Compliance Center: FinCEN Advisory on Promoting a Culture of BSA/AML Compliance

The Financial Crimes Enforcement Network (FinCEN) recently issued an advisory to financial institutions highlighting the importance of a strong culture of BSA/AML compliance for senior management, leadership, and owners of all financial institutions.

The advisory was released in response to recent BSA/AML shortcomings that have triggers civil and criminal enforcement actions.

The advisory lays out the following guidelines for financial institutions:

Leadership Should Be Engaged

This includes the board of directors, senior and executive management. They should be actively engaged in the credit union’s BSA/AML compliance program and receive training tailored to their roles and remain informed of BSA/AML compliance practices within the credit union.

Compliance Should Not Be Compromised By Revenue Interests

Compliance, including submission of appropriate and accurate reports, should not be compromised by revenue interests. BSA/AML compliance should function independently within a financial institution, in order to be prepared to take action to address and mitigate risks from the business side of the institution.

Information Should Be Shared Throughout the Organization

BSA/AML compliance staff should have access to all relevant information. According to FinCEN, several recent enforcement actions noted that compliance staff was not given information, possibly due to the lack of an information-sharing mechanism. Fraud prevention and legal departments should be sharing information with compliance staff.

Leadership Should Provide Adequate Human and Technological Resources

Adequate human and technological resources should always be accessible. An individual should be designated as the person responsible for coordinating and monitoring day-to-day compliance, and appropriate support staff should be assigned to a BSA/AML compliance program based on an organization’s risk profile.

The Program Should Be Effective and Tested By an Independent and Competent Party

Compliance programs should be commensurate with an institution’s risk level, and should always include a proper ongoing risk assessment, sound risk-based customer due diligence and appropriate detection and reporting of suspicious activity. This should also include independent program testing from an independent, qualified, unbiased and non-conflicting entity.

Leadership and Staff Should Understand How Their BSA Reports are Used

Staff at all levels should understand the purpose of BSA reports. FinCEN considers the information provided among the most important information available for law enforcement and other security entities. Information provided can help initiate investigations, expand existing investigations, promote international information exchange and identify significant relationships, trends and patterns.

Compliance Question of the Week

If a check is made out to two people, can the credit union accept it for deposit with only one signature?

If a check is made out to two or more people and indicates that the funds are jointly owned (for instance, with an ‘and’ joining the parties), all parties are required to sign the check. If, on the other hand, the check indicates that the funds belong to any one of the people on the check (for instance, with an ‘or’ joining the parties), any one of the signatures is required.

When it is impossible to determine whether the funds are jointly or alternatively owned (for instance, with only a comma separating the parties), the assumption is that the check is payable to the people alternatively and therefore only one signature is required.   

Related Links:

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA has posted a video of its July 31, 2014 board meeting.

The August issue of the NCUA Report is now available.

The NCUA announced that there were 75 late filers for the second quarter Call Report.

Consumer Financial Protection Bureau (CFPB)

The CFPB has announced its finalized revisions to the Remittance Transfer Rule. The rule is effective 60 days after it is published in the Federal Register.

The CFPB has announced the participants of their Mortgage EClosing Pilot. A northwest credit union, BECU, is among the participants.

The CFPB released Bulletin 2014-01 regarding compliance and policy guidance to residential mortgage services and subservicers.

The CFPB announced tools that are now available to help parents teach their children about financial decisions and money management.

CFPB Director Richard Cordray delivered prepared remarks at the Association of Military Banks of America.

Federal Reserve Board (FRB)

FRB Chair Janet Yellen delivered remarks at the Federal Reserve Bank of Kansas City Economic Symposium on the labor market and monetary policy.

The FRB has released the minutes of the Federal Open Market Committee’s meeting from July 29, 2014.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of August 22, 2014. The last update prior to this was August 21, 2014.

Questions? Contact the Compliance Hotline: 1.800.546.4465,


Posted in Compliance News.