BSA/AML Compliance

Bank Secrecy and Anti-Money Laundering compliance is complex. It represents a great financial and reputational risk to a financial institution and it’s directors.

The first step in an effective BSA/AML program is to understand the various risks. BSA is a hydra-headed regulation that has its tentacles in lots of places inside the institution. BSA impacts operations plus credits and debits. Compliance with BSA/AML often cuts across departments and areas of responsibilities.

BSA/AML is the principal means a bank complies with the USA Patriot Act. Financial institutions are a vital piece of the nation’s fight against terrorism and money laundering. It is no wonder that regulators are in no mood to joke about BSA/AML compliance…and it’s the reason that sometimes examiners exhibit great sensitivity to management’s attitude.

In May, 2018, expanded BSA/AML regulations were introduced, adding a 5th component to the BSA compliance program.  Minimum compliance requirements are now:

A financial institution’s AML program must now address, at a minimum, these five pillars:

• a system of internal controls;
• independent testing;
• appointment of a compliance officer or individual responsible for day-to-day compliance, who generally speaking should report to the Board of Directors, not a Senior Executive;
• appropriate training for all personnel who have some BSA compliance responsibility –and that incudes everybody, including the maintenance people.
• appropriate risk-based procedures for conducting ongoing Customer Due Diligence (CDD) and Enhanced Due Diligence, including determining Beneficial Ownership for designated business entities. (This is the additional “pillar” that was effective in May, 2018.

The good news: effective BSA Compliance doesn’t have to be expensive.

But it does require good planning, faithful monitoring and effective reporting. We can manage a BSA/AML program for your institution in a variety of ways, from onsite to on-the-web. Call us at 828-230-5802 and let’s talk it over.