FinCEN Launches “FinCEN Exchange”

The program will brief financial institutions on illicit finance threats, enabling your credit union to better identify risks and focus on high-priority issues.

12/12/17

Picture of man working on a laptopThe Financial Crimes Enforcement Network (FinCEN) has launched the FinCEN Exchange program, which is designed to enhance information sharing with financial institutions. FinCEN, in coordination with law enforcement, will hold regular meetings to brief financial institutions on priority illicit finance threats, including targeted information and broader typologies. This will enable financial institutions to better identify risks and focus on high-priority issues.

Credit union participation in FinCEN Exchange is strictly voluntary, and the program does not introduce any new regulatory requirements. It also does not replace or otherwise affect existing mechanisms by which law enforcement engages directly with the financial industry.

It is part of Treasury’s broader objective of strengthening the anti-money laundering framework by encouraging, enabling, and acknowledging more regular industry focus on high-value and high-impact activities. Operational briefings under the FinCEN Exchange program will begin in the coming weeks.

Law enforcement relies on the financial industry to report important data to fight financial crime through mechanisms such as Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs). The government, in turn, provides feedback to the private sector, including through FinCEN Advisories, SAR Statistics, briefings, and other forms of information to guide and encourage industry efforts.

Since 2015, FinCEN has convened over a dozen special briefings in five cities with more than 40 financial institutions and multiple law enforcement agencies. In connection with these briefings, FinCEN, working closely with law enforcement, issues requests pursuant to Section 314(a) of the USA PATRIOT Act related to investigations and provides associated financial typologies. Information provided after the briefings by financial institutions through SARs has helped the public sector map out and target weapons proliferators, sophisticated global money laundering operations, human trafficking and smuggling rings, corruption and trade-based money laundering networks, among other illicit actors.

The briefings also have proved useful to financial institutions, helping them focus on specific priorities and better identify risks.

FinCEN Exchange will build on the success of these efforts by convening more regularly scheduled and as-needed operational briefings across the nation with law enforcement, FinCEN, and financial institutions to exchange information on priority illicit finance and national security threats. In consultation with law enforcement, FinCEN will invite financial institutions to participate based on a variety of factors, including whether they may possess information relevant to a particular topic.

While the contours of each briefing will vary, the information shared, whether through Section 314(a) of the USA PATRIOT Act or other authorities, will often include information intended to support specific lines of investigation or broader typologies related to a particular illicit finance threat. After receiving information at a FinCEN Exchange operational briefing, financial institutions will be better equipped to incorporate responsive information into SARs.

FinCEN encourages financial institutions to voluntarily share, as appropriate, information with other FinCEN Exchange participants as well as other financial institutions or associations of financial institutions pursuant to Section 314(b) of the USA PATRIOT Act.

Compliance Question

Can we require that loan payments be made via recurring transfers from the member’s account to the loan or a required direct deposit?

No. Regulation E specifically prohibits lenders conditioning a loan approval based on required electronic funds transfer. You can incentivize the member to set up automatic payments with different programs, such as lowering the APR, but you cannot require automatic electronic payments as a condition of the loan.

Resources

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced that it has a new agency seal—a result of an executive order from President Trump.

NCUA Board Member Metsger spoke at the Oregon Department of Financial Services CEO Roundtable in Salem, Oregon. During his speech, Metsger reminded credit union that the NCUSIF may be required to increase loss reserves as the values of taxi medallions decline.

Consumer Financial Protection Bureau (CFPB)

The CFPB Ombudsman’s Office released its 2017 Annual Report.

Federal Housing Finance Agency (FHFA)

The FHFA announced that it published an Update on Implementation of the Single Security Initiative and the Common Securitization Platform, which details the progress towards implementation of the Common Securitization Platform and launch of the Uniform Mortgage-Backed Security.

Federal Reserve Board (FRB)

The FRB announced that it proposing to amend Regulation A. The proposal seeks to revise the provisions for the establishment of the primary credit rate in a financial emergency and to delete the provisions relating to the use of credit ratings for collateral for extensions under the former Term Asset-Backed Securities Loans Facility.

Federal Deposit Insurance Corporation (FDIC)

The FDIC released its Fall 2017 issue of Consumer News. This issue focuses on helping consumers understand how to deal with debt.

The FDIC announced the release of its Third Quarter 2017 state profiles.

Nationwide Multistate Licensing System & Registry (NMLS)

The NMLS has released the agenda for its 2018 Annual Conference and Training, which will be held February 6-9, 2018 in New Orleans.

Financial Crimes Enforcement Network (FinCEN)

FinCEN announced the launch of its Exchange program aimed at enhancing information sharing with financial institutions. The program will allow FinCEN to convene briefings with financial institutions to exchange information on priority illicit finance threats.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of Dec. 5, 2017. The last update prior to this was Nov. 29, 2017.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.