FFIEC Updates Bank Secrecy Act/Anti-Money Laundering Exam Manual

The Federal Financial Institutions Examination Council (FFIEC) has updated sections and related examination procedures in the FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual.

The sections affected include:

  • Introduction – Customers (new)
  • Charities and Nonprofit Organizations
  • Independent Automated Teller Machine Owners or Operators
  • Politically Exposed Persons

The updates should not be interpreted as new requirements or as a new or increased focus on certain areas. Rather, these sections provide information and considerations related to certain customers that may indicate the need for bank policies, procedures, and processes to address potential money laundering, terrorist financing, and other illicit financial activity risks. These sections provide further transparency into the BSA/AML examination process.

The sections also remind examiners that no specific customer type automatically presents a higher risk of money laundering, terrorist financing, or other illicit financial activity. Further, financial institutions that operate in compliance with applicable BSA/AML requirements and reasonably manage and mitigate risks related to the unique characteristics of customer relationships are neither prohibited nor discouraged from providing accounts or services to any specific class or type of customer.

The manual provides instructions to examiners for assessing the adequacy of a bank’s or credit union’s BSA/AML compliance program and its compliance with BSA regulatory requirements. The manual itself does not establish requirements for banks; such requirements are found in statutes and regulations.

New and revised manual sections are identified by a 2021 date on the FFIEC BSA/AML InfoBase.

Question of the Week

Q. Does an individual with power of attorney (POA) have the authority to close a membership account?

A. Yes, absent any language in the POA limiting the agent’s authority, an agent can close an account and withdraw the final shares, just as the member could.

Compliance Alerts

Consumer Financial Protection Bureau

CFPB Issues Final Rule to Facilitate Transition from LIBOR: The CFPB issued the final rule to amend Regulation Z and facilitate transitioning away from the LIBOR interest rate index. The rule establishes requirements for how creditors must select replacement indices for existing LIBOR-linked consumer loans after April 1, 2022. No new financial contracts may reference LIBOR as the relevant index after the end of 2021. Starting in June 2023, LIBOR can no longer be used for existing financial contracts.

Supervisory Highlights, Issue 25, Fall 2021: The CFPB issued the latest edition of its Supervisory Highlights. The findings included in this report cover examinations completed between January 2021 and June 2021 in the areas of credit card account management, debt collection, deposits, fair lending, mortgage servicing, payday lending, prepaid accounts, and remittance transfers.

Office of Foreign Assets Control

OFAC has updated the SDN list as of Dec. 10. The last update prior to this was Dec. 6.

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

Posted in Compliance News, Compliance News, Compliance Question.