Regulatory Compliance
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The 5 Necessary Components of Your BSA Program

While preparing for a compliance presentation recently, I noticed my Power Point graphic looked oddly similar to the Olympic rings – convenient timing since the Olympics start this week (U.S.A. for the win!). Of course, I then had to Google what the Olympic rings symbolized. In case you’re curious, the circles represent the union of the five continents and the meeting of athletes from throughout the world at the Olympic Games.

The five circles in my graphic represent the required components of a credit union’s anti-money laundering (AML) program, effective May 11, 2018:

At a minimum, your AML program should include:

  1. A system of internal controls to ensure ongoing compliance – This includes your BSA risk assessment, CTRs, SARs, CIP, and OFAC, to name a few.
  2. Independent testing for compliance – As a best practice, this should be done annually. The key word here is someone that is independent of your BSA department (can be internal or external).
  3. Designation of individual(s) responsible for day-to-day compliance – The Board should designate a BSA Officer, who has the authority to delegate duties as needed.
  4. Training for appropriate personnel – All staff is required to have annual, ongoing BSA training (including the supervisory committee & Board). Training should be tailored to each employee’s specific responsibilities.
  5. Appropriate risk-based procedures for conducting ongoing customer due diligence – While this is technically a “new” regulatory requirement, hopefully it is not new to your credit union. The intent of these procedures is to understand the nature and purpose of your member relationships, in order to determine their risk profile. At account opening, information should be gathered to develop a baseline against which member activity may be assessed for suspicious activity reporting. Keep in mind that there are new requirements for legal entity members as of May 11 as well, and that the account monitoring should be ongoing.

If you are a “visual” learner like me, hopefully this will help you remember the five necessary components of your BSA program – just make sure to have the fifth one in place by May 11.

Now I’m off to go set my DVR for some figure skating and snowboarding. Happy binge-watching!

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