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BSA/AML training - key to creating and maintaining a culture of compliance

Take advantage of Corporate One’s BSA/AML training on a live webinar May 28-29, 2014

May 13, 2014

By: Jennifer Morrison, VP, Senior Risk Manager

Jennifer MorrisonA culture of compliance is more than a set of policies and procedures. It is a cultural ethic that should function like any other process that reaches across an organization. It is a risk-intelligent framework that brings a sense of shared responsibility to all employees. There is broad agreement at the regulator level about BSA/AML compliance and their vision of shared responsibility for compliance across each of our organizations. A simple way to ensure your credit union is cultivating a culture of compliance is by adhering to the minimum annual training requirements set forth by regulators. Let’s take a quick look at what they have to say to ensure your credit union is meeting such requirements, but more importantly creating a positive culture of compliance at your credit union.  

“It is my hope that financial institutions learn from what has happened in the JP Morgan-Madoff case in which JP Morgan failed to report the Madoff ponzie scheme to FinCEN thus violating the Bank Secrecy Act. Financial institutions need to pay close attention to their AML programs, promote a culture of compliance, and file SARs when suspicions arise.  As a result, not only will they protect their institution’s bottom line, but they could potentially protect untold numbers of innocent people from falling victim to a similar devastating fraud.”

Jennifer Shasky-Calvery
Director, Financial Crimes Enforcement Network (FinCEN)
United States Department of Treasury
January 07, 2014

Regulatory direction on BSA/AML training

When the federal and state-level financial institution examiners agree upon a principal, standard, or form of review, they issue documentation and guidance from the Federal Financial Institutions Examination Council (FFIEC)1. In the case of Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance, the documentation and guidance is found in the FFIEC BSA/AML Examination Manual2. The Manual sets forth the minimum requirements for a BSA/AML Compliance Program, and these minimum requirements consist of “four pillars” or “four tenets.”  Two of the four pillars address training, which underscores how important it is for credit unions to have skilled and proficient compliance staff. And, with the 2002 passage of the USA Patriot Act, sections of the Bank Secrecy Act were amended specifying that all financial institutions must also have an ongoing training program for anti-money laundering and terrorist financing.

Compliance Officer designation and training

The first BSA/AML program tenet addresses the designation of a BSA Compliance Officer(s), who is responsible for managing a credit union’s BSA compliance. Recent federal enforcement actions tell us it is not enough to simply designate this Officer, but to ensure the person filling the position is fully knowledgeable of BSA and related regulations, and is delegated with the authority and resources necessary to fulfill the responsibilities. The Manual also tells us the BSA Compliance Officer must obtain periodic training that is relevant and appropriate to your credit union. The training must address changes to regulations and requirements, along with training consistent with the changing risk profile of your credit union. Your credit union must demonstrate an ongoing commitment toward additional and comprehensive training for this individual, as well as for any BSA compliance support staff. And, let there be no doubt the NCUA takes this seriously. In September 2013 the NCUA issued a Cease and Desist Order to North Dade Community Development FCU requiring, among other things, the credit union to hire a BSA Compliance Officer with knowledge, expertise, delegated authority, and resources necessary to fulfill the duties within 30 days.

Training for “appropriate” personnel

The other tenet addressing training requires training for “appropriate” personnel.  While not defining “appropriate,” the Manual does tell us personnel whose duties require BSA knowledge must be included, that the training be tailored to job-specific duties, and that new staff be given BSA training as part of their new employee orientation.  This suggests that branch personnel, operations staff, and their managers and supervisors are among those requiring specific training.  Staff should be able to leave training knowing how BSA/AML regulations, policies, procedures, and processes affect their job duties.  The training is required annually, as well.

Compliance starts and ends at the top of an organization.  As you know, the board and the senior management team must demonstrate a commitment to BSA/AML compliance. Without adequate knowledge of the importance of BSA/AML requirements, the ramifications of non-compliance, and the risks posed to your credit union, your board cannot provide effective oversight of the credit union’s BSA/AML Program, approve BSA/AML policies, procedures, and processes, and provide sufficient BSA/AML resources to ensure compliance. 

Corporate One annual BSA/AML training

Corporate One, as your corporate partner, continues to seek opportunities to provide value to the credit unions we serve. Namely, we are pleased to again offer comprehensive and authoritative BSA/AML training for our members. We encourage you to join us for a two-day webinar on May 28-May 29, 2014. This training is designed to meet the Manual’s guidance for training credit union BSA/AML Compliance Officers, as well as managing officers, CEOs, branch officers, teller managers, operations managers, trainers, and members of boards of directors and supervisory committees, all at a nominal fee.  Further, we provide flexible options.  In addition to or in lieu of the live webinar, a copy of the recorded webinar and the supporting printed materials can be purchased, adding this vital information to the resource library at your credit union.

1The Council is comprised of representatives of the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB). In 2006, the State Liaison Committee (SLC) was added to the Council as a voting member. The SLC includes representatives from the Conference of State Bank Supervisors (CSBS), the American Council of State Savings Supervisors (ACSSS), and the National Association of State Credit Union Supervisors (NASCUS).

2 https://www.ffiec.gov/bsa_aml_infobase/documents/BSA_AML_Man_2010.pdf