Financial Crimes Enforcement Network Issues Two Notices


The Financial Crimes Enforcement Network (FinCEN), along with other federal financial institution regulators, recently released two notices, which have implications for credit union Bank Secrecy Act programs. 

The first notice is an order that grants exemption from customer service identification program requirements for loans that are extended to commercial customers to facilitate purchases of property and casualty insurance policies. Due to the structural characteristics of premium financing lending, these transactions present a low risk for money laundering activity and terrorist financing. 

The second is an interagency statement on sharing bank secrecy act resources. Collaborative arrangements involve two or more credit unions with the objective of participating in a common activity or pooling resources to achieve a common goal. Credit unions may benefit from using shared resources to manage certain BSA/AML obligations more efficiently and effectively. However, credit unions should approach the establishment of collaborative arrangements like other business decisions, with due diligence and thorough consideration of the risks and benefits. Credit unions are encouraged to contact the NCUA regarding sharing BSA resources. 

Question of the Week 

How do I protect my credit union from liability if I take a power of attorney?  

To protect a credit union from liability, the person holding the power of attorney should fill affidavit (or certification) stating several facts:   

  • First, the person presenting himself or herself as the attorney-in-fact and signing the affidavit or declaration is the person named in the power of attorney.  
  • If the attorney-in-fact is named in the power of attorney as a successor attorney-in-fact, the affidavit should include the circumstances or conditions stated in the power of attorney that have occurred that would cause that person to become the acting attorney-in-fact.  
  • Further, that to the best of the attorney-in-fact’s knowledge, the principal is still alive and at the time the power of attorney was signed, the principal was competent to execute the document and was not under undue influence to sign the document.  
  • In addition, that all events necessary to making the power of attorney effective have occurred.  
  • The affidavit must also state that the attorney-in-fact does not have actual knowledge of the revocation, termination, limitation, or modification of the power of attorney or of the attorney-in-fact’s authority.  
  • That the attorney-in-fact does not have actual knowledge of the existence of other circumstances that would limit, modify, revoke, or terminate the power of attorney or the attorney-in-fact’s authority to take the proposed action.  
  • If the attorney-in-fact was married to the principal at the time of execution of the power of attorney, then at the time of signing the affidavit or declaration, the marriage of the principal and the attorney-in-fact has not been dissolved or declared invalid.  
  • Lastly, that the attorney-in-fact is acting in good faith pursuant to the authority given under the power of attorney. 

Idaho and Washington each have state law provisions regarding these affidavits or “certification of power of attorney.” 

Related Links: 

RCW 11.125.430
ORS 127.035
IDS 15-12-119
ID Certification 

Legal Briefs 

National Credit Union Administration (NCUA) 

The NCUA, jointly with FDIC, FRB, OCC, and FinCEN released a statement explaining how financial institutions can share BSA/AML resources in order to better protect against illicit financial risks and reduce costs. The NCUA also issued Letter to Credit Unions 18-CU-04, explaining the interagency statement.  

NCUA Chairman McWatters delivered testimony before the Senate Committee on Banking, Housing and Urban Affairs. In his statement, McWatters encouraged Congress to take action to expand the FCU Act to provide more access to underserved households, expand NCUA authority to allow supervision of third-party vendors, and thanked Congress for the recent regulatory relief benefitting credit unions.  

Federal Reserve Board (FRB) 

The FRB issued SR 18-7, which provides updates regarding the expanded examination cycle for certain state member banks and U.S. branches and agencies of foreign banking organizations.  

Federal Emergency Management Agency (FEMA) 

FEMA issued a final rule suspending several areas in Oregon for noncompliance with floodplain management requirements under the National Flood Insurance Program (NFIP).  

Office of the Comptroller of the Currency (OCC) 

OCC Comptroller Otting delivered testimony before the Senate Committee on Banking, Housing, and Urban Affairs regarding the OCC’s implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act.  

Federal Housing Finance Agency (FHFA) 

The FHFA announced that it is requesting public input regarding Fannie Mae and Freddie Mac’s proposed Duty to Serve plan modifications.  

Federal Deposit Insurance Corporation (FDIC)
The FDIC released its report on Small Business Lending Survey.  

FDIC Chairman McWilliams delivered testimony before the Senate Committee on Banking, Housing and Urban Affairs regarding the implementation of Economic Growth, Regulatory Relief, and Consumer Protection Act.  

Office of Foreign Assets Control (OFAC)
OFAC has updated the SDN list as of October 4, 2018. The last update prior to this was October 2, 2018. 

Questions? Contact the Compliance Hotline: 1.800.546.4465;

Posted in Compliance News.