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What Are The Examiners Really Looking For In Your Bank Secrecy Act - Bsa Program?
Credit unions everywhere are faced with the challenges of passing their Bank Secrecy Act examination. This exam also incorporates OFAC and the USA Patriot Act (Customer Identification Program – CIP). This article will assist your credit union in addressing those challenges by laying out the important components associated with this task.
Policies and procedures:
Policies need to address the credit union’s commitment to insuring overall compliance by Management, the Board of Directors, Supervisory Committee, and the credit union’s entire staff.
BSA also includes the Currency Transaction Report (CTR), the Suspicious Activity Report (SAR), the Report of Foreign Bank and Financial Accounts (FBAR) and the Report of International Transportation of Currency or Monetary Instruments (CMIR).
The CIP must address: receipt of certain identifying data on anyone who opens an account; verification of the identity of any customer who opens an account; maintenance of records; determination of whether the person appears on any government list; and, notice to the person that the credit union will be requesting information to verify identity.
The USA Patriot Act further requires the credit union to check their database against the Section 314(a) requests.
Credit union's BSA policy also needs to include: a system of internal controls, the designation of a BSA officer who coordinates/monitors BSA compliance (for OFAC, there must be a designated person in each physical location), independent testing (annual audit) and training of appropriate personnel (this would be everyone).
The credit union’s policy must also include the credit union’s commitment to a set of procedures that are familiar to each and every staff member.
Training:
Training for BSA procedures must be a monthly activity at any credit union. One or more procedures can be incorporated into a staff meeting or other regular training session, but at the very least on a quarterly basis.
In addition to staff training, it is imperative that any board or supervisory committee complete updated training on an annual basis to reinforce their knowledge of the process, as well as become familiar with any new procedures during the year. It is not acceptable for any volunteer or staff member to not have a working knowledge of the credit union’s BSA program!
Auditing:
Every financial institution is required to receive an annual audit of their BSA/OFAC/USA Patriot Act program.
Each credit union needs to maintain logs showing that they are flagging the appropriate cash transactions, and these logs must be signed by the auditing person (in some cases, the BSA Officer will sign off if someone else is maintaining logs for wires, etc.).
Rita sits on the Board of Managers for CUSAG, LLC, and is also acting CEO of Northern Lights Federal Credit Union.
She brings CUSAG her experiences, training, and education in the areas of ALM, credit union audits, policy development, compliance training (Rita is a NAFCU Certified Compliance Officer), as well as a BS in accounting and strong, hands-on experience in risk-based lending training, practices and reporting.
Source: www.a1articles.com