BSA Training

Doing annual BSA/AML training for your team members can often feel like you’re in the movie Groundhog Day.  They’re probably thinking, “haven’t we done this before”?  The key is to keep things fresh and interesting but it can be hard to create buy-in.  You also have the task of training not only your front-line personnel but your Board as well.  What these two groups need to be trained on is vastly different.  Your front-line people need to know when to do things, how to do things, etc.  The nuts and bolts.  Your Board, on the other hand, needs a general understanding of the requirements but they don’t need all the specific details.  They need a 10,000 foot-view.  Finding time to train both groups can also be a challenge.  We’d love to be your solution!


Join us on December 6, 2018, for our BSA/AML Annual Overview webinar which is geared towards your front-line and what they need to know.  We are also offering a BSA/AML Annual Management & Board webinar on December 13, 2018, which will focus only on what your Board needs to know.  The best part?   The comprehensive plain English training manual and free recording!  You can listen to the recording all at once or in small chunks over the course of several months.  It’s up to you!



Refinances and the 90-Day “Renewal” Exception

We’ve been getting a lot of questions about whether a “Refinance” falls under the broad definition of “Renewals” under the Beneficial Owner Rule.


After several discussions with representatives at FinCEN, we have a clarification for you!


According to FinCEN, a refinance is a transaction in which an existing obligation is satisfied and replaced by a new obligation.  Whether or not the loan number changes or remains the same doesn’t matter.  The question is simply will there be a NEW obligation?  If the answer is “yes”, then there is a NEW contract and the transaction will NOT fall under the broad definition of a Renewal.


Why is this important?  First, the relief provided by FAQ #12 in the April 3, 2018 Guidance that allows the customer and bank to enter an agreement whereby the customer will notify the bank of any change in beneficial owner information, rather than obtaining a new certification at “renewal”, will NOT apply to Refinances or any other new obligation.


Second, the May 16, 2018 90-day limited exceptive relief from the beneficial owner rules for “renewals and rollovers” will NOT apply to Refinances.


Maybe this wasn’t the answer you were hoping for, but at least it’s clarification that you can now train on and implement!


Remain Calm and Carry On!


Deb Irving

FinCEN Interpretive Update on the 90-Day Beneficial Owner Exemption!!!

One of our clients reported that FinCEN provided them a different response regarding the use of the term “automatic” in last week’s 90-day ruling.  Here’s the response verbatim from FinCEN on 5/25/18 (emphasis added):


Good day,


There has been some discussion as to which CD and Loan rollovers and renewals would be covered by the temporary exceptive relief granted by the recent Administrative Ruling.  Within the Admin Ruling, there is mention of it covering both those that “automatically” rollover or renewal, and that statement is immediately followed by a reiteration of the exceptive relief that omits the word “automatic”.   After discussing this issue with our Policy Division yesterday, it has been determined that the exceptive relief shall be liberal in its coverage, not limited to only those that rollover or renew “automatically”, but all CD and Loan rollovers/renewals that meet the terms outlined in the Admin Ruling.



FinCEN’s Resource Center


We also sent a follow-up to FinCEN to confirm the response provided to our client and they confirmed.  So… in plain English, it looks like any CD or Loan renewal or rollover completed between 5/11/18 through 8/9/18 will be excluded from the beneficial ownership requirements, if the account was established before May 11, 2018.  While it is a direct response from FinCEN, it’s not exactly “official”.  I would love to see something more official like the “90-day ruling” that was issued; however, as of today, this is all we have.   Stay tuned!



Jerod Moyer

2017 Interagency Fair Lending Hot Topics

In our December 2017 Newsletter, we gave a summary of the November 16, 2017, Outlook Live Webinar on 2017 Interagency Fair Lending Hot TopicsFair Lending is an issue that continues to be a hot topic and this webinar gave some good insights.


The Federal Reserve discussed Compliance Management for Consumer Loans, specifically pricing discretion and exceptions.  It even provided a sample spreadsheet that could be used for exception tracking.


The FDIC discussed Fair Lending Monitoring Programs.  Similar to the exception tracking, what you need to do really depends on the level of pricing discretion you allow.  If you don’t allow pricing discretion, all you really need to do is confirm that your pricing conforms to your guidelines.  However, to the extent discretion is allowed, you need to dig deeper, until you can hopefully explain that any disparities are the result of credit-related factors.  Another thing they pointed out is that use of a third party doesn’t protect you from fair lending risk, “Risks associated with third-party relationships are the same as if the bank had performed the service directly”.


HUD gave a summary of the over 8,000 complaints it received in 2016 and the Department of Justice discussed Denials Investigations and Cases, while the NCUA also discussed Special Purpose Credit Programs.


Most banks allow pricing discretion to one extent or another, which is why file documentation is so extremely important!  Why was one applicant given the opportunity to pay down a credit card while another applicant was denied quickly?  The subjectivity involved with fair lending makes it one of, if not the most, challenging aspect of a compliance program.  Seemingly innocent actions can lead to big problems.  Concerns over potential discrimination continue to result in referrals to the Department of Justice, including those dealing with redlining, pricing, underwriting, spousal signatures, and credit reporting.


Want to learn more?  Be sure to check out the Fair Lending webinar we did back in January for more information on this and other hot Fair Lending issues.


Diane Dean

Flood Insurance: It’s still hot!

Did you know an estimated 70% of Hurricane Harvey victims were not covered by flood insurance?  With the National Flood Insurance Program already in debt, increasing flood disaster claims coming in, and the push for more homeowners to carry flood insurance, we don’t see the focus on flood insurance compliance calming down anytime soon!  Are you up on all the requirements?  Non-compliance can result in civil money penalties of $2,000 per violation.  In other words, you don’t want to mess it up!


Let us get you on the right track!  Be sure to join us for a two-part Flood Insurance webinar series.  Part 1 will be on March 22, 2018, and Part 2 will be on March 29, 2018.  That’s four hours of comprehensive flood insurance training you don’t want to miss!


Deb Irving