1 Identification of High -Risk Customers Look at new and - - PDF document

SLIDE 1

Presentation for the

Bank Compliance

Association

• f

Connecticut

(BCAC)

September 21, 2016

FDIC

New

York Region

BSA

Examinations

in

2015:

p Program

violation of 326.8(b)(1)

• Failure

to Implement

Adequate

BSA

Compliance Program

—

3%

Pillar violation

• f

326.8(c)(1)

• Inadequate

System

• f

Internal Controls for

BSA

Compliance—

9%

• Pillar violation
• f

326.8(c)(2)

• Lack
• f

Independent Testing

• f

BSA

Compliance

—

3%

+ Pillar violation

• f

326.8(c)(3)

• Failure

to Designate Individuals) Responsible for

BSA

Compliance—

2%

> Pillar violation

• f

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

• ther

BSA

Violations

• 1

%

• r

0%

3

1

SLIDE 2

Identification

• f

High-Risk Customers

Look

at

new and

existing

customers Consider customers

• n

whom SARs

have been

filed

Consider customers

• n

whom

bank received

criminal

subpoenas

+ Consider

customers involved

in potentially high-risk

products/services/geographies

1

~

• ~.

Training

All

appropriate personnel should

be

trained + Training should be consistent with

employee

job function 6 Training

• n

regulations

as

well

as bank-specific

policy Training

• n

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 positive 314(a)

hit

customers

for suspicious activity Maintain appropriate records regarding search results

< If

a

3~d party is used

to conduct searches,

a

written

agreement should be

in place

2

SLIDE 3

Section 314(b) Information Sharing

(if bank

chooses

to participate)

File notice

• f

intent to

share information

> Implement

policies

and procedures

a

Designate

a

contact person Ensure confidentiality

• f

information Prior to sharing, ensure that the

• ther

institution has filed a notice

• f

intent to

share information Policies/procedures should include requirement to review

for suspicious activity

FinCEMs SAR

Activity Review

Trends, Tips, and Issues

• Issue

9:

If

a

financial institution is served with

any subpoena

requiring disclosure

• f

the fact that a

SAR

has been

filed

• r
• f

the

SAR

itself,

except to the extent that the subpoena

is submitted

by an appropriate law enforcement

• r

supervisory agency, the financial institution should neither confirm nor deny the existence

• f

the

SAR.

n

The

financial institution

should immediately

notify the Office

• f

Chief Counsel at FinCEN at (703) 9053590, as well

as the

financial institution's federal functional regulator

under that regulator's

parallel

requirement,

if

any. if

requesting party

is not

an

authorized agency,

do

not provide

SAR, and

neither confirm nor

deny the

existence

• f

a SAR.

if

requesting party

is

an

appropriate lawenforcement

• r

supervisory agency, provide requested

SAR

and

SAR

supporting documents upon request. Outstanding Guidance:

a

FIN-2007-G003

(SAR

Supporting Documentation) FIN-2010-A014 (Maintaining the Confidentiality

• f

SARs)

> FIN-2012-A002

(SAR

Confidentiality Reminder)

3

SLIDE 4

Final

Rule for

CDD

Requirements for

Financial Institutions Issued

• n

May

11, 2016.

¢ Covered institutions must

comply by

May

11,

2018

< Rule

includes

CDD

requirements

t Rule

includes requirements for collection of beneficial

• wnership

information

CDD

requirements

will be

incorporated into Section 326.8

• f

FDIC Rules and

Regulations

FinCEN

issued FAQs

• n

July 19,

2016 (FIN-2016-G003)

Rebecca Seymour

Williams Special

Activities Case

Manager FDIC —Boston Area

Office

(781)794-5634 ReWilliams@fdic.gov