CSBS Emerging Issues Forum

1
CSBS Emerging Issues Forum

• Debra Novak
• Chief, Anti-Money Laundering Section
• FDIC

2
FFIEC BSA/AML Manual
3
2007 Version of the Manual

• Changes include new guidance issued since the
  release of the 2006 version, examiner and
  industry suggestions
• Minor changes compared to 2006
• Updates to the following sections OFAC, ACH,
  Foreign Correspondent Banking, Electronic
  Banking, Funds Transfers, Trade Finance, Non-bank
  Financial Institutions (added MSB guidance), Red
  Flags Appendix
• Added an Index

4
Office of Foreign Assets Control

• Includes discussion on batched transactions and
  when it is a
• banks responsibility to screen these
  transactions
• Unbatching on us transactions (bank responsible
  to screen)
• Cross border transactions
• Inbound responsibilities
• Outbound responsibilities

5
Automated Clearing House Transactions

• Includes a discussion on OFAC Screening

6
Foreign Correspondent Banking

• Added information to Risk Mitigation Section
• Includes reference to New York Clearinghouse and
  Wolfsberg Group paper on industry standards and
  guidance for banks that provide foreign
  correspondent banking services
• Additional information on account opening
  procedures

7
Electronic Banking

• Added Remote Deposit Capture
• Relatively new technology
• Identified risk mitigants
• Establish parameters for customer base eligible
  to use this method to transact business
• Establish account activity
• Discuss disposal of original documents
• Securing of equipment

8
Non-Bank Financial Institutions

• Added information from April 2005 guidance to
  Overview Section

9
Trends in FDIC Supervised Institutions

• FDIC conducts approximately 2,450 BSA
  examinations per year
• Also review about 1,300 State Reports of
  Examination per year
• Conduct approximately 250 visitations per year

10
BSA Trends

• Most banks have a risk assessment
• Turnover in the BSA Officer position continues to
  be a problem due to shortage of qualified
  individuals
• A component of the CIP is cited for violation 30
  of the time each quarter
• CTR Reporting and filing requirements are cited
  for violation 30 of the time each quarter

11
BSA Trends

• Suspicious Activity Reports completion or failure
  to file, etc. is cited for violation 36 of the
  time each quarter
• Internal Routines and Controls and Independent
  Testing are consistently the parts of a BSA/AML
  Compliance program which are cited the most (10
  each quarter)

12
GAO CTR Audit

• Conducted interviews of the Federal Banking
  Agencies, Law Enforcement and FinCEN
• Requested CTR data from FinCEN
• Intend to survey banks
• If contacted, please participate
• Study results due to Congress January 10, 2008