(Jan. 22, 2021) Suspicious activity reporting and other anti-money laundering (AML) requirements are subjects of new frequently asked questions (FAQs) issued by NCUA, federal banking regulators and the Treasury’s Financial Crimes Enforcement Network (FinCEN) this week.
The questions were developed, the agencies said, in response to recent Bank Secrecy Act Advisory Group (BSAAG) recommendations, as described in last September’s Advance Notice of Proposed Rulemaking on Anti-Money Laundering Program Effectiveness, published by FinCEN.
According to the agencies, the FAQs clarify the regulatory requirements related to suspicious activity reporting to assist credit unions and other financial institutions with their compliance obligations. The FAQs also enable financial institutions to focus resources on activities that produce the greatest value to law enforcement agencies and other government users of Bank Secrecy Act (BSA) reporting, the agencies said.
The FAQs also address questions about maintaining accounts at the request of law enforcement, suspicious activity report (SAR) filing and the receipt of grand jury subpoenas or other law enforcement inquiries, maintaining customer relationships following the filing of an SAR, SAR filing and monitoring on negative media alerts, data fields, the SAR narrative, and SAR character limits.
The agencies said the FAQs do not alter existing BSA/AML legal or regulatory requirements and they do not establish new supervisory expectations.
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NCUA, Federal Banking Agencies, FinCEN Issue FAQs on SAR and Other AML Requirements
(Nov. 20, 2020) The state system made several recommendations for improving anti-money laundering (AML) effectiveness in a comment letter to federal law enforcement, responding to a call for comments issued in September.
That month, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an advance notice of proposed rulemaking (ANPR) seeking views on how to establish an “effective and reasonably designed” anti-money laundering program by amending its rules. FinCEN stated then that the amendments under consideration “are intended to modernize the regulatory regime to address the evolving threats of illicit finance, and provide financial institutions with greater flexibility in the allocation of resources, resulting in the enhanced effectiveness and efficiency of anti-money laundering programs.”
Specifically, FinCEN said its proposed amendments would clarify that an “effective and reasonably designed” AML program would assess and manage risk according to the institution’s own risk assessment process; provide for compliance with BSA requirements; and provide for the reporting of information with a high degree of usefulness to government authorities.
In its comment letter filed this week, NASCUS told the agency that the state system:
- Supports efforts to better harmonize expectations among regulators and credit unions as to the sufficiency of AML efforts and a credit union’s overall AML program.
- Recommends an explicit requirement for a risk assessment be limited to conducting one upon which the AML program is based and documenting the risk assessment. “FinCEN should allow institutions to determine the needed frequency of updating the risk assessment as well as the methodology and format of the risk assessment,” NASCUS wrote.
- Encourages FinCEN to publish its AML priorities, but cautioned against requiring those priorities to be incorporated into the risk assessment.
- Understands from stakeholders that the currency transaction report (CTR) exemption process is too burdensome, and said NASCUS encourages FinCEN to explore ways to ease the process for credit unions to exempt qualifying credit union members from CTR filing obligations.
- Recommends that on-going suspicious activity report (SAR) filing requirements be extended from 90-days to a 180-day or even annual filing requirement. “Covered entities would still be required to monitor the accounts and include a transaction history in the extended refiling,” NASCUS wrote. In addition, the association stated, should the nature of the transactions change, or new information become available, an SAR could be filed ahead of the 180-day (or annual) re-filing deadline.
LINK:
NASCUS comment letter: ANPR, Anti-Money Laundering Program effectiveness
(Nov. 6, 2020) Continuing its streak of accreditation, the NASCUS-CUNA BSA/AML Certification eSchool – now underway through Dec. 7 – has again been certified for continuing education units (CEUs) by the Association of Certified Anti-Money Laundering Specialists (ACAMS), the premier body for educating and accrediting anti-money laundering specialists around the world. The certification means that participants at the NASCUS-CUNA eSchool will earn one CEU (as a CAMS credit) for each session they attend in conjunction with the school. Those sessions include: BSA in the Virtual World; Don’t Build a House on Sand: Risk Assessment; De-Risking: No Joking Matter/Fine Tuning Your CDD; BSA Leadership; A View from the Regulator; Future of BSA: SBA, Lending, and Other Updates BSA; Roundtable Q & A. Credits are only eligible for those individuals who participate during the live delivery of the program. See the link for more information on the eSchool … Comments are due Jan. 4 on an interagency proposal (including by NCUA, CFPB and the federal banking agencies) on the role of supervisory guidance in regulation. See the CFPB Rules and Summaries page on the NASCUS website for more information.