Updated BSA Guidance from FFIEC and FinCen

The Federal Financial Institutions Examination Council (FFIEC) has made several updates to the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examiner’s Manual.

The changes are unrelated to the coronavirus disease (COVID-19) pandemic, nor do they include any new requirements. The update is intended to provide more specific instructions to examiners for risk-focusing examinations, as well as instructions on how to assess a credit union’s compliance program, including internal controls, independent testing, BSA Officer qualifications & training.

It notes that credit unions should be prepared:

• To provide an adequate risk assessment, which generally involves the identification of specific risk categories (products, services, members, and geographic locations) unique to the credit union, and an analysis of the information identified to better assess the risks within these specific risk categories:
• Include new products, services and member types, introduced since your last exam;
• Include new products, services and member types added through mergers and acquisitions.
• To describe the credit union’s processes for updating your BSA/AML assessment as necessary to reflect changes in products, services, members and locations;
• To have more extensive testing in areas that have had significant changes in their business strategies, geographic locations, transaction activity, products, services, member types, operations, and/or technology since your previous exam;
• To demonstrate how you document the BSA/AML risk assessment in writing to effectively communicate Money Laundering/Terrorist Financing (ML/TF) to appropriate credit union personnel, and to all business lines across the credit union, your Board of Directors, and management;
• To provide a written BSA/AML Compliance Program, tailored to the credit union’s unique risk-profile that includes internal controls, independent testing, the designation of a qualified BSA Officer, Member Identification Program, Customer Due Diligence and Beneficial Owner procedures.
• To have the same areas tested in successive examinations based on previous exam findings.

FinCen: Updated BSA Guidance
The Financial Crimes Enforcement Network, FinCen, has released further information to assist financial institutions complying with their BSA obligations during the COVID-19 pandemic, including the launch of a new website feature to help track ongoing concerns regarding BSA compliance, and some reporting relief.

Information is provided includes:
Compliance with BSA obligations - Compliance remains crucial to protecting our national security. Credit unions must continue to ensure risk-based compliance.
Beneficial Ownership information collection requirements for existing members - Due diligence requirements for business accounts.
BSA reporting obligations & updates to currency transaction report (CTR) filing obligations - FinCEN February 6, 2020 ruling for CTR filing on transactions involving sole proprietorships and entities operating under ‘doing business as’ has been suspended until further notice. Credit unions that have already made changes to comply with the suspended rule do not have to change back. They can report under the new rule.
New FinCEN COVID-19 online contact mechanism - An online contact mechanism for financial institutions to communicate to FinCEN COVID-19 related concerns while adhering to their BSA obligations.
Encouragement of innovative efforts and other reminders - Encouragement and reminders to stay compliant and use resources.

FinCen has also provided Frequently Asked Questions regarding Paycheck Protection Program loans in relation to FinCEN’s Customer Due Diligence Rule and Beneficial Ownership requirements.