Regulatory Compliance
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Internal Reports

What tools do your employees have to report suspicious activity? When I am out and about conducting BSA independent tests for credit unions, I often look to see if they have a confidential method for employees to report suspicious activity. SARs can be intimidating, not to mention the penalties that come along with disclosing one has been filed. One of the most common reasons employees don’t report suspicious activity is because they attempt to make their own determination whether or not an actual SAR should be filed. When in reality, the SAR filing decision should left to the BSA Officer, or a SAR filing committee.

So, how do you provide your employees with a confidential, safe way of disclosing any type of suspicious activity? Well… you can provide them with an internal report of suspicious activity form that they can complete.

Providing such a form has many benefits:

  1. Employees feel more comfortable completing the form, which intern promotes increased reporting.
  2. Training employees to complete the form is less difficult then training them to complete a SAR form.
  3. It reduces the credit union’s risk with respect to unauthorized disclosure, as employees never actually know if a SAR was filed.
  4. It provides BSA Officers with a tool to document their SAR escalation process.
  5. It may help promote reporting of insider abuse.

There are many more benefits to implementing such a report. I recommend that credit unions have a form readily available to their employees and that the completed forms be provided directly to the BSA Officer for investigation. The forms should also be held to the same confidentiality standards as the SAR form. Finally, it is equally important for the credit union’s BSA training program to ensure employees are aware of its purpose.

Providing your employees with a simple and secure way of reporting will significantly strengthen your credit union’s BSA program as a whole.  Not to mention, the retention of these records will help show auditors and examiners that you mean business when it comes to BSA.

Best wishes for 2014!

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