI launched a new Wanted Bank Robbers website in December. The first national system of its kind, the site spotlights a gallery of unknown suspects and includes a map function that plots robbery locations. Users can search the site by name, location or other factors. Searches result in a “Wanted by the FBI” poster with more images, a suspect’s full description and a brief narrative of the crime.

Jason DiJoseph, who runs the FBI’s bank robbery program at its headquarters, says the website “is an operational tool that will help law enforcement identify and prosecute bank robbers more quickly with the public’s help.” Users of the site can filter searches of serial and non-serial bank robbers. Bank crime statistics bear out the bureau’s emphasis on violent cases. Demand notes are robbers’ most frequently used tools (2,958 times in 2011), followed by firearms (1,242 times) and the mere threat of weapons (2,331 times) or explosive devices (154 times). Even in cases where weapons were not used, the FBI says the risk of violence increases each time a serial robber strikes.

The new website will include the most pressing bank robbery cases from the FBI’s 56 field offices. New features and more suspects will be added in the coming weeks and months, thus creating a fuller picture of the nation’s most-wanted bank robbers.

- Shari R. Pogach Regulatory Paralegal

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BSA Blast.  The full issue of NAFCU's January 2013 BSA Blast is now available for NAFCU members.  This issue includes:

• Examples of Banks Receiving Large Fines for Noncompliance with BSA/OFAC (HSBC Bank, Standard Chartered Bank, and First Bank of Delaware);
• A Detailed Review of FinCEN's Roundtables on their Customer Due Diligence ANPR; and
• The FBI's Bank Robbery Website (full article above)

Additionally, the BSA Blast includes a calendar of recent BSA news and BSA-related Questions & Answers.  Take a look today!

Note:  If your credit union is a NAFCU-member and you'd like to receive an email update when the BSA Blast is available each quarter, just send us an email.

Best of BSA Blast Staff Quizzes.  Each BSA Blast includes a 10 question staff quiz attached.  Over the years, we've had 20 staff quizzes with 200 questions.  We've reviewed the past questions and answers and have been putting together a "Best of BSA Blast Staff Quizzes" series.  The first edition is now available to NAFCU members - it is attached to the January 2013 BSA Blast and also available directly here (NAFCU log-in required).  Each "Best of" staff quiz includes 25 questions along with a detailed answer key.    

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Programming Note:  NAFCU's offices will be closing early today and will also be closed on Monday in observation of Inauguration Day and the Federal holiday.  We'll be back blogging on Tuesday.  Have a great weekend!

FinCEN and Fed Propose Changes to Definitions of “Funds Transfer” and “Transmittal of Funds”

Written by Bernadette Clair, Regulatory Compliance Counsel

FinCEN and the Fed recently issued a proposed rule to amend the definitions of "funds transfer" and "transmittal of funds" under Bank Secrecy Act (BSA) implementing regulations. These changes have been proposed in response to Dodd-Frank’s amendments to the Electronic Fund Transfer Act (EFTA), creating new protections for remittance transfers.  Essentially, these changes are intended to maintain the current scope of transactions covered by the BSA recordkeeping and travel rules – including international wire transfers and cash-based transmittals of funds sent through money transmitters.

Why are these changes necessary?  Currently, BSA regulations exclude certain types of transactions and payment systems that are used mostly for domestic retail transactions and payments from the definitions of funds transfer and transmittal of funds.  But instead of listing the individual types of transactions that are excluded, the regulations refer to transactions covered by the EFTA, and the specific payment systems through which such transactions are covered (such as ATM, point-of-sale, and automated clearing house).

With Dodd-Frank’s amendments to the EFTA, and the implementation of the Regulation E rule on remittance transfers, some consumer transactions that were previously not covered under EFTA, such as international wires, will fall under the EFTA.  Without an amendment to the definitions of “funds transfer” and “transmittal of funds” in the BSA regulations, these transactions would soon fall outside the scope of the BSA recordkeeping and travel rule requirements.

From the proposed rule:

“The recent amendments to the EFTA and the recently finalized revisions to Regulation E, which are effective February 7, 2013, will result in an expanded scope of the transactions subject to the EFTA's remittance provisions. Some of these transactions have, to date, been covered by the regulations implementing the BSA. When the changes to Regulation E become effective, these transactions—which include international funds transfers sent by consumers through banks, and cash-based or account-based transmittals of funds sent by consumers through money transmitters—will fall outside the BSA rules' definitions of “funds transfer” and “transmittal of funds” (31 CFR 1010.100(w) and 1010.100(ddd)). To avoid this result, the Board and FinCEN are proposing to amend the definitions of funds transfer and transmittal of funds under the regulations implementing the BSA to limit the exclusion of EFTA-covered transactions from the recordkeeping and travel rules.”

(Keep in mind that the CFPB plans  to issue a proposed rule that would include an extension of the February 7, 2013 compliance date to sometime in the spring of 2013.  See our November 27th blog for more on this issue.)

For more details, see the proposed rule.  The deadline for submitting comments is January 25, 2013.

More FinCEN Guidance on SAR Filings Related to Mortgage Loan Fraud

Written by Shari R. Pogach, Regulatory Paralegal

FinCEN has put out another advisory on suspicious activity related to mortgage loan fraud.  FIN-2012-A009 consolidates information from previously issued reports and offers examples of common fraud schemes and potential “red flags” that may indicate mortgage loan fraud activity.  The advisory is meant to help credit unions be more thorough when completing any Suspicious Activity Reports (SARs) in connection with suspicious mortgage loan transaction activity.

The advisory provides a list and description of frequently reported or described schemes and scams from SARs that law enforcement has identified such as: 

“Foreclosure rescue scams:  Targets financially distressed homeowners with fraudulent offers of services or advice aimed at stopping or delaying the foreclosure process. Some of these scams require homeowners to transfer title – or make monthly mortgage payments – to the purported “rescuer,” rather than the real holder of the mortgage. Some foreclosure rescue scams require homeowners to pay fees before receiving “services,” and are known as “advance fee” schemes.

[...]

Home Equity Conversion Mortgage (HECM):  Financial institutions need be aware of illegal “reverse mortgage” schemes, which targets seniors who own a home or who are coerced into taking title to a home, for the purpose of stealing or otherwise acquiring some or all of the funds the senior receives from a government HECM program. HECM fraud may involve other frauds, including appraisal fraud (to increase the stated value of the home), investment fraud to acquire the HECM funds from the senior under the guise of future profits for the senior, and identify theft to acquire HECM funds without the knowledge of the senior who owns the property.”

In addition, FIN-2012-A009 gives examples of possible red flag indicators of illegal activity related to mortgage loan fraud.  The agency cautions that, “No single red flag will be definitive proof of such activity and many apply to multiple fraud schemes.”  Credit unions also need to look at red flag(s) in the context of other indicators and facts.

When completing a SAR on suspected loan fraud you should indicate the type of mortgage loan fraud with the appropriate code in the FinCEN SAR and give a detailed description in the narrative. For any activity without a corresponding code, identify it as “Other” and describe the activity in the narrative.

Where available, FinCEN also requests credit unions to include the Conference of State Bank Supervisors’ (CSBS) National Mortgage Licensing System and Registry (NMLS) assigned “NMLS Unique Identifier” in the narrative.  Both the Federal Housing Finance Agency (FHFA) and the Department of Housing and Urban Development (HUD) require that any loan purchased or securitized by Fannie Mae and Freddie Mac, or submitted for insurance by the FHA, must include the NMLS Unique Identifier for the company and individual mortgage loan originator (MLO) that originated the mortgage loan.

FinCEN Gives Tips on Filing Effective New FinCEN SARs

Written by Shari R. Pogach, Regulatory Paralegal

If you need some help with the new Suspicious Activity Reports (SARs), the 22^nd edition of FinCEN’s SAR Activity Review – Trends Tips & Issues (SAR Activity Review) is a good reference source.  Three articles located in the Issues & Guidance section of this edition offer guidance on completing the electronic FinCEN SAR.

The agency’s Analysis of Suspicious Activity Report (SAR) Inquiries Received by FinCEN’s Regulatory Helpline, on page 24, has guidance, instructions and other information for credit unions on the appropriate way to complete a FinCEN SAR.  There’s a special focus in this article on how to complete a specific “Step” or “Item” with the new form.

The second article, Suspicious Activity Report (SAR): Back to the Basics, starting on page 35, discusses SAR narrative in relation to the electronic form.  Although the narrative is still considered a critical component of a SAR filing, the number of allowed characters in the electronic form is less than that allowed in the old forms.  The reason for this change is you can now include a spreadsheet attachment as part of the narrative but the agency says this is to be a part of the narrative, not a substitute. 

The article also discusses “critical” fields on the form.  The BSA E-Filing System won’t accept filings that leave such fields blank as the boxes are necessary for technical purposes.  Credit unions must either put in the information or check the “unknown” (Unk.) box if provided for a critical field.  FinCEN states:

“This unknown box will supersede FinCEN’s previous guidance requesting that filers input “NOT APPLICABLE,” “UNKNOWN,” “NONE,” or “XX” in certain fields. For those fields that are not marked as “critical” for technical filing purposes, the BSA E-Filing System will accept reports in which these fields have been left blank.”

However, FinCEN still expects you to provide the most complete filing information available to you. And, even when it is not a “critical” field you should input the correct information or check off the “unknown” box.

On page 38, Writing Effective SAR Narratives, offers help to filers on writing more effective SAR narratives, using the reporting of suspicious activity concerning potentially unregistered money service businesses (MSBs) and counterfeit checks.  In addition, there are actual examples in each instance of an effective versus a less effective narrative.

FinCEN Roundtable Discussion on Customer Due Diligence; Webinars; BSA Blast

Written by Bernadette Clair, Regulatory Compliance Counsel

FinCEN Roundtable Discussion.  FinCEN will hold a roundtable discussion on October 29, 2012, at the Los Angeles Branch of the Federal Reserve Bank of San Francisco, regarding the Advance Notice of Proposed Rulemaking (ANPR) on Customer Due Diligence (CDD) Requirements for Financial Institutions. 

FinCEN seeks clarification primarily on issues dealing with beneficial ownership, risk mitigation, due diligence on trust accounts, and shell companies.  See the notice for the complete list of issues, and information on attending the hearing – requests to attend the roundtable discussion must be submitted to FinCEN no later than October 19, 2012.

FinCEN previously held a public hearing regarding the ANPR on July 31st.  A portion of the hearing is available via archived webcast, and a summary of the hearing is available here.

For more information on the ANPR itself, see our previous blogs on March 5th and March 6th.

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FinCEN Webinars.  FinCEN recently held informational webinars on the new Suspicious Activity Report (SAR), Currency Transaction Report (CTR), and Designation of Exempt Person (DOEP) form.  The webinars provided general information and guidance on filing the new reports.

Currently, credit unions have the option of submitting either the new reports or the legacy reports through the BSA E-Filing system.  However, after March 31, 2013, use of the new reports will be mandatory and the legacy reports will be removed from the BSA E-Filing System.

FinCEN’s archived webinar on the new SAR is available for viewing here, and the accompanying presentation materials may be found here.

FinCEN’s archived webinar on the new CTR and DOEP is available for viewing here, and the accompanying presentation materials may be found here.

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BSA Blast.  NAFCU Members, the October 2012 issue of the BSA Blast is available for download.  This issue features articles on BSA E-filing and the HSBC case study and report issued by the United States Senate Homeland Security and Government Affairs Permanent Subcommittee on Investigations.

CFPB By the Numbers; BSA Webcast for Directors and Supervisory Committee

Written by Steve Van Beek

Last week was NAFCU's Congressional Caucus - which is a great event for credit leaders to discuss their issues with their representatives, Senators and regulators.  As part of Caucus, I put together a short presentation and accompanying fact sheet in an attempt to quantify the burden on credit unions from the CFPB's actions (so far).  

Ultimately, the fast-paced schedule of Caucus did not allow the time for me to give the presentation.  Fear not, I'm sharing the information with you today in hopes that you will share with your senior management and Boards to show them the impact the CFPB is having on credit unions.   

• Consumer Financial Protection Bureau - By the Numbers Presentation
• Consumer Financial Protection Bureau - By the Numbers Fact Sheet

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BSA Webcast.  On October 10, 2012, NAFCU will be hosting a BSA Webcast designed for Board of Directors and Supervisory/Audit Committee members.  Of course, you do not need to attend for the live viewing and can use the webcast at your next Board or Supervisory Committee meeting to fulfill your training requirements.  Sign up by October 3rd and Save $100. 

 

FinCEN Webinars on E-Filing Process and Instructions for BSA Forms

Written by Shari R. Pogach, Regulatory Paralegal

FinCEN announced yesterday that it will be holding two upcoming informational webinars to discuss the BSA E-Filing process and filing instructions for the agency’s new Suspicious Activity Report (SAR), Currency Transaction Report (CTR) and Designation of Exempt Person (DOEP) forms.  

The webinar covering SARs will be held Tuesday, September 18, 2012 at 1:00pm ET.  The second webinar on the CTR and DOEP forms will be held on Tuesday, October 2, 2012 at 1:00pm ET.  FinCEN indicates agency  representatives will provide an overview of the E-Filing process and filing instructions as well as FAQs on completing the forms during each webinar.

FinCEN’s new forms are only available through the BSAE-Filing System.  It is recommended that you review the new forms before the webinars for any specific questions you may have for discussion.  The two webinars are meant for and oriented to personnel with BSA-related responsibilities. The agency indicates that space is also limited so you might want to go ahead and register for these sessions.

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In addition, FinCEN released FIN-2012-G005.  This guidance discusses the definition of motor vehicles, vessels, aircraft and farm equipment in relation to exempting cash transactions from the CTR requirement.  The agency stresses that this is general guidance and serves as an informal guide of examples of the purchase or sale of motor vehicles, vessels, aircraft and farm equipment that fall within ineligible business activities for CTR exemptions.  In case you were wondering, the list of examples include:  jet skis, paddle boats, hang gliders, hot-air balloons, golf carts, snow mobiles, motorized skateboards and Segways.

 

FinCEN Guidance on Mortgage Loan Fraud

Written by Shari R. Pogach, Regulatory Paralegal

FinCEN recently issued Advisory FIN-2012-A009 highlighting mortgage loan fraud activity when credit unions are filing Suspicious Activity Reports (SARs).  A consolidation of information from previously issued agency reports, the advisory provides examples of common fraud schemes and potential “red flags” for mortgage loan fraud activity.

The advisory identifies and briefly describes nine types of mortgage loan fraud based upon descriptions from previously filed SARs or as identified by law enforcement including:  occupancy fraud, income fraud, appraisal fraud, employment fraud, liability fraud, debt elimination schemes, foreclosure rescue scams, social security number fraud and other identity theft, and home equity conversion mortgage. 

In addition, FinCEN offers examples of possible red flag indications of fraudulent schemes related to mortgage fraud.  However, the agency also cautions that these indicators should not be considered exhaustive nor should any single red flag be considered as definite proof of fraudulent activity.  In fact, many of the provided examples could apply to multiple fraud schemes.  FinCEN notes that a credit union must look at any red flag(s) in the context of other indicators and facts, and whether this might indicate the need for further due diligence or require a decision as to the filing of a SAR.

In completing a mortgage loan fraud activity SAR, credit unions should indicate the type of mortgage loan fraud by entering the appropriate code and providing a detailed description in the narrative.  For activity that does not have a corresponding code, credit unions should identify “Other” and describe the activity in the narrative.  And, where available, credit unions are requested to include in the SAR narrative portion, the Conference of State Bank Supervisors’ (CSBS) National Mortgage Licensing System and Registry (NMLS) assigned “NMLS Unique Identifier.”

All in all, FinCEN’s Advisory FIN-2012-A009 contains good Bank Secrecy Act (BSA) compliance guidance for credit union mortgage loan originators. 

FinCEN’s Rule on Non-Bank Residential Mortgage Lenders and Originators

Written by Bernadette Clair, Regulatory Compliance Counsel

Earlier this month, FinCEN issued a notice and reminder to non-bank residential mortgage lenders and originators (RMLOs) to remind them of their new compliance obligations under FinCEN’s regulations.  On February 14, 2012, FinCEN published a final rule requiring RMLOs to develop an anti-money laundering (AML) program and report suspicious activity.  The effective date of this rule was April 16, 2012, and the compliance date was August 13, 2012.

The rule does not impose new requirements on credit unions which are already subject to AML and suspicious activity reporting requirements.  However, the rule does apply to credit union service organizations (CUSOs) involved in residential mortgage services that meet the definition of an RMLO under 31 CFR 1010.100(lll)(1):

“(1) Residential mortgage lender or originator. A residential mortgage lender or originator includes:

(i) Residential mortgage lender. The person to whom the debt arising from a residential mortgage loan is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement, or to whom the obligation is initially assigned at or immediately after settlement. The term “residential mortgage lender” shall not include an individual who finances the sale of the individual's own dwelling or real property.

(ii) Residential mortgage originator. A person who accepts a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan.”

A CUSO that meets the definition of an RMLO must establish an AML program that includes:

• Internal policies, procedures, and controls
• A designated compliance officer
• Ongoing training
• Periodic independent testing

 RMLOs are also required to file suspicious activity reports (SARs) but they are not required to comply with currency transaction reporting (CTR) requirements.  (Note: these large currency transactions remain subject to reporting on FinCEN Form 8300).

 In addition to the notice and reminder, FinCEN has created a page on its website with more information for RMLOs subject to the rule.

Branch Manager Offers Personal Structuring Service

Written by Shari R. Pogach, Regulatory Paralegal

            A former branch manager of J.P. Morgan Chase Bank (Chase) in West Palm Beach, Florida, was sentenced on May 25, 2012, to 57 months in prison, followed by two years of supervised release.  Mr. Carey Robinson was sentenced after having pled guilty to one count of structuring financial transactions that caused Chase not to file required Currency Transaction Reports (CTRs).

            According to Southern District of Florida court documents, Robinson was a bank manager at Chase from 2008 through May 2011.  With a tip from a former Chase employee, the Internal Revenue Service, Criminal Investigation (IRS-CI) began an investigation.  The IRS-CI found that around May 2009, Robinson started exchanging small bills for larger bills for a bank customer.  Initially the customer would bring stacks of $20 bills in a brown bag to the bank once or twice a week.  Robinson would take the customer into his office, discreetly count the cash and then direct a vault custodian to change the $20 bills into $100 bills.  Apparently for some of the exchanges, the customer would wait at the bank while the vault manager performed the exchange, then collect the new bills and leave.  In other instances, the customer would drop off the cash and leave the bank.  The customer would then collect the $100 bills from Robinson later in the day at a parking lot near Robinson’s house. 

             Later on, the customer stopped coming to the bank so as not to arouse the suspicions of the other bank employees.  During this period, Robinson would meet the customer at a prearranged spot and pick up the cash.  Then Robinson would typically bring the cash into the branch early in the morning before any of the other employees arrived.   He would sometimes place the $20 bills inside the teller’s drawer and lock it.  When the teller arrived at work, he would give her the key and direct her to exchange the $20 bills for $100 bills.  Initially the teller would use the $100 bills in her cash drawer or purchase additional $100 bills from the vault in order to make the exchange.  Robinson later directed the teller to make the exchange with $100 bills from the ATM deposits rather than from the vault.  Robinson would then deliver the $100 bills to the customer at another location.

            Robinson exchanged $20 bills for $100 bills for this customer from approximately May 2009 through May 2011 with the assistance of several other Chase employees.  Although the BSA requires the filing of CTRs for all cash transactions over $10,000, and most of these exchanges almost always involved more than $10,000, Robinson ensured that the bank never filed a single CTR on any.  In fact, he would tell the bank employees that CTR filings were not necessary for these exchanges.

             Bank surveillance footage from cameras installed in Robinson’s office and the vault area of the bank corroborate much of the information provided by bank employees.  Videotape in one example shows Robinson removing stacks of $20 bills from a bag under his desk, placing the cash inside a blue Chase bag and then delivering it to a teller.  The tape also shows the teller returning to Robinson’s office with the cash.  Robinson was also recorded on videotape walking to the vault, collecting stacks of $100 bills from a teller, returning to his office and then removing the stacks of cash from his pocket.  Video surveillance also shows Robinson paying the teller for conducting transactions.

             When interviewed by IRS-CI agents, Robinson admitted that he had exchanged almost $1 million for this customer on a weekly basis or sometimes every couple of weeks.  Most exchanges involved amounts between $30,000 and $40,000 but the largest single exchange was for $100,000 with another large exchange involving $80,000.  He also admitted that several bank employees assisted him with the exchanges and he would compensate them for their help.  In addition, Robinson admitted that the transactions were never recorded in the Teller Express computer system; therefore no CTRS were ever filed.

 Another instance of reality trumping fiction……………………

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This originally appeared in the July issue of the BSA Blast, a quarterly newsletter on BSA issues and a NAFCU member benefit.  If you’d like an email notice when the latest issue is available for download, simply drop us a line at [email protected]. 

FINCEN Reviews Impact of SAR Confidentiality Rule

Written by Shari R. Pogach, Regulatory Paralegal

Last December, FinCEN assessed a $25,000 civil money penalty against a bank employee because he violated the Bank Secrecy Act (BSA).  Not only did Frank Mendoza reveal the existence of a Suspicious Activity Report (SAR) by contacting the subject of the report, he then solicited bribes from the subject in return for a promise to assist with any bank proceedings or federal criminal investigation.  The assessment against Mendoza is a clear indication of the agency’s willingness to use its authority to assess a civil money penalty against anyone involved in an unauthorized disclosure of a SAR.

FinCEN's Rule on Confidentiality.  FinCEN recently released a review and evaluation on the impact of its final rule, effective January 3, 2011, on the confidentiality of SARs.  In the 16 months after issuing the final rule, the agency’s regulatory helpline received 338 SAR confidentiality-related inquiries, an increased average of 18 per month, reflecting a greater interest in understanding and applying the new rule, ensuring SAR confidentiality according to FinCEN. Inquiries received after the issuance of the final rule were similar to those prior to the final rule. About 41 percent (140) of callers sought assistance in appropriately responding to subpoenas received from lawyers. Inquiries regarding responding to law enforcement requests for SARs increased to 32 percent (108), while callers seeking assistance in determining their ability to share SARs with auditors and regulators decreased to 8 percent (28). Another 8 percent of callers sought assistance with sharing SARs with their institutions’ legal counsel.  During the 16-month period of the review, as well as the preceding 12-month period, depository institutions accounted for 73 percent of SAR confidentiality-related inquiries.

Additional Guidance.  In addition to the final rule, FinCEN has published the following related advisories and guidance concerning SAR confidentiality:

FIN-2010-A014 - Maintaining the Confidentiality of Suspicious Activity Reports

FIN-2010-G006 - Sharing Suspicious Activity Reports by Depository Institutions with Certain U.S. Affiliates

Notice of Availability of Final Interpretative Guidance—Sharing Suspicious Activity Reports by

Depository Institutions and Securities Broker-Dealers, Mutual Funds, Futures Commission Merchants, or Introducing Brokers in Commodities With Certain U.S. Affiliates

FIN-2012-A002 - Subject: SAR Confidentiality Reminder for Internal and External Counsel of Financial Institutions

                                                                                 ***

BSA Blast.  The July quarterly edition of NAFCU’s BSA Blast is now available for download and includes a new BSA quiz. 

NCUA's July Board Meeting; ATM Disclosures; HSBC Case History - Senate Hearing on BSA/AML

Written by Steve Van Beek

Yesterday, NCUA released the agenda for their July 24th Board Meeting.  Note: This meeting will occur on Tuesday, July 24th rather than the usual Thursday timeframe.  Below is the agenda for the very busy meeting:

1. Board Briefing – Interagency Proposal, Truth in Lending Act.
2. Interest Rate Ceiling Determination.
3. Proposed Rule – Section 701.14 of NCUA’s Rules and Regulations, “Troubled Condition” Definition.
4. NCUA’s Rules and Regulations, Access to Emergency Liquidity.
5. 2012 Temporary Corporate Credit Union Stabilization Fund Assessment.
6. Quarterly Insurance Fund Report.
7. Reprogramming of NCUA’s Operating Budget for 2012.

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ATM Disclosure Fix.  A new bill, S. 3394, was introduced in the Senate which combines the ATM disclosure fix and the CFPB privileged information bills.  Additional details can be found in the NAFCU Today.    

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Yesterday, the Senate's Homeland Security & Governmental Affairs Permanent Subcommittee on Investigations held a hearing on "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History."  The description of the hearing was:

"The Subcommittee plans to hold a hearing on the money laundering and terrorist financing vulnerabilities created when a global bank uses its U.S. affiliate to provide U.S. dollars, U.S. dollar services, and access to the U.S. financial system to high risk affiliates, high risk correspondent banks, and high risk clients, using HSBC as a case study."

The story was also discussed briefly on NPR yesterday morning.  However, this barely scratches the surface of the 340-page Senate Report.  The BBC has additional information and details on the Report.     

A summary can also be found in the Senate's Press Release prior to the hearing.  

FFIEC Statement on Cloud Computing; FinCEN Hearing on Customer Due Diligence

Written by Bernadette Clair, Regulatory Compliance Counsel

Earlier this week, the Federal Financial Institutions Examination Council (FFIEC) issued a statement addressing risk management of outsourced cloud computing activities.

Current guidance contained in the FFIEC Information Technology Examination Handbook, and in particular the Outsourcing Technology Services Booklet (“Outsourcing Booklet”), already addresses cloud computing.  This statement is intended to provide an expanded discussion of the risks, as well as key elements of outsourced cloud computing implementation and risk management as they relate to the existing guidance.

Covered topics include:

• Due Diligence
• Vendor Management
• Audit
• Information Security
• Legal, Regulatory, and Reputational Considerations
• Business Continuity Planning

In particular, the section on due diligence caught my eye, noting the responsibility of the board and management “to ensure that the third-party activity is conducted in a safe and a sound manner and in compliance with applicable laws and regulations.”  Potential cloud computing issues noted under the due diligence section include:

 “Data classification: How sensitive is the data that will be placed in the cloud (e.g., confidential, critical, public) and what controls should be in place to ensure it is properly protected? Does the cloud service provider appropriately encrypt or otherwise protect non-public personal information (NPPI) and other data whose disclosure could harm the institution or its customers?

 Data segregation: Will the financial institution’s data share resources with data from other cloud clients? For example, will the data be transmitted over the same networks, and stored or processed on servers that are also used by other clients? If so, what controls does the service provider have to ensure the integrity and confidentiality of the financial institution’s data?

 Recoverability: How will the service provider respond to disasters and ensure continued service? Do the financial institution’s disaster recovery and business continuity plans include appropriate consideration of this form of outsourcing, the service provider’s disaster recovery and business continuity plans, and the availability of essential communications links?”

 See the statement for the complete discussion.

 ****

FinCEN Hearing.  FinCEN intends to hold a series of hearings on issues raised by commenters regarding the Advance Notice of Proposed Rulemaking (ANPR) on Customer Due Diligence (CDD) Requirements for Financial Institutions.  The first hearing is scheduled for July 31st.

FinCEN seeks clarification primarily on issues dealing with beneficial ownership, risk mitigation, due diligence on trust accounts, and shell companies.  See the notice for the complete list of issues, and information on providing comments or attending the hearing.

For more information on the ANPR itself, see our previous blogs on March 5th and March 6th.

BSA E-Filing Hits a Snag; NAFCU's Congressional Caucus

Written by Bernadette Clair, Regulatory Compliance Counsel

As of July 1st, e-filing is mandatory for Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs).  FinCEN issued a final reminder on June 29th and recently blogged about the benefits of e-filing in a July 2nd Treasury Notes blog.  Unless your credit union has received an exemption from FinCEN, be sure these reports are being filed electronically.

Coincidentally, you may have noticed a few glitches in your ability to access the BSA E-Filing System and contact FinCEN over the past week.  FinCEN is aware of the problem and has posted the following notice on its website, along with alternative contact information if you need to reach them with questions:

"Important Notice: FinCEN's BSA E-Filing System is currently experiencing extremely high usage. This may result in intermittent delays in a filer's ability to submit required reports or complete the on-line application process for a new BSA E-Filing System account. We are aware of these intermittent delays and are actively working to resolve them. 

FinCEN also is currently experiencing a significantly higher than normal call volume into our E-Filing Help Desk which is also impacting FinCEN's phone system. This is resulting in extended hold times at the Helpdesk and some FinCEN callers receiving busy signals. We are aware of the problem and are actively working to resolve it.

If you experience problems getting through on the phone, you can provide your specific question or issue with your full contact information (including return phone number) to the respective email addresses below and we will make every effort to respond to your issues in a timely manner.

• For E-File technical questions: [email protected]
  
• For regulatory inquiries related to form completion or selection: [email protected]
• For form completion or selection issues specific to FBAR: [email protected]
• For law enforcement related matters: [email protected]
• 314 Inquiries from Law Enforcement: [email protected]
• 314 Inquiries from Financial Institutions: [email protected]
• General FinCEN Inquiries: [email protected]
• For any other matters, you can also send your inquiry to [email protected]"

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NAFCU's Congressional Caucus.  NAFCU’s 2012 Congressional Caucus is just around the corner - September 11-14 in Washington, D.C.  Caucus is the perfect time for your credit union to meet with your Senators and Representatives and let them know about the increasing regulatory burden on your credit union.  Sign up by July 20th and Save $100.  

CFPB Consumer Complaint Database Continued; Hearing on SBA; BSA Webcast

Written by Michael Coleman, Regulatory Compliance Counsel

Yesterday, the Consumer Financial Protection Bureau (CFPB) launched its new Consumer Complaints Database for credit cards, you can read about the details of the Complaint Database in our blog post from yesterday. Note that the database will only contain information of credit unions directly supervised by the CFPB, those with over $10 billion in assets.

Regarding the purpose of the database, the CFPB stated that: "Our goal is to improve the transparency and efficiency of the credit card market to further empower American consumers." You can take a look at their policy statement for more details. The CFPB has proposed adding complaints to the database about other financial products and services in the near future. 

At the top of the Complaint Database site there is the following disclosure: 

"This contains data from the consumer credit card complaints received by the Consumer Financial Protection Bureau. We do not verify the accuracy of these complaints, but we do take steps to confirm a commercial relationship between the consumer and the identified company."

The purpose of the disclaimer is to let people know that what is listed in the database are complaints, but more importantly, that the CFPB is not asserting the validity of the complaint. You may be asking yourself "Well, isn't this like trying to unscramble an egg?" A good question. The disclosure of unfounded compliants could impact a financial institution's reputation - an issue that NAFCU strenuously raised in our comment letter to the CFPB. 

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Testimony on the Hill. Thursday June 21, 2012, Robert Marquette, president and CEO of Members 1st FCU in Mechanicsburg, Pa., and a NAFCU Board Member, will testify before the House Subcommittee on Investigations, Oversight and Regulations concerning credit unions' work with the Small Business Administration (SBA). You can read more about the upcoming testimony in this NAFCU Today article.  

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NAFCU's BSA Webcast.  Now is the perfect time to get your annual BSA training.  Check out NAFCU's June 27th webcast: BSA for Compliance Experts.  Sign up by TODAY, June 20, to Save $100!

FinCEN Updates Guidance on Determining Eligibility for CTR Exemptions

Written by Bernadette Clair, Regulatory Compliance Counsel

FinCEN recently issued revised guidance designed to help “banks” (defined to include credit unions) determine whether a customer is eligible for exemption from currency transaction reporting (CTR) requirements.  The changes include:

• Updated citations to reflect the final rule transferring FinCEN’s regulations from 31 C.F.R. § 103 to 31 C.F.R. Chapter X, effective back in March 1, 2011; and
• Amended guidance dealing with exemption eligibility for payroll customers in accordance with FinCEN’s recent final rule amending 31 C.F.R. § 1020.315.  See our previous blog post on June 6th for more details about this change.

If you haven’t had an opportunity to review this guidance previously, it’s a useful refresher on substantive changes made to the CTR exemption process back in 2009.  These changes were designed to simplify the process, and your credit union may be able to take advantage of these changes to alleviate some of the CTR filing burden.

Here’s an excerpt from the guidance summarizing the 2009 changes:

“Elimination of designation and annual review for most Phase I customers.⁷ Banks are no longer required to file a designation of exempt person ("DOEP") report for, or conduct an annual review of, customers who are other depository institutions operating in the United States, U.S. or State governments, or entities acting with governmental authority. The DOEP filing and annual review are still required for businesses listed on a major national stock exchange ("listed businesses"), non-listed businesses, and payroll customers.

"Frequently" decreased to five reportable transactions. Banks may designate an otherwise eligible non-listed business customer or payroll customer⁸ for exemption after the customer has within a year conducted five or more reportable transactions in currency (previously, eight or more reportable transactions were required).

Waiting time for eligibility decreased . Banks may use a hybrid approach to designate an otherwise eligible customer for a Phase II exemption: The customer may be eligible for exemption after maintaining a transaction account for two months (previously twelve months were required); or, the customer may be eligible for exemption in less than two months if the bank conducts a risk-based analysis to form a reasonable belief that the customer has a legitimate business purpose for conducting frequent or regular large currency transactions.

Biennial renewals eliminated. Banks are no longer required to file a biennial renewal or record and report a change of control for an exempt Phase II customer.” (footnotes omitted).

For those of us who are visual learners, the guidance also includes a handy chart of the circumstances under which a customer may be treated as exempt.

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Treasury OFAC Settlement with ING Bank; OFAC Compliance Programs

Written by Michael Coleman, Regulatory Compliance Counsel

Yesterday, June 12^th, 2012, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with ING Bank N.V. (ING Bank) for potential violations of U.S. sanctions in the amount of $619 million, the largest OFAC settlement of any kind to date. The settlement resolves OFAC’s investigation into ING Bank’s intentional and systemic violation of U.S. sanctions. In light of this monumental settlement, I thought it might be useful to highlight some guidance on OFAC compliance programs.

OFAC’s Frequently Asked Questions directory contains a large number of useful Q&A’s concerning OFAC requirements.  If you have not visited the site before it is worth taking a look. Here is a Q&A from the directory concerning financial institutions’ OFAC compliance programs:

“25. Does OFAC itself require that banks set up a certain type of compliance program?

No. There is no single compliance program suitable for every financial institution. OFAC is not itself a bank regulator; its basic requirement is that financial institutions not violate the laws that it administers. Financial institutions should check with their regulators regarding the suitability of specific programs to their unique situations. [09-10-02]”

As the OFAC Q&A points out, there are no specific regulations requiring compliance with OFAC requirements. Rather, financial institutions, including credit unions, should look to their regulators for their OFAC compliance expectations. NCUA’s expectations regarding a credit union’s OFAC compliance program can be found in the Federal Financial Institutions Examination Council (FFIEC), BSA/AML Examination Manual. The FFIEC BSA/AML Examination Manual contains an OFAC Overview section which talks about OFAC compliance programs, it reads:

“OFAC Compliance Program

While not required by specific regulation, but as a matter of sound banking practice and in order to ensure compliance, banks should establish and maintain an effective, written OFAC compliance program commensurate with their OFAC risk profile (based on products, services, customers, and geographic locations). The program should identify higher-risk areas, provide for appropriate internal controls for screening and reporting, establish independent testing for compliance, designate a bank employee or employees as responsible for OFAC compliance, and create training programs for appropriate personnel in all relevant areas of the bank. A bank’s OFAC compliance program should be commensurate with its respective OFAC risk profile.” (emphasis added).

As the guidance indicates, a credit union’s OFAC compliance program is a risk based program in nature. The OFAC overview also contains a section on Internal Controls, and states that an effective OFAC compliance program should include the following internal control elements:

• Identifying and reviewing suspect transactions
• Updating OFAC lists
• Screening Automated Clearing House (ACH) transactions
• Reporting
• Maintaining license information

The FFIEC BSA/AML Examination Manual OFAC Overview provides a very good summary of NCUA’s expectations concerning OFAC compliance, I would suggest taking a look through it if you have not already. OFAC compliance is sure to continue to be a hot topic with NCUA in examinations, and as this U.S. Treasury settlement with ING Bank shows, non-compliance can be costly.  

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NAFCU's BSA Webcast.  Now is the perfect time to get your annual BSA training.  Check our NAFCU's June 27th webcast: BSA for Compliance Experts.  Sign up by June 20 to Save $100!

FinCEN Issues Final Rule on CTR Exemption for Payroll Customers

Written by Bernadette Clair, Regulatory Compliance Counsel

On Monday, FinCEN issued a final rule that may ease the burden of filing CTRs on payroll customers.  The final rule amends regulations allowing depository institutions to exempt transactions of certain payroll customers from the requirement to report currency transactions in excess of $10,000.

Under the final rule, the provision dealing with exemptions for payroll customers has been amended to replace the term “regularly” with “frequently.” The term “regularly” was never formally defined as it applied to the payroll customer exemption, and FinCEN indicates that the lack of a specific definition may have prevented institutions from taking advantage of the exemption.  The change also brings the payroll customer exemption in line with the terminology used in the non-listed business exemption.

With the change, the payroll exemption provision will read as follows:

“(7) With respect solely to withdrawals for payroll purposes from existing exemptible accounts, any other person (for purposes of this section, a “payroll customer”) that:

(i) Maintains a transaction account, as defined in paragraph (e)(9) of this section, at the bank for at least two months, except as provided in paragraph (c)(2)(ii) of this section;

(ii) Operates a firm that frequently withdraws more than $10,000 in order to pay its United States employees in currency; and

(iii) Is incorporated or organized under the laws of the United States or a State, or is registered as and eligible to do business within the United States or a State.”  31 CFR 1020.315(b)(7) (emphasis added).

FinCEN states that its prior interpretation of the term “frequently” used in the non-listed business exemption to mean five or more times a year would equally apply to exemption determinations in the payroll customer context.  Assuming the other prerequisites are met, an institution could exempt the currency transactions of a payroll customer if the customer withdraws currency five or more times a year in order to pay its employees.

The final rule takes effect upon publication in the Federal Register.

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NAFCU BSA Webcast.  NAFCU’s Bank Secrecy Act Compliance for Experts webcast is Wednesday, June 27th, from 2:00 to 3:30 p.m. EDT.   If you can't make the live webcast, you can always purchase and view the on-demand webcast at a later date.

Upcoming Hearings, Webcasts, and Comments

Written By JiJi Bahhur, Regulatory Compliance Counsel

Upcoming Hearings. On Wednesday, June 6, there are two hearings that you may find of interest.

From 10am to 12pm, the Senate Banking Committee plans a hearing on "Implementing Wall Street Reform: Enhancing Bank Supervision and Reducing Systemic Risk," with Consumer Financial Protection Burean Director Richard Cordray among the witnesses. Although credit unions aren't affected by this part of Dodd-Frank, NAFCU is monitoring developments in this area for its market impact on cooperatives.

Then, from 2pm to 3pm, the Committee on Financial Services plans a hearing on "An Examination of the Federal Reserve's Final Rule on the CARD Act's 'Ability to Repay' Requirement."  This issue was discussed in NAFCU's Comment Letter to the CFPB on Regulatory Streamlining (see page 3).

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Upcoming NAFCU Webcasts. NAFCU has several compliance webcasts on the horizon that might be of interest:

• June 13, 2012 - Building an Effective Enterprise Risk Management Program

• June 20, 2012 - The Impact, Expectations and the Future of the CFPB on Credit Unions

• June 27, 2012 - Bank Secrecy Act Compliance for Experts

• July 11, 2012 - Mid-Year Regulatory Update with NAFCU

Note that these webcasts are open to all credit unions, regardless of membership or charter type.

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NAFCU Members. NAFCU's Regulatory Alert on NCUA's 2012 Regulatory Review is available. The NCUA conducts a review of one-third of its existing regulations on an annual basis and NAFCU is closely reviewing these regulations in order to select sections that have proved especially problematic for credit unions in recent years. Comments are due to NAFCU on July 6, 2012. NCUA is accepting comments until August 3rd.

Suspicious Activity Reports – Journey into the Great Abyss

Written by Bernadette Clair, Regulatory Compliance Counsel

If you’ve ever wondered what happens to all those SARs credit unions file, day in and day out, you’re not alone.  Given the regulatory burden and cost associated with BSA compliance, it isn’t any wonder that every once in a while someone wonders…is anybody reading this stuff? Or are we just wasting our time filing reports that fall into some black hole never to be seen again?

For those of us who like to see tangible results, law enforcement case examples provided by FinCEN confirm SARs don’t fall into a black hole – they are used by law enforcement and can lead to investigations, indictments, and convictions.  These case examples can be found in FinCEN’s periodic SAR Activity Review – Trends, Tips, & Issues (access the most recent issue here).  Current and past case examples are also available on FinCEN’s website here. 

 Here’s a list of the most recent law enforcement case examples from the 21^st issue of the SAR Activity Review – Trends, Tips, & Issues:

• Proactive Suspicious Activity Report Review Leads to Indictments in “Cash Back” Mortgage Fraud Scheme
• Bank Secrecy Act Records Detail Transactions Related to Illicit Smoke Shop Sales
• Bank Secrecy Act Document Analysis Helpful in Fraud Case
• FinCEN Information Helps Jury Convict Cocaine Trafficker
• Proactive SAR Review Leads to Guilty Pleas in Structuring, Bank Fraud Case
• Suspicious Activity Reports Document International Payments Underlying Illicit Human Growth Hormone Trafficking
• Proactive SAR Review Identifies Retired U.S. Military Officer Involved in Bribery Scheme

These case examples also serve as a great resource for coming up with ideas for training credit union staff and directors on BSA compliance issues.

CFPB Looking at Prepaid Cards; ERM and CFPB Webcasts; 2012 Seminar

Written by Steve Van Beek

Prepaid Cards Field Hearing.  The CFPB recently announced a field hearing on prepaid cards - which will be held today in Durham, North Carolina starting at 12:00 p.m. EDT.  The CFPB's blog indicates to check back if you want to view the live broadcast.  [As of now, there is no link to the feed.  But, past live feeds were available here if you want to try around noon]. 

Upcoming Prepaid Card Regulation.  In conjunction with today's field hearing, the CFPB announced its intent to regulate the prepaid card market.  The CFPB announced an Advanced Notice of Proposed Rulemaking (ANPR) which is an initial step in the rulemaking process and is usually one where an agency gathers information about the market - prepaid cards in this situation - in anticipation of future regulation.  

In addition to the ANPR, the CFPB issued a Fact Sheet on Prepaid Cards and a Ask CFPB: Prepaid Cards search function on their website.   

By the way - it is good to see the CFPB's website is capable of having a search bar!  I can't wait until they upgrade to the third version of their website and provide a search bar to help credit unions and other entities find the information they need.  

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NAFCU Webcasts.  NAFCU has a full slate of webcasts for June.  Remember, all of NAFCU's events and conferences are open to anyone - this includes webcasts.  

• June 13 - Building an Effective Enterprise Risk Management Program
• June 20 - The Impact, Expectations and Future of the CFPB on Credit Unions
• June 27 - BSA for Experts - Registration available soon!

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Regulatory Compliance Seminar.  Also, don't forget to look at NAFCU's 2012 Regulatory Compliance Seminar in Seattle, Washington.  Save $100 when you register by August 31st!  For potential topics, check out this past blog post.

BSA E-Filing Reminder; ATM Fee Disclosure Bill Update

Written by Bernadette Clair, Regulatory Compliance Counsel

FinCEN has issued a notice reminding financial institutions that effective July 1, 2012, most Bank Secrecy Act (BSA) reports must be filed electronically.  In the notice, FinCEN reiterates that as of the effective date, institutions must submit most reports electronically unless they have been granted a temporary exemption.

If you need more information on this requirement, our March 7^th blog included links to FinCEN’s final rule, along with a few E-filing resources.

FinCEN Webinar.  FinCEN held a webinar earlier this month regarding the technical specifications of the new SAR, CTR and DOEP forms.  This webinar was geared toward IT folks, so be sure to pass this along to anyone at your credit union who fits the bill.

Topics covered in the webinar include:

• Overview of the E-Filing specifications for FinCEN’s new CTR, SAR, and DOEP.
• Overview of BSA E-Filing Test site and Testing Process.
• FAQs about the E-Filing specifications.

The recorded webcast can be viewed here.

Note:  FinCEN will be conducting a future webinar for compliance professionals with BSA-related responsibilities.  The webinar will discuss the E-Filing process for the new CTR and SAR. 

Who do I call with Technical Questions related to E-Filing?  FinCEN provides the number to its BSA E-Filing Help Desk for technology-related questions:  1-866-346-9478.

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ATM Bill Update.  Last Thursday, Sen. Michael Johanns, R-Neb., ranking member of the Senate Banking Subcommittee on Security, International Trade and Finance, introduced bill S. 3204 to end the requirement to display a fee-notice placard on automated teller machines.   Steve blogged about a similar bill, H.R. 4367, last month. 

Both S. 3204 and H.R. 4367 would revise the Electronic Funds Transfer Act by eliminating the placard fee-notice rule. If the legislation is enacted, ATM owners would only be required to provide notices of fees on screen at a point when consumers can still opt to cancel their transactions.

NAFCU is urging credit unions to contact their lawmakers to urge support for S. 3204 and H.R. 4367. Dial 202-224-3121, or use our Take Action tools.

FinCEN Clarifies Timeframe for Filing SARs on Continuing Suspicious Activity

Written by Bernadette Clair, Regulatory Compliance Counsel

FinCEN recently announced the release of its 21^st issue of the SAR Activity Review – Trends, Tips, & Issues. Most of the issue focuses on Money Services Businesses (MSBs) – and is a good read if your credit union provides services to MSBs.

However, I’d like to draw your attention to guidance FinCEN provides in this issue related to the timeframe for filing SARs on continuing suspicious activity.  The guidance is designed to address uncertainty over whether ongoing activity SARs should be filed every 90 days, or after 90 days of review.

FinCEN clarifies that ongoing activity SARs should be filed no later than 120 days after the date of the previously related SAR filing, allowing for 90 days of review.  Financial institutions may also file SARs on continuing activity earlier than the 120 day deadline if the institution believes the activity warrants earlier review by law enforcement.

From the guidance starting on page 53 of this issue:

“The phrasing of the continuing activity SAR in the April 2005 article more accurately reflects FinCEN’s original intent in providing administrative relief. Financial institutions with SAR requirements may file SARs for continuing activity after a 90 day review with the filing deadline being 120 days after the date of the previously related SAR filing. Financial institutions may also file SARs on continuing activity earlier than the 120 day deadline if the institution believes the activity warrants earlier review by law enforcement. All other previously published language by FinCEN addressing the continuing activity SAR that is not related to the time period of review, e.g. cross-referencing previously filed SARs in the narrative or how FinCEN interprets the term “ongoing,” still apply."  (emphasis added).

I'm sure most credit unions have been filing ongoing activity SARs within the 90 day window, so this latest guidance is a welcome break.

Have a great weekend!

A Whole Lot of FYIs

Written By JiJi Bahhur, Regulatory Compliance Counsel

 

I thought I’d keep it simple today with a couple…okay, a whole lot of…FYIs that you may (or may not) find interesting.

  

CFPB “Sweepstakes” Scam

The CFPB has issued a notice stating that if you receive a call from the “CFPB” in regards to a “sweepstakes” offer, it is a scam. Be careful not to provide any personal, consumer, or commercial information.

 

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FinCEN SAR Activity Review – By The Numbers Issue 17

FinCEN has released its seventeenth issue of The SAR Activity Review – By the Numbers (BTN). The report is only published once a year and provides numerical data on SAR filings from the last 12 months. It is available here.

 

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NCUA’s Office of Minority and Women Inclusion

In April, NCUA filed its first report to Congress on its Office of Minority and Women Inclusion (OMWI) and is expected to issue a proposal for comment in the future on standards for assessing credit unions' diversity policies. NAFCU wrote a letter to NCUA addressing OMWI’s assessment of credit unions’ diversity policy. March 29, 2012 - OMWI Assessment of CU's Diversity Practices.

 

NCUA’s OMWI was created in accordance with the Dodd-Frank Act. Its focus is diversity, civil rights and the promotion of minority and women hiring and contracting practices throughout the credit union industry. 

 

NCUA’s 2011 annual report notes actions taken thus far toward developing standards for assessing the diversity policies and practices of entities it regulates. It also looks at steps taken within the agency to promote diversity in its own hiring and procurement practices.

 

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NCUA’s Plain Writing Act.

If you remember from Steve’s blog post on April 30^th, we were waiting to see NCUA’s Annual Report on the Plain Writing Act. That report is now available on NCUA’s webpage dedicated to the Plain Writing Act.

 

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I could keep going, but I think I’ll stop right there for now. Okay, wait…one more...FYI: I’m having twins (a boy and a girl)!

 

 

BSA Due Diligence ANPR; FFIEC IT Handbook; Flood Insurance Expiring Soon

Written by Steve Van Beek

FinCEN has extended the comment period for their Advanced Notice of Proposed Rulemaking (ANPR).  The comment period was scheduled to end on May 4th but FinCEN will accept comments for an additional 30 days.

NAFCU's comment letter has already been submitted and can be found here.  I particularly enjoyed this section which discusses FinCEN's weak cost-benefit analysis.   

"Further, NAFCU believes that this rulemaking is representative of exactly the type of regulation that President Obama sought to address in two executive orders, both issued in 2011, establishing a reasonable, but firm, standards that both executive and independent agencies should meet before issuing regulations.  Executive Orders 13563 and 13579 specifically direct executive and independent agencies to conduct careful analysis of the likely consequences of regulation, including the cost and benefits.  The ANPR places far too much weight on the benefits of having a standard regime across regulated institutions, and offers very little discussion, let alone much weight, to the cost that many institutions would bear.    

The Executive Orders also direct agencies to ensure regulations promote economic growth, innovation, competitiveness and job creation.  The ANPR would achieve none of these goals.  In fact, these goals would be undermined as the proposal would force credit unions to devote more financial and human capital to regulatory compliance rather than to lending and other products and services."

If you missed it earlier, be sure to check out this NAFCU Compliance Blog post which roundups up recent BSA changes and future changes.  

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IT Exam Handbook.  The FFIEC announced recent updates to their IT Examination Handbook.  They have also added a "What's New" page that will track changes in between formal updates.  This page also includes a Change Log that might be useful.

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Flood Insurance.  The latest temporary Band-Aids for the National Flood Insurance Program (NFIP) are set to come off May 31st.  Congress needs to act soon to prevent a lapse in flood insurance coverage.  NAFCU has been pushing for a long-term extension as well as urging Congress to act prior to lapse.  For more, see this Joint Letter sent to the Senate yesterday.  

In June 2010, NCUA issued Letter to Credit Unions 10-CU-08 which addresses issues related to flood insurance lapses.  This Letter and the Enclosure might be good ones to keep handy as May rolls along.  

Compliance Resources: Newsletters; Webinars; Webcasts

Written by Steve Van Beek

Today's post seeks to aggregate some useful compliance resources. 

NCUA Listening Session.  The first of NCUA's six listening sessions is today in Boston.  Registration for all sessions is now available here.  

NAFCU Members.  The May 2012 NAFCU Compliance Monitor is now available.  This month the articles look at the CFPB's movements in mortgage servicing as well as third-party service providers.  For those who missed the April 2012 BSA Blast, it is available here.    

Both the Compliance Monitor and the BSA Blast are NAFCU-member publications.  If your credit union is interested in NAFCU membership, check out our trial membership program.  Additional member benefits are discussed here.  

If you are a NAFCU-member and would like to be added to the Compliance Monitor and BSA Blast email notification lists, just send us an email - [email protected].  

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Vendor Risk Management Webinar.  The Philadelphia Federal Reserve is hosting a free Risk Management Webinar today at 2:00 Eastern.  The slides are already up and available here.  

FinCEN Webinar.  FinCEN will be hosting a free May 8th webinar discussing the technical specifications of the new SAR, CTR and DOEP forms.  Registration is here.   

Note:  This webinar promises to be very, very technical and geared toward IT folks.  Be sure to pass this along to anyone at your CU who fits the bill.  FinCEN will be conducting a future webinar for compliance professionals. 

CU Online Upgrade Webinar.  NCUA recently announced an upcoming upgrade to CU Online.  The upgrade is scheduled for May 28th and NCUA is hosting a free May 15th webinar discussing the upgrade.  Registration is here.  

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NAFCU Webcasts.  We also have a series of upcoming webcasts that might be of interest:

• May 9th:  Essential Financial Literacy Education (Sign up today and save $100)
• May 17th:  IRA Compliance: Managing a Successful IRA Program
• May 24th:  An Inside Look at NCUA's Interest Rate Risk Rule

Remember, all NAFCU webcasts are available for one-year after the purchase date and can be viewed numerous times.  The Financial Literacy webcast is a good example.  Not many credit union Boards meet at 2:00 p.m. on a Wednesday - but your credit union can use the webcast at a Board meeting or training session by accessing the "on-demand" version. 

All NAFCU webcasts are listed here (both upcoming live webcasts and on-demand webcasts).  

Member Complaints; NAFCU's 2012 Regulatory Compliance Seminar

Written by Steve Van Beek

Consumer and member complaints are at the forefront of quite a few conversations right now (including quite a few news articles).  The CFPB's promotion of their complaint process is one reason for this uptick in discussion as is the centralized complaint process for financial products.  

The CFPB issued their 2011 Annual Report on Consumer Complaints and it is full of useful information to review.  Here is a snapshot of the results:

"Between July 21 and December 31, 2011 the CFPB received 13,210 consumer complaints, including 9,307 credit card complaints and 2,326 mortgage complaints.

Forty-four percent of all complaints were submitted through the CFPB's website and 14.7 percent via telephone calls.  Referrals from other regulators accounted for 34.9 percent of all complaints received.  The rest were submitted by mail, email, and fax."

Future reports will include even more details - including complaints in new areas such as private student loans, auto loans and checking accounts.  Be sure to review the full report or pass it along to the appropriate person at your credit union.   

NCUA.  The March 2012 edition of the NCUA Report also included an article on Trends in Member Complaints and Consumer Inquiries.  Of note, the article indicates that of the complaints received in 2011 less than 1 percent involved a consumer compliance violation.  Of that 1 percent, half of those were related to timing issues related to the error resolution process under Regulation E.  

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NAFCU Regulatory Compliance Seminar.  October seems like a long way off but it will be here before you know it.  We are in the process of putting together the content and agenda - so please feel free to send in any comments, ideas or suggestions.  We love your input and this conference is really about you all so let us know what you need.

Here is what we are tentatively looking at so far (topics are subject to change, of course):

• TILA/RESPA Mortgage Disclosures
• Upcoming Mortgage Servicing Requirements
• The Latest on Overdraft Protection
• Remittance Transfers under Regulation E
• CUSOs
• Loan Participations
• Bank Secrecy Act Changes
• Social Media
• NCUA Update
• CFPB Update

I think that is a pretty good start - but let us know what you are looking for and how we can make NAFCU's 2012 Regulatory Compliance Seminar even better than the past.  

Recertification for NCCOs.  Remember, attending Regulatory Compliance Seminar is the best way to recertify your NAFCU Certified Compliance Officer (NCCO) designation.  Seminar offers 24 CEUs which is enough to fully recertify for two years.

Seattle, Washington.  Did I mention Seminar was in Seattle?  Right Downtown?  Well, now I have.  Hope to see you October 23-26, 2012!    

Free NAFCU Webcast with CFPB Director Cordray; BSA Blast

Written by Steve Van Beek

We'll keep this one short and sweet for Friday.

Free CFPB Webcast.  On April 24th, NAFCU will host CFPB Director Richard Cordray for a free webcast discussing Cordray's vision for the agency and its impact on credit unions.  

The webcast is free to all credit unions but registration is required.  If you've never seen a NAFCU webcast - this is great opportunity to get comfortable with the format.  And, the price is right!

The live webcast will be Tuesday, April 24th from 2:00 - 2:45 p.m. Eastern.  If you can't make the live webcast, you can always watch the on-demand version at a later date (or watch it again with your colleagues or your Board).  

BSA Blast.  The April 2012 issue of NAFCU's BSA Blast is available for download by NAFCU members.  With all the recent guidance and actions by FinCEN, this one is a must read.

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Have a great weekend!     

New SAR and CTR Reports Available for E-Filing – Part 2

Written by Bernadette Clair, Regulatory Compliance Counsel

Yesterday, we mentioned that the new Currency Transaction Report (CTR) and Suspicious Activity Report (SAR) contain expanded data fields for the collection of additional data elements.  When the new reports were proposed, there were quite a few questions as to whether the changes created new obligations for filing institutions.  FinCEN’s guidance addresses some of these concerns.

Regulatory Expectations.  It should be noted that FinCEN’s guidance states, more than once, that issuance of the new reports is not intended to create new obligations for filing institutions, or change existing requirements or expectations.  FinCEN also says it will continue to work “with supervisory regulatory authorities as part of its ongoing efforts to promote consistent examination of these filing requirements.”

So in theory these new reports should not create additional reporting obligations (besides figuring out how to fill them out).  Maybe that makes compliance folks feel a little better…and maybe not.

Expanded Data Fields.  Some of the changes to the reports include fairly straightforward data.  For example, optional fields for email address, website address, and IP address have been added.  Often this information is included in the narrative; having a specific field just makes it easier for law enforcement to search.

Here are some of the more interesting changes that caught my eye.

• Gender:  Gender has been added to the report because it can be an important characteristic for query purposes.  The field is not mandatory and credit unions are not expected to collect gender information – however, credit unions are expected to complete those fields for which they have relevant information.

• Characterization of Suspicious Activity:  FinCEN has added additional data elements for characterizing the suspicious activity and types of financial services involved.  Aside from critical fields (that must be completed) these additional fields are designed to efficiently bring information about suspicious activity to FinCEN’s and law enforcement’s attention.  The expanded choices do not require the credit union to determine whether any and/or all of the choices apply to the activity being reported. FinCEN reiterates that institutions are not responsible for investigating the underlying suspected crime, but for reporting the information they know at the time they conclude that suspicious activity is present.  Investigations remain the responsibility of law enforcement.

• Spreadsheet attachment:  How many times have we been told not to include attachments when filing SARs?  Well, the tune is changing just a bit.  Now, credit unions can include a single, comma separated value (CSV) attachment as part of the report. The purpose is to include tabular data which is more readable and usable in this format than it would be if otherwise included in the narrative. The attachment would be considered part of the narrative. 

See FinCEN’s guidance for further information on filing the new reports and the expanded data fields.

Well, I think that’s enough for one day.  Happy Friday!

New SAR and CTR Reports Available for E-Filing – Part 1

Written by Bernadette Clair, Regulatory Compliance Counsel

Last Thursday, FinCEN began accepting the new Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs) via the BSA E-Filing System.  These reports replace the forms credit unions currently use – FinCEN Form 104 (CTR) and TD F 90-22.47 (SAR), now referred to as the “legacy reports.”  The Designation of Exempt Person form has also been made available for e-filing.

FinCEN issued guidance to assist institutions filing the new reports and respond to industry questions about the new forms.  Updates to the CTR Electronic Filing Requirements and SAR Electronic Filing Requirements were also released.

Mandatory Deadline.  The deadline for using the new CTR and SAR reports is March 31, 2013.  Until that time, you can choose to file the new reports, the legacy reports or a combination of both.  Also be on the lookout for FinCEN webinars on the new reports, expected to be announced in the near future.

What’s different about the new reports?  First, the new reports can only be filed electronically via the BSA- E-Filing System.  Remember that e-filing, regardless of whether you file new reports or legacy reports, is mandatory for most BSA reports beginning on July 1, 2012.  We blogged about this requirement March 7^th.

Second, those of you who have already taken a look at the new reports have no doubt noticed that the new CTR and SAR have additional data elements.

FinCEN states in the guidance that “the new CTR and SAR forms do not create any new obligations or otherwise change existing statutory and regulatory expectations of financial institutions[.]”  Some of the concerns raised by industry about these expanded data fields are addressed in the guidance.  FinCEN has indicated that it may also develop additional guidance as necessary.

Tomorrow, we’ll take a closer look at some of these expanded data fields and the expectations set forth in FinCEN’s guidance.

FinCEN Advisory on Tax Refund Fraud and Related Identity Theft

Written by JiJi Bahhur, Regulatory Compliance Counsel

The IRS has developed a comprehensive strategy designed to address and focus on prevention, detection, and resolution of tax-related identity theft crimes.  In furtherance of this strategy, it is critical to identify tax refund fraud and the methods used to carry it out.  FinCEN has issued an Advisory to assist financial institutions with identifying tax refund fraud and reporting the activity through filing a Suspicious Activity Report (SAR). 

With the growing number of tax refunds being distributed as a direct deposit, financial institutions may see a significant increase in tax refund fraud.  FinCEN, in conjunction with the IRS and other law enforcement, has identified certain red flags to assist financial institutions with the identification of potential tax fraud. 

For a list of those red flags, see the Advisory. 

As required by 31 CFR § 1020.320, if a financial institution “knows, suspects, or has reason to suspect that” a transaction conducted or attempted by, at, or through the financial institution involves funds derived from illegal activity or an attempt to disguise funds derived from illegal activity, the financial institution should file a SAR.  The Advisory notes that when completing a SAR for suspected tax refund fraud, the term “tax refund fraud” should be used in the narrative to describe the activity. 

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Speaking of tax refunds, just a friendly reminder that the deadline is soon approaching for filing your taxes this year. 

Overdrafts: CFPB’s “Penalty Fee Box” Disclosure; Call for Comments; NAFCU's CFPB Page

Written by Bernadette Clair, Regulatory Compliance Counsel

We’ve previously blogged about the CFPB’s inquiry into overdraft services, but today I thought we’d take a closer look at the model disclosure form the CFPB is testing in conjunction with its inquiry – aptly named the “penalty fee box.”

This draft disclosure, designed to highlight the amount overdrawn and total overdraft fees charged, would require the following three disclosures at the top of each periodic statement: 

• A disclosure of the amount of overdraft fees paid during the billing cycle; 

• A disclosure of the amount the account was overdrawn; and 

• A disclosure that “You can lower these fees. See the three tips at the end of this statement to learn how.”

The end of the periodic statement would include an additional disclosure, spanning approximately half of one page. This disclosure provides additional details regarding the overdraft fees the member paid during the statement period and the calendar year and includes three tips for lowering overdraft fees: 

• Tracking balances and deposits carefully and signing up for text message alerts to warn when the balance is low; 

• Linking a savings account to your checking account; and 

• Consider opting out of overdraft coverage on debit or ATM transactions.

If you thought the last round of periodic statement changes to disclose overdraft fees was bad, the potential formatting requirements on this one could really drive you nuts!

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Make Your Voice Heard – Call for Comments

Speaking of the CFPB’s inquiry into overdrafts, there are a few comment deadlines coming up over the next several weeks.  NAFCU is seeking its members’ input on the following:

• CFPB’s Proposed Rule on the Confidential Treatment of Privileged Information, designed to assure financial institutions that, in providing the CFPB information in the course of a supervisory or regulatory process, they do not waive any privilege they may claim regarding that information. Comments are due to NAFCU April 4.  Comments are due to the CFPB on April 16.  (Regulatory Alert 12-EA-08) 

• CFPB’s Inquiry on Overdraft Protection Programs, seeking information on how overdraft programs are set up, how they are marketed and who uses them. The bureau is also testing the model “Penalty Fee Box” discussed above. Comments are due to NAFCU April 6.  Comments are due to the CFPB April 30.  (Regulatory Alert 12-EA-07)

• FinCEN’s Advance Notice of Proposed Rulemaking on Customer Due Diligence (CDD).  FinCEN is considering whether to expand its rules on CDD. It is looking, for example, at whether to require identity of the beneficial owners in all transactions and verifying that identity in risk-based fashion. Comments are due to NAFCU April 17.  Comments are due to FinCEN May 4. (Regulatory Alert 12-EA-09)

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NAFCU Members.  Our Regulatory Affairs team has updated NAFCU’s webpage on the CFPB.  This webpage is a great resource for keeping up-to-date on the CFPB’s activities and NAFCU’s efforts to mitigate new regulatory burdens for credit unions.  Here, you’ll find:

• Regulatory Alerts on CFPB proposed rules
• Comment letters
• Member Resources
• News
• Links to resources on the CFPB’s website

A Roundup of Recent BSA Blog Posts

Written by Steve Van Beek

The pace of issues has been pretty fast so far in 2012 so I thought it would be a good time to step back and highlight some of our recent blog posts on BSA to ensure they were all in one place for easy reference.

FinCEN Guidance:  CTR Aggregation for Businesses with Common Ownership

FinCEN Issues Advisory on SAR Confidentiality

Timely CTR E-Filing Specification Changing to 15 Days (March 31, 2013)

FinCEN Mandates E-Filing of Bank Secrecy Act Report (July 1, 2012)

FinCEN Releases ANPR on Customer Due Diligence - Part 1

FinCEN Releases ANPR on Customer Due Diligence - Part 2

FinCEN Extends Deadline for New CTR and SAR Forms (March 31, 2013)

Click on any (or all) of the blog posts above to get additional information to ensure you and your credit union are up to speed on the latest FinCEN actions.  

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FinCEN Guidance: CTR Aggregation for Businesses with Common Ownership

Written by Bernadette Clair, Regulatory Compliance Counsel

FinCEN’s been on a roll lately.  In the last few weeks, we’ve blogged about their ANPR on creating a customer due diligence rule, the upcoming requirement to e-file most BSA reports, and their advisory on SAR confidentiality.

FinCEN’s latest guidance, issued March 16, 2012, provides clarification on when currency transactions conducted by businesses with common ownership should be aggregated for CTR reporting purposes.

Generally speaking, a financial institution must aggregate multiple currency transactions if it knows that the transactions are by or on behalf of any person and result in either cash in or cash out totally more than $10,000 during any one business day.  But what if those multiple currency transactions occur on different business accounts at your credit union and those accounts share a common owner?

To aggregate or not to aggregate.  Whether you aggregate these transactions or not will depend on your determination of whether the accounts are operating independently of each other.

FinCEN indicates that separately incorporated entities are presumed to be independent persons, so currency transactions should not be automatically aggregated simply because multiple businesses are owned by the same person.  However, if the credit union has obtained information in the ordinary course of business that leads it to determine the businesses are not operated independently of each other, that’s a different story – and one in which currency transactions should be aggregated for CTR reporting purposes.

How do we make this determination?  There isn’t a bright-line test.  FinCEN indicates that a financial institution must use its knowledge of relevant facts and circumstances to make this determination.

The guidance does provide the following examples of activity that might lead you to determine accounts are not being operated independently.  Note:  This determination could include both business and personal accounts of the owner.

• The businesses are staffed by the same employees and are located at the same address;
• The bank accounts of one business are repeatedly used to pay the expenses of another business, or
• The business bank accounts are repeatedly used to pay the personal expenses of the owner.

To see how this might work in practice, the guidance provides the following scenario:

“For example, a bank knows that Company A and Company B have the same owner, operate out of the same address, and continually comingle funds between their separate accounts. Because of this information, the bank has determined that Company A and Company B are not independent of each other. One day, an employee of Company A deposits $6,000 into the account of Company A. That same business day, an employee of Company B deposits $5,000 into the account of Company B. Because the bank has determined that the businesses are not independent of each other, the bank should file a CTR listing Company A and Company B in separate sections identifying the person(s) on whose behalf the transaction is conducted and listing a cash-in deposit of $11,000. The remaining sections of the CTR should be filled out according to the form instructions.”

Bottom Line.  Your credit union’s determination in these situations may be the difference between whether you aggregate certain currency transactions for CTR reporting or not.  So if this type of situation comes up in your shop, it’s probably a good idea to document your determination of whether the accounts are, or are not, being operated independently for CTR reporting purposes. 

Updated 2012 NAFCU Credit Union Compliance GPS is Now Available!

Written by Steve Van Beek

Shameless Plug Alert!

We are very pleased to announce the availability of the Updated 2012 NAFCU Credit Union Compliance GPS.  Over the course of the last year, there have been many small tweaks and changes that have made life difficult for credit unions and, specifically, compliance officers (and many others as well).  These included technical changes to regulations as well as substantive changes to regulations and regulators.  

The Updated 2012 GPS has been thoroughly updated and edited to reflect these changes and provide those researching credit union issues a useful, electronic guide. 

For example, the Updated GPS includes:

• A New Section on the Consumer Financial Protection Bureau;
• Updated Links after NCUA's Website Change;
• Updated Regulatory Citations Reflecting the CFPB's Ownership of the Consumer Regulations;
• Links to the CFPB's Version of the Electronic Code of Federal Regulations;
• An Expanded Bank Secrecy Act Section;
• A Separate Section on Vendor Management; and
• Many more additional updates and edits to ensure accuracy.   

In non-bullet format, the Updated 2012 GPS contains all new links to the updated NCUA website (including Legal Opinion Letters and Letters to Credit Unions).  The GPS also contains the new, correct citation to the CFPB's regulations (i.e., 12 C.F.R. 1026 rather than 12 C.F.R. 226 for Regulation Z) as well as links to the CFPB's regulations to help you find the most up-to-date version of the consumer regulations.       

Pricing.  The Updated 2012 GPS is $399 for NAFCU members and $499 for anyone else.  The GPS is not limited to credit unions and can be purchased by anyone interested in learning more about credit union laws and regulations. 

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Table of Contents.  To get a feel for the Updated 2012 GPS, take a look at the following Tables of Contents which list the Sections that are included in each Chapter (plus the Appendix).

• Main Table of Content - 1-Page Snapshot of the 2012 GPS
• Chapter Specific Cover Pages - Listing of the Sections by Chapter
• Complete Table of Content - Listing the Contents of Each Section
• The Consumer Financial Protection Bureau Section Table of Contents 

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Below are a couple of additional items about the Updated GPS.  

Electronic Manual.  The GPS is designed to be a an electronic manual as it contains numerous links to regulations and guidance documents.  Of course, you can print off your own copy of the GPS and use the hardcopy as a quick resource guide.  But, the best bang for your buck is being able to use the electronic links and be taken directly to the NCUA Legal Opinion Letter being described or NCUA's Statutory Lien regulation in 12 C.F.R. 701.39.

Available to Everyone.  The GPS is available for purchase by anyone and everyone.  We've had law firms and audit firms purchase the GPS in the past in addition to numerous credit unions.  Additionally, your credit union does not need to be a NAFCU member to purchase.  We hope the GPS serves as a valuable resource for anyone seeking to learn more about credit unions and the regulations that impact their daily operations.

One GPS Per Credit Union.  Remember - the purchase of the GPS provides access to your entire credit union or organization!  Please feel free to share the GPS with your colleagues at your credit union.  However, we put a lot of time and effort into creating and editing the GPS and we ask that you not share your GPS with other credit unions or third-parties.  

Regulatory Compliance School.  If your credit union sent someone to NAFCU's 2012 Regulatory Compliance School last week, that person should already have an electronic copy of the Updated GPS.  Be sure to track that copy down and share throughout your credit union.  No additional purchase would be required.  

FinCEN Issues Advisory on SAR Confidentiality

Written by Bernadette Clair, Regulatory Compliance Counsel

FinCEN released an advisory on March 2, 2012, reminding financial institutions, and the lawyers that advise them, of the requirement to maintain SAR confidentiality.  Apparently, there has been an uptick in the number of private parties seeking SARs from financial institutions – private parties who shouldn’t know a SAR exists.

FinCEN’s advisory is a stern reminder that financial institutions, and their current and former directors, officers, employees, agents, and contractors, are prohibited from disclosing SARs, or any information that would reveal the existence of a SAR.  In addition, civil and criminal penalties can be imposed for the unauthorized disclosure of a SAR.  From the advisory:

“FinCEN reminds financial institutions to be vigilant in maintaining the confidentiality of SARs. This includes ensuring all employees, agents, and individuals appropriately entrusted with information in a SAR are informed of the individual obligation to maintain SAR confidentiality. This obligation applies not only to the SAR itself, but also to information that would reveal the existence (or non-existence) of the SAR. Likewise, such persons should be informed of the consequences for failing to maintain such confidentiality, which could include civil and criminal penalties as explained herein.

A financial institution may consider including such information as part of its ongoing training of all employees. Furthermore, financial institutions may want to remind their counsel of the strict requirements of SAR confidentiality. Additional risk-based measures to enhance the confidentiality of SARs could include, among other appropriate security measures, limiting access on a "need-to-know" basis, restricting areas for reviewing SARs, logging of access to SARs, using cover sheets for SARs or information that reveals the existence of a SAR, or providing electronic notices that highlight confidentiality concerns before a person may access or disseminate the information.”

My takeaway:  It might be a good idea to review the internal controls you have in place to protect SAR confidentiality – you don’t want to be the weak link.

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Tomorrow I’ll be speaking at compliance school on BSA/OFAC compliance.  For those of you taking the NCCO certification exams…study hard, the end is in sight!

With NAFCU staff at school this week, keep in mind that response times to compliance questions may be a little longer than usual.

Timely CTR E-Filing Specification Changing to 15 Days

Written by Bernadette Clair, Regulatory Compliance Counsel

Even if you already e-file, don’t let this one slip past you.  Under current BSA e-filing specifications, CTRs filed electronically within 25 calendar days are considered timely.  This is from FinCEN’s E-Filing FAQs: 

“Must CTRs (Currency Transaction Reports) be filed within 15 days after the transaction date (as with paper filings) or within 25 days (as for batch filings)?

In accordance with BSA E-Filing electronic filing requirements, CTRs will be considered on time if received by FinCEN no more than 25 calendar days after the date of the transaction.”  (emphasis in original)

Well, no more!  FinCEN’s final rule states that “FinCEN has consistently maintained a regulatory requirement that CTRs be filed within 15 days.”  FinCEN indicates that the 25 calendar day specification originally started to accommodate institutions that filed magnetic media files on a fixed schedule, and that the practice carried over to e-filing.

When does this change take place?  The FinCEN 25-day compliance period will temporarily remain in the e-filing specifications until March 31, 2013.  After that, the specifications return to the regulatory requirement of 15 days.

To avoid any unpleasant surprises come March 31, 2013, this might be a good time to review internal procedures and systems for any necessary adjustments to ensure timely CTR filings.

FinCEN Mandates E-Filing of Bank Secrecy Act Reports

Written by Bernadette Clair, Regulatory Compliance Counsel

FinCEN has issued a final rule requiring the electronic filing of most Bank Secrecy Act (BSA) reports, including Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs).  In its press release, FinCEN indicates this will “improve efficiency, reduce government and industry costs, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information.” We previously blogged about FinCEN’s push towards mandatory e-filing on September 19^th and December 27^th.

Effective Date.  The rule mandates electronic filing effective July 1, 2012.

Are there any exemptions?  FinCEN will grant a very limited number of temporary exemptions to institutions that follow the certain procedures and that demonstrate a substantial hardship in meeting the July 1, 2012, requirement.   Small credit unions lacking internet connectivity or large institutions undergoing major system conversions to enable batch and computer-to-computer CTR filing may want to check these out.

Deadline for exemption requests.  Requests must be submitted directly to FinCEN by March 26, 2012, using the procedures outlined in this notice.  In the notice, FinCEN includes a template that institutions may use.

Where do I start if I don’t e-file yet?  FinCEN maintains a website dedicated to BSA e-filing.  Here, you can take a tour of the BSA e-filing system, read FAQs, and sign up for e-filing.  Getting Started with BSA E-Filing takes you step-by-step through the e-filing enrollment process and is a great place to start when you’re ready to sign up.

FinCEN Releases ANPR on Customer Due Diligence - Part 2; Member Call-In

Written by JiJi Bahhur, Regulatory Compliance Counsel

Yesterday, we discussed the release of FinCEN’s ANPR on customer due diligence (CDD).  The post gave you a taste of the elements that FinCEN seeks to incorporate into a codified CDD rule.  Today, I’d like to expand briefly on the third element – obtaining beneficial ownership information – since this is the only element FinCEN feels will impose new or additional requirements that financial institutions are not already obligated to enforce.  

Under existing FinCEN regulations, there are only two explicit situations that require financial institutions to obtain beneficial ownership information.  Further, there is guidance out there stating that there are other situations where obtaining such information is appropriate.  The ANPR considers, among other related items, expanding the requirement to obtain beneficial ownership information to all customers.  This element would also require verification of the beneficial owners’ identity pursuant to a risk-based approach.  FinCEN also anticipates that it will provide guidance on what a financial institution should do if it is unable to identify or verify a beneficial owner.  

Since this component of the CDD program rule would create a new express regulatory obligation on financial institutions, there are other related items that would need to be addressed under this element as well.  These items include the following:

• Potential Additional Definition of Beneficial Owner;
• Potential Exemptions from Beneficial Ownership Requirement;
• Beneficial Owners of Assets in Accounts Held by Intermediaries;
• Customer Acting as an Agent; and
• Obtaining and Verifying Beneficial Ownership Information.

Remember, NAFCU’s Regulatory Affairs team is working on a Regulatory Alert and will be seeking comments from NAFCU members.  In the meantime, you can access the ANPR here and here.

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NAFCU Member Call-In.  On Thursday, March 8th, NAFCU will be holding its first Member Call-In of 2012.  The call is free but registration is required.  This is a great way for NAFCU members to get an overview of a wide variety of issues.  Topics covered include legislative, regulatory, economic, compliance as well as global credit union issues.  For more information and to register, go here.  

FinCEN Releases ANPR on Customer Due Diligence - Part 1

Written by JiJi Bahhur, Regulatory Compliance Counsel

The Financial Crimes Enforcement Network (FinCEN) issued an advance notice of proposed rulemaking (ANPR) last week with the objective of creating an express customer due diligence (CDD) rule so that there will be consistency and uniformity amongst financial institutions.  

Currently, financial institutions are required to have a BSA/AML compliance program, which includes comprehensive CDD policies, procedures, and processes for all customers.  But despite these obligations, FinCEN believes that issuing an express CDD rule, which will include an obligation to categorically obtain beneficial ownership information, may be necessary to protect the United States financial system from criminal abuse and to guard against terrorist financing, money laundering, and other financial crimes.  FinCEN believes that an effective CDD program includes the following elements:

1. Conducting initial due diligence on customers, which includes identification and verification of customer at the time of account opening;
2. Understanding the purpose and nature of the account, and the expected activity associated with the account;
3. Identifying the beneficial owner(s) of all customers, and verifying the beneficial owner(s)’ identity; and
4. Conducting ongoing monitoring of the customer relationship and conducting additional CDD as appropriate.

The ANPR discusses each one of these elements in detail.  It’d definitely be a good idea to read the ANPR in its entirety because there are several items within each element that FinCEN is seeking comment on, especially the third element.  

The ANPR is 37 pages long, but it’s an easy read and provides a good summary of what is currently expected versus what will be required if the rule is codified.  You can access the ANPR here: Press Release & ANPR.

NAFCU Members:  Please note that NAFCU’s Regulatory Affairs team will be publishing a Regulatory Alert and soliciting comments from NAFCU members.  

FinCEN Extends Deadline for New CTR and SAR Forms

Written by Bernadette Clair, Regulatory Compliance Counsel

In the spirit of holiday giving, here’s one more present for you…FinCEN has extended its originally proposed deadline for using the new CTR and SAR from June 30, 2012 to March 31, 2013.  The extension is intended to give institutions more time to make the transition to the new reports, and make any necessary internal processing or system changes.

But wait…we’re not out of the woods just yet.  Remember that proposal FinCEN issued to mandate electronic CTR and SAR filing?  That’s still on the table and the proposed deadline remains June 30, 2012.  We blogged about this proposal on September 19th.

Although there will be a short reprieve from mandatory use of the new reports, don’t expect the same for e-filing. Here’s what FinCEN had to say about e-filing in this latest announcement:

“FinCEN expects that the clear benefits associated with the transition to a fully electronic reporting system will support mandating electronic filings of BSA reports as of the proposed date of June 30, 2012. FinCEN will continue to consider the comments received on its proposal, and will follow the normal procedures for concluding the notice process. As reflected in the notice, for those financial institutions unable to meet the proposed electronic filing deadline, FinCEN will consider, based upon certain limited hardship exceptions, specific requests to file the most current paper forms for up to one year past the mandatory electronic filing deadline. Further information on how financial institutions can make such requests will be provided in a future notice.”

Thus, if you’re not yet e-filing your CTRs and SARs, now is the time to start thinking about it.  Also, keep an eye out for more information on the new forms, which FinCEN says it will be making available soon.

More on Advertising; BSA Advisory Group

Written by Steve Van Beek

Yesterday's blog post mentioned the difference between the requirements for the "official sign" and the requirements for the "official advertising statement."  

Thanks to a helpful commenter, we were informed of our inaccurate discussion of when the "official sign" is required.  It is required at teller windows and:

"Each insured credit union must also display the official sign on its Internet page, if any, where it accepts deposits or open accounts, but it may vary the font sizes from that depicted in paragraph (b) of this section to ensure its legibility."  

Yesterday's post (which has been updated) indicated the official sign was required on the CU's main Internet page.  However, 12 CFR 740.5(a) indicates that credit unions need to use the official advertising statement on their main Internet page:

"§ 740.5   Requirements for the official advertising statement.

(a) Each insured credit union must include the official advertising statement, prescribed in paragraph (b) of this section, in all of its advertisements including, but not limited to, annual reports and statements of condition required to be published by law, and on its main Internet page, except as provided in paragraph (c) of this section. For annual reports and statements of condition required to be published by law, an insured credit union must place the official advertising statement in a prominent position on the cover page of such documents or on the first page a reader sees if there is no cover page."

Thus, for pages where the credit union accepts deposits or opens accounts the official sign would be required.  However, if the credit union does not accept deposits or open accounts on its main Internet page - the credit union could use any of the three versions of the official advertising statement discussed yesterday.

That being said, I think it makes a lot of sense to include the official sign on your main Internet page.

• The official sign (NCUA logo) is one that members are accustomed to seeing on credit union main pages.
• Non-members searching your website would be informed of your insured status upfront via the official sign - which catches the eye more than "Federally insured by NCUA."
• The use or non-use of the official sign is an easy item for examiners or auditors to catch.  Even if the official sign is not a requirement on your main Internet page, the credit union might need to defend its decision to use the official advertising statement rather than the official sign. 

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The Financial Crimes Enforcement Network (FinCEN) requested nominations to fill 14 seats on its Bank Secrecy Act Advisory Group (BSAAG).  One seat is designated for a representative of a credit union trade group.  NAFCU is seeking individuals who are interested in serving on the BSAAG and wish to be nominated.  The term runs for three years. 

The group is tasked with providing policy recommendations to the Treasury regarding the BSA.  The BSAAG is comprised of representatives from federal regulatory and law enforcement agencies, financial institutions and trade groups, whose members are subject to the BSA. 

The nomination notice can be found here.

If you are interested in being nominated, please contact Dillon Shea, NAFCU’s regulatory affairs counsel at [email protected] or at 703-842-2212.

FinCEN’s Proposed AML/SAR Reporting Rule for GSEs and FAQs on Prepaid Access; Upcoming NAFCU Compliance Webcast

Written by Shari R. Pogach, Regulatory Paralegal

In an ongoing effort to combat mortgage fraud, the Financial Crimes Enforcement Network (FinCEN) has issued proposed regulations to require government-sponsored (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Banks to develop anti-money laundering (AML) programs and to file suspicious activity reports (SARs) with the agency.  Currently the GSEs file fraud reports with the Federal Housing Finance Agency (FHFA) which then files SARs with FinCEN when appropriate.

In order to streamline the process, the proposed regulations would require that the GSEs file SARs directly with FinCEN.  Responsibility for examining the GSEs for compliance for the regulations would then be delegated by FinCEN to the FHFA.  One benefit of the proposal is that the GSEs, including their directors, officers, and employees, will fall under the Bank Secrecy Act’s (BSA) “safe harbor” provisions of liability from frivolous lawsuits by SAR subjects.

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FinCEN’s Prepaid Access final rule, issued July 29, 2011, generated a lot of questions so the agency has released some guidance FAQs to financial institutions.   The guidance is meant to assist providers and sellers of prepaid access in understanding the scope of the final rule that imposes certain recordkeeping and reporting requirements under the Bank Secrecy Act (BSA).

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I feel sure that you'll want to join Steve and Sarah as they discuss hot credit union compliance topics and forecast what’s ahead on the regulatory compliance front during NAFCU’s upcoming November 16 webcast.  For thoese of you who attended Seminar, this is a shortened version of the hot topics session presented in Orlando. Items on the agenda include:

• The Consumer Financial Protection Bureau (CFPB) and its latest actions;
• Regulatory future of credit unions;
• The impact and consequences of the Durbin amendment;
• NCUA’s Inspector General report on examinations; and
• Business lending and section 1071 of Dodd-Frank.

The early registration savings of $100 ends on November 9.  The webcast is open to all credit unions, simply call 1-800-344-5580 or register online here.

 

November Newsletter; Savings Bonds Q&A; BSA Webcast

Posted by Sarah Zimmermann

I don't know about you guys but I walked into work yesterday morning completely oblivious to the fact that I was going to have a frustrating morning bumbling my way though NCUA's new website. I'm sure I'll get used to it but I did grumble a bit yesterday morning, I'm not going to lie.

***

NAFCU members, the November Compliance Newsletter is available. Last week at Seminar, many of you reminded us how much you love Q&As, so we figured we'd give you all a freebie this morning from this month's newsletter.

Question: I’ve read NCUA Letter to Credit Unions 11-CU-15 on changes to sales of Savings Bonds. The letter states “Please continue redeeming these paper bonds on behalf of your members.” We were always under the impression that, as a paying agent, we were required to redeem bonds for both members and nonmembers. Has this requirement been changed? Do we need to continue redeeming bonds for nonmembers?

Answer: Yes, if the credit union continues to be a paying agent – it must redeem savings bonds for both members and nonmembers. This requirement comes from 31 C.F.R. 321.10:

Ҥ 321.10 Responsibilities of paying agents.
(a) Payment of securities. A paying agent is required to redeem eligible securities during its regular business hours for any presenter, whether or not a customer, who can establish his or her identity as the owner or co-owner named on the securities, in accordance with the provisions of this part, and the appendix to this part, and the Treasury Identification Guide for Cashing United States Savings Bonds. An agent is encouraged, but is not required, to redeem eligible securities during its regular business hours for a surviving beneficiary, a legal representative designated in the registration of securities presented, or a legal representative of the last deceased registrant's estate who can provide acceptable evidence (See §321.7 (d) or (f)) and establish identity in accordance with this part.”

NCUA discussed the ability of credit unions to cash Savings Bonds for nonmembers in Legal Opinion Letter 01-0226. While Letter 01-0226 answers another question, NCUA includes this language regarding cashing Savings Bonds for nonmembers:

“In order for an FCU to be a U.S. savings bond paying agent and provide this service to its members, an FCU must also provide the service to nonmembers. An FCU is permitted to cash U.S. savings bonds for nonmembers because it is incidental to the FCU providing a service to its members.”

Thus, the upcoming change by the U.S. Treasury to require purchases of Savings Bonds directly from www.treasurydirect.gov will not change a credit union’s requirement to redeem Savings Bonds for nonmembers if it continues to act as a paying agent.

 

Editor's Note: Normally, we like to provide links to the documents we are discussing. Alas, the fancy new website was not cooperating with us at publication time. We will fix this when we get a chance.

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NAFCU is hosting a BSA Webinar today from 2-3:30 pm EDT, featuring Jeffrey Pratt, Deputy Assistant Director at FinCEN. Below is a summary of what will be covered.

    * BSA issues unique to credit unions;
    * New developments related to BSA compliance issues;
    * Problems that FinCEN is seeing within financial institutions; and
    * Updates on BSA to include E-Filing

If you'd like to register for this webcast, folllow the link above for all the details.

MBL Hearing; Cordray; BSA Blast

Written by Steve Van Beek

This afternoon the House Financial Institutions Subcommittee will hear testimony on H.R. 1418 - the Small Business Lending Enhancement Act.  In September, we blogged on the details of H.R. 1418.  The increase in each credit union's Member Business Lending cap would not be automatic if this legislation passed and was signed by President Obama.

Gary Grinnell, CEO of Corning CU, will testify on behalf of NAFCU.  NAFCU Today has additional details on today's hearing.  

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The Senate Banking Committee voted last Thursday on Richard Cordray's nomination to be Director of the Consumer Financial Protection Bureau.  The Committee voted along party lines (12 Democrats for, 10 Republicans against).  It is unclear when and if the full Senate will take up Cordray's nomination.

Without changes to the CFPB's structure, it may continue to be a waiting game for a CFPB Director.  

Even without a Senate-confirmed Director, the CFPB can amend existing regulations impacting credit unions (such as Truth in Savings).  For a more detailed discussion of the CFPB's powers without a Director, check out this June 2011 blog post.     

***

NAFCU Members.  The October issue of the BSA Blast is now available.

BSA Reg Alert; Current Issues in Credit Unions; Playoffs

Written by Steve Van Beek

FinCEN recently issued a proposed rule to mandate e-Filing for CTRs and SARs.  NAFCU's Regulatory Affairs team has issued a Regulatory Alert on the proposal.

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The latest issue of Current Issues in Credit Unions is now available.

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It's been a while since I plugged my home state of Michigan - so I thought I'd share a photo of the last time the Detroit Tigers were in the playoffs (2006 - which included a ALDS victory over the Yankees).

Go Tigers! 

It is the magical time of year when baseball playoffs, college football and the NFL are all heating up.  Add in a bunch of last minute wedding planning and it makes for a fun weekend.  Have a great weekend!  

Comments on CUSO Proposal; BSA and Risk Managment Webcast for Directors

Written by Steve Van Beek

NAFCU has submitted our comment letter on NCUA's proposed rule on CUSOs.  You can view the comment letter here.  

Additional information is in the NAFCU Today. 

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Next Wednesday - October 5 - will feature a return performance by Anthony Demangone as he will be presenting a BSA and Risk Management webcast for Directors and Executives.

Any credit union (or other third-party) can sign up and you can save $100 by signing up through Wednesday, September 28.

Here is what will be discussed:

"Make sure your board and supervisory committee get their annual BSA training before the end of 2011!

Managing BSA compliance as a credit union board is just another form of risk management. All too often, BSA training programs focus on the technical aspects of compliance, without properly discussing risk management. This webcast, based on a heavily attended session at NAFCU’s 2011 Annual Conference, weaves risk management and BSA compliance together. Board members and supervisory committee members who watch this webcast will gain a foundational understanding of risk management, which will help them better understand their role in managing the credit union’s BSA program. Those who purchase the webcast will have the option to purchase a CD of the live broadcast to use for board and supervisory committee training sessions. Viewing the webcast can help credit unions comply with NCUA training requirements regarding the Bank Secrecy Act.

Demangone’s presentation will first address risk management:

• What are NCUA expectations regarding risk management?
• What are the seven major types of risk that NCUA examiners focus upon?
• How do credit union officials manage risk?

Regarding the Bank Secrecy Act, Demangone will cover the following:

• What is money laundering, and why do criminals attempt it?
• Important concepts of the Bank Secrecy Act regulatory system.
• What are the goals of the BSA regulatory system? (Once you know what regulators are after, other things start to make sense.)
• What about the Office of Foreign Assets Control (OFAC)?
• What are the credit union’s responsibilities for managing BSA risks?
• What is a board’s ultimate responsibility?"

 The $100 off savings ends tomorrow - so take a look today to help meet your credit union training requirements.