A â€˜Positive Stepâ€™ -- Bank Secrecy Act/Anti-Money Laundering Exam Manual Revised
The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and Conference of State Bank Supervisors revised the manual in collaboration with FinCEN, the administrator of the BSA. The Office of Foreign Assets Control (OFAC) collaborated on the revisions made to the section that addresses compliance with economic and trade sanctions administered and enforced by OFAC.
â€œWe see it as a move in the right direction. During the revision process, a subcommittee formed to review the examination process heard feedback from the industry. And theyâ€™ve taken a great deal of our feedback and incorporated it in to these revisions,â€ Behram said.
The BSA/AML issue is a complex and perplexing (at times) for bankers to go through, Behram noted. â€œItâ€™s not easy to sit down and absorb 400 + pages on a subject and become an overnight expert,â€ she noted. The revised manual addresses â€œSome of the issues weâ€™ve brought up over the past year. Itâ€™s a positive step for our institutions because it provides clarifications, sheds some light on guidance and best practices for examiners in the field.â€
Behram praised the call for consistency across the board for examiners. She said that theyâ€™re also hoping to see FFIECâ€™s joint agencies have cross training for examiners for â€œEven further consistency. Weâ€™ve always been a proponent of cross training so that the examiners know the exam manual as well as our bankers do,â€ she explained.
The exam manual is for the examiner, it should be a roadmap for the examiner and what the institution can expect during an examination, she added.
These revisions will also help examiners increase their knowledge and experience in detecting money laundering. Precise estimates donâ€™t exist for the amount of money that is laundered worldwide every year, but the International Monetary Fund estimates the figure at between $590 billion and $1.5 trillion - two to five percent of the entire global gross domestic product, said John Reich, Director of the Office of Thrift Supervision during a speech given to the FFIEC Advanced BSA/AML Specialists Conference.
â€œToday, money laundering and terrorist financing remain major challenges for our banking institutions that are the gatekeepers to the financial system. The 2007 National Money Laundering Strategyâ€”issued jointly in May by the Treasury Department, Justice Department, and Homeland Securityâ€”listed the continued safeguarding of the banking system as â€œGoal No. 1,â€ Reich added.
â€œThere is also another positive and unmistakable sign that our efforts are bearing fruitâ€”that financial institutions and federal regulators are making substantial progress in identifying, clarifying and complying with BSA/AML requirements. Consolidated Quarterly Report statistics compiled by FinCEN show that since 2005, enforcement actions related to BSA compliance have declined for the OTS, as well as the FDIC, OCC and the Federal Reserve. This decline signals that BSA compliance, which was new and little understood just a few short years ago, is becoming ingrained in the operations of federally regulated financial institutions,â€ Reich noted.