Don’t Disregard IP Addresses!

When you conduct Regulation E dispute investigations, do you get information on IP addresses?  If so, that information can be useful not only in your investigation but it can also be useful when it comes to suspicious activity reporting.

Micaela explains more in the video.

To learn more about Regulation E disputes, be sure to check out “Regulation E: Errors & Disputes” which is available now OnDemand.  We also have a webinar coming up in July on Suspicious Activity monitoring and reporting.  Don’t miss it!


BSA Board Training

Can you believe it’s already September?  Over half the year has passed, and most likely, a lot of that time has been spent working remotely and in virtual meetings.  Given all of the time and effort dedicated to managing through COVID-19 and this “new normal”, we want to remind you about your annual BSA Board training!

On April 3, 2020, the Financial Crimes Enforcement Network (FinCEN) provided further information in response to the Coronavirus Disease 2019 (COVID-19) pandemic.  While this release acknowledged the potential for CTR reporting delays (and delayed implementing the new CTR filing requirements for DBAs), there wasn’t grace granted for anything else. 

While the regulation doesn’t technically require “annual” Board BSA training per se, it has become an industry expectation.  The Board should be updated, at least annually, on BSA even if there are no changes.  We believe doing so is a good reminder to the Board of how important BSA is.  It also keeps BSA in the forefront, since the Board is ultimately responsible for BSA compliance.

Given the environment we’re in, with revisions to the BSA/AML Exam Manual, COVID-19 pandemic-related scams, and the unique and often remote operating environment, updating the Board to ensure their BSA knowledge remains sharp is critical.  Hint hint…those three things might be great additions to this year’s training, in addition to the general BSA requirements. 

Below are questions we find engaged Boards ask their BSA Officers, and are great to keep in mind when developing your Board training to ensure you’re providing them with the things they need to know to sufficiently execute their duties.  The answers to some of these may be found within your independent test, but there may have been updates to your program since then as well:

Are we doing the right things, and are we doing them well?  How do we compare to others?
Know what enforcement actions and penalties are being imposed.

Are we sufficient, competent and effective?
Is your program effective? Is suspicious activity being identified and referred /reported?

Are our program components properly positioned?
Are you devoting resources and staffing to those areas of greatest concern/risk?

Are we outsourcing and in-sourcing the right processes in line with our competencies and economies?  Are we properly managed and accountable in all cases?
If conducting an internal independent audit, should it be outsourced?  Should third-party vendors be used for OFAC, 314a, identity verification, etc.?

Top-down and bottom-up – is our program working as intended?
Is enough information being reported UP to the Board/Management so they can provide appropriate direction DOWN in the form of resources, authority, etc.?

Now is a great time to start thinking about your annual BSA Board training, if you haven’t already done so.  BSA is not something you want to let fall on the back burner during these unprecedented times.  If you need help or want more training, we have a wide variety of BSA-related webinars available On Demand.  We also have a webinar devoted specifically to annual BSA training for your Board & Management coming up on December 10, 2020. 

NEED FREE BSA or AML Tools? Check them out here –


Reg CC Look-back Post July 1 Changes

The July 1, 2020, effective date for the Regulation CC changes has come and gone.  But, that doesn’t mean additional questions won’t continue to arise after you implement the changes. 


Below are the two most frequently asked questions we’ve received lately:

Question: Are checks deposited through Automated Teller Machines (ATMs) into a transaction subject to the new availability thresholds?

Answer: For proprietary ATMs, yes.  For non-proprietary ATMs, there is an exception.  Specifically, the Commentary to §229.10(c) #5 states the $225 next-day rules don’t apply, and this is reiterated in the Commentary to §229.12(f), as well. 

Your bank’s Funds Availability Disclosure will be the driver.  Most often we see these disclosures state something to the effect of “checks deposited through ATMs into a transaction account will follow our normal funds availability schedule”.  As a reminder, ensure both what you’re doing, and what you say you’re doing align with one another and the regulation. 

Question:  Are checks deposited through Mobile Deposit (phone app) into a transaction account subject to Regulation CC?

Answer:  The answer is “yes” and “no”.  Mobile deposits are NOT subject to the funds availability rules of Regulation CC (aka Subpart B), but they are subject to the check collection rules of Regulation CC (aka Subpart C).  While you don’t have to make funds from mobile deposits available in accordance with the Regulation CC timeframes or include them in your Funds Availability Disclosure, funds availability for mobile deposits should be addressed in your mobile banking agreement.  While you have some latitude, we generally recommend making mobile deposits available similar to paper checks.

In addition to the things noted above, and while it will vary from bank to bank, we’ve compiled a list of things you don’t want to forget to do, such as:

  • Notify customers:

Your customers should have already been notified of these particular changes (by July 31st).  If you haven’t done this, you should still do so ASAP!  As a reminder, customers should typically receive notice of Regulation CC changes 30 days before the change is effective; however, when the change benefits the customer, notice may be provided up to 30 days after the effective date.

  • Update the following, as applicable:
    • Policies, procedures, and processes;
    • Technology/systems (if automated);
    • Disclosures;
    • Hold notices;
    • Funds availability poster (if it contains this level of detail); and,
    • Account terms and conditions.
  • Update training material and train appropriate staff.

As we’ve been conducting reviews in banks, one common error we’re finding is miscalculating the amount that should be made available to the customer.  To help eliminate this error, we’re encouraging banks to explore system capabilities.  Many bank systems have the ability to automatically calculate holds and print notices, yet we don’t typically see it utilized.  Given that the dollar amount changes are in odd amounts and will now adjust every five years based upon the consumer price index, this may be worth exploring. 

If you need additional training on the Regulation CC changes, be sure to check out our Regulation CC webinar, which is available now On Demand.


OCC Risk Perspective

The OCC recently released their Spring 2020 Semiannual Risk Perspective.  While a majority of the data is as of December 31, 2019, the bulk of the comments and analysis encompasses the effects of the COVID-19 pandemic. 

As it relates to compliance, risk is increasing, and the increase is driven by COVID-19.  As banks encountered reduced operations, employees teleworking, and a rapidly changing customer service environment; they were also expected to support customers via the CARES Act, process high volumes of PPP applications quickly, and implement a variety of forbearance and deferred payment programs. 

Banks are Stronger Than They Have Ever Been

The good news is that prior to this economic downturn, banks were the strongest they’ve been for some time. Matters requiring attention (MRA) and banks rated 4 and 5 were at 10-year lows.  This allowed banks to be a source of strength for their customers. 

The Risk Perspective highlighted the Bank Secrecy Act (BSA), and specifically addressed criminals adapting scams and money laundering techniques to exploit vulnerabilities created by the pandemic.  We addressed this in more depth in our blog.  It also addressed the transition away from the London InterBank Offered Rate (LIBOR) which we will tackle in our August 2020 Magazine.

Clarifying BSA Regulatory and Risk Management Exceptions

Finally, the OCC reiterated their previous statements clarifying BSA regulatory and risk management expectations recognizing that there may be reasonable delays in meeting compliance obligations during the pandemic.  While banks are being granted grace in terms of timeliness, it is important to note that this guidance does not remove or lessen BSA compliance expectations. 

We are Here to Help

As we’re maybe beginning to see a light at the end of the tunnel, the economy is reopening, and banking returning to a “new normal”, know that we are here to support you.  We know this has been difficult, that compliance programs have been stressed to the max, and that all of us are crossing our fingers that things were done correctly so we won’t find ourselves redoing them later.  We offer services from pre- and post-closing reviews, compliance reviews, phone and email support, etc.  We can bring you peace of mind by reviewing and identifying any concerns now so that you can fix them prior to your next exam.