There is what appears to be a trend happening in the foreign branch banking market that seems all too consistent. That trend is the influx of MRAs, MOUs, and Consent Orders being handed down by the federal regulators for having insufficient BSA/AML and OFAC compliance programs.

On October 5, 2016, the Office of Comptroller of Currency (“OCC”) issued guidance relative to foreign financial institutions de-risking policies with respect to maintaining foreign correspondent banking relationships.

As the saying goes, the chickens have finally come to roost. FinCEN and the banking authorities have issued a final ruling on beneficial ownership with respect to Customer Due Diligence, now requiring financial institutions to identify beneficial owners of covered businesses as part of the account opening process.

We’ve all come to the realization that the legalization of marijuana in the U.S. is something that is becoming more and more prevalent. As state legislatures and lawmakers have since softened their policies on marijuana usage (medicinal or recreational) and begun to see the monetary benefits of legalizing such at the state level, there still presents a heightened risk of money laundering in the banking industry.

Ongoing BSA/AML training is one of the main pillars of a safe and sound BSA/AML compliance program. Knowledgeable staff, especially in areas with heightened exposure to money laundering (i.e., Tellers, CSRs, Branch Managers) can have a significantly positive impact on the Bank’s BSA/AML compliance program.

With the ever increasing regulatory scrutiny facing the banking industry, community banks, small and large, have looked upon technology as a resolution to its problems. In the past, many banks were able to manage money laundering risks...

On December 2, 2014, the Federal Financial Institutions Examination Council (“FFIEC”) released the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual. The 2014 BSA/AML examination manual incorporates several regulatory changes and provides further clarity on regulatory expectations since the last examination manual was released in 2010.

So what are some of the new changes?

There are several areas within the new examination manual that have incorporated current regulatory requirements....

In the past, banks were burdened with having to monitor updates to the SDN (Specially Designated Nationals) as well as the non-SDN sanctioned listings. Many have asked “Why are there so many different listings? Why not have a consolidated set of listings in a single file?” The Office of Foreign Assets Control has now made it easier for banks to comply with sanction screening requirements by distributing a consolidated listing...

The Association of Certified Anti-Money Laundering Specialists recently published a White Paper summarizing an industry survey study of current practices regarding Customer EDD and AML Risk Assessment. The compelling analysis included survey of approximately 500 respondents regarding industry standards for Customer EDD and Bank wide BSA/AML Risk Assessment practices.

On April 4, 2011, the Office of the Comptroller of the Currency published supervisory guidance on Model Risk Management. The purpose was to provide comprehensive guidance for banks on effective model risk management. The use of models invariably presents model risk, which is the potential for adverse consequences from decisions based on incorrect or misused model outputs and reports. The essence of this guidance is that “garbage in results in garbage out”.

On February 5, 2013, the Office of Foreign Assets Control introduced the first SDN list search tools which employ a “fuzzy” logic search option. For those of you that don’t know, “fuzzy” logic is a search option that deals with reasoning that is approximate rather than fixed or exact. The OFAC SDN Fuzzy logic search tool uses “character and string matching as well as phonetic matching.

Beginning on April 1, 2013, the new FinCEN CTR forms will be mandated. Older versions of the reports will not be accepted into the E-filing system after March 31, 2013. In addition, the new filing requirement will eliminate the 25 days allowed for electronic filing. New filings must be submitted within 15 days of the date of the transaction.

The United States Senate Permanent Subcommittee on Investigations (“PSI”) attributed HSBC’s ineffective and/or inadequate anti-money laundering policies and procedures to lax regulatory oversight. HSBC was cited by the OCC in 2010 for multiple AML deficiencies, including...

The Financial Crimes Enforcement Network published guidance in the May 2012 “The SAR Activity Review: Trends, Tips, & Issues, Issue 21”, which clarifies regulatory obligations for financial institutions regarding continuing activity SAR filings.

According to a notice issued by the Financial Crimes Enforcement Network dated February 24, 2012, financial institutions subject to Bank Secrecy Act reporting will be required to use electronic filing (E-Filing) for certain FinCEN reports beginning no later than July 1, 2012.