Presentation for the Bank Compliance Association of Connecticut (BCAC) September 21, 2016 FDIC New York Region BSA Examinations in 2015: to p Program violation of 326.8(b)(1) - Failure Implement Adequate BSA Compliance Program — 3% Pillar violation of 326.8(c)(1) -Inadequate System of Internal Controls for BSA Compliance— 9% • Pillar violation of 326.8(c)(2) - Lack of Independent Testing of BSA Compliance — 3% 326.8(c)(3) -Failure to Designate Individuals) + Pillar violation of Responsible for BSA Compliance— 2% > Pillar violation of 326.8(c)(4) -Failure to Provide Adequate BSA Training — 3% 2 ~nmu~Erosi. sowwce coRvoanr a FDIC New York Region BSA Examinations in 2015: Failure to File a SAR —11 Failure to File a Timely SAR — 7% e Failure to Furnish Information Required in CTR — 3% Failure to Search Records for 314(a) Purposes — 2% > All other BSA Violations -1 % or 0% 3 1
Identification of High -Risk Customers Look at new and existing customers Consider customers on whom SARs have been filed Consider customers on whom bank received criminal subpoenas + Consider customers involved in potentially high -risk products/services/geographies 1 ~ - ~. - Training All appropriate personnel should be trained job function + Training should be consistent with employee well as bank -specific policy 6 Training on regulations as Training on previous audiUexamination findings Training should be commensurate with the activities and BSA/AML risk profile of the bank Section 314(a) Information Sharing + Policies/procedures should include requirement to review customers for suspicious activity positive 314(a) hit Maintain appropriate records regarding search results 3~d party searches, a written < If a is used to conduct agreement should be in place 2
a a n Section 314(b) Information Sharing (if bank chooses to participate) File notice of intent to share information > Implement policies and procedures Designate a contact person Ensure confidentiality of information Prior to sharing, ensure that the other institution has filed a to share notice of intent information include requirement to review for Policies/procedures should suspicious activity FinCEMs SAR Activity Review Trends, Tips, and Issues -Issue 9: If a financial institution is served with any subpoena requiring disclosure the fact that SAR has been filed or of the SAR itself, of a except to the extent that the subpoena is submitted by an appropriate law enforcement or supervisory agency, the financial institution should neither confirm nor deny the existence of the SAR. The financial institution should immediately notify the Office of Chief Counsel at FinCEN at (703) 9053590, as well as the financial that regulator's institution's federal functional regulator under parallel requirement, if any. if requesting party is not an authorized agency, do not provide SAR, and neither confirm nor deny the existence of a SAR. if requesting party is an appropriate lawenforcement or supervisory agency, provide requested SAR and SAR supporting documents upon request. Outstanding Guidance: FIN -2007-G003 (SAR Supporting Documentation) FIN -2010-A014 (Maintaining the Confidentiality of SARs) > FIN -2012-A002 (SAR Confidentiality Reminder) 3
Final Rule for CDD Requirements for Financial Institutions Issued on May 11, 2016. 2018 ¢ Covered institutions must comply by May 11, < Rule includes CDD requirements t Rule includes requirements for collection of beneficial ownership information incorporated into CDD requirements will be Section 326.8 of FDIC Rules and Regulations FinCEN issued FAQs on July 19, 2016 (FIN -2016-G003) Rebecca Seymour Williams Special Activities Case Manager FDIC —Boston Area Office (781)794-5634 ReWilliams@fdic.gov
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