One of the changes in the recent FFIEC BSA Examination Manual updates was a move from having internal controls that “limit and control risk” to achieve compliance with BSA, to having internal controls that “mitigate and manage” risk associated with money laundering, terrorist financing (ML/TF) and other illicit financial activity.
This change stems from the July 22, 2019, Joint Statement on Risk-Focused Bank Secrecy Act/Anti-Money Laundering Supervision. The Statement said, “to assure BSA/AML compliance programs are reasonably designed to meet the requirements of the BSA, banks structure their compliance programs to be risk-based and to identify and report potential money laundering, terrorist financing and other illicit financial activity…Banks determine the levels and types of risks that they will assume and are encouraged to manage customer relationships and mitigate risks based on customer relationships, rather than declining to provide banking services to entire categories of customers.”
Limiting risk may have led many financial institutions to de-risk, in other words, they decline to provide banking services to entire categories of customers. For example, de-risking drove a lot of financial institutions to get out of high-risk activities, such as banking MSBs, marijuana-related businesses, etc. The updates to the BSA Examination Manual make it clear that examiners don’t want you to run away from risk, they want you to put appropriate controls in place and…manage it!
If you want more on the updates to the BSA Examination Manual, be sure to check out our webinar, The New BSA/AML Examination Manual, which is available now OnDemand.
See BSA/AML Free Tools Here – https://store.bankerscompliance.com/link/BSAFreeTools
Deb joined Banker’s Compliance Consulting with twenty years of experience in the banking industry. Her past positions include teller, credit review analyst, assistant financial officer, BSA Officer, Compliance Officer, and Director of Compliance. She has worked for both a small community bank and a large billion-dollar bank.
Deb has Associate Degrees in Business Management and Accounting. She is a graduate of the American Bankers Association National Graduate School of Compliance Management, an honors graduate of Schools of Banking Compliance School, and a graduate of Schools of Banking Advanced School of Banking. Deb’s considerable knowledge and experience make her a valuable member of the Banker’s Compliance Consulting Team. Deb is a Certified Regulatory Compliance Manager (CRCM) and a Certified Anti Money-Laundering Specialist (CAMS).
Deb loves to spend her free time cycling, running, kayaking and weight lifting with her husband. Between them, they have three adult children and six grandchildren. Other interests include anything outdoors and anything she hasn’t done or seen yet!