The Federal Financial Institutions Examination Council released updated guidance on compliance requirements of...
the Bank Secrecy Act. What is covered in this release, and what should my firm take away from these updates to help prepare for the 2015 regulatory exams?
The Bank Secrecy Act (BSA) of 1970 regulates the activities of financial institutions in an effort to curb money laundering activity. BSA requires banks to report transactions over $10,000 and any suspicious transactions to the federal government. The Federal Financial Institutions Examination Council (FFIEC) is charged with enforcing this act through a series of bank audits, called "examinations." In December 2014, the FFIEC released updated guidance on BSA implementation and will use that new guidance during its 2015 bank examinations.
Before diving into a few of the changes, it is important to note that the updated guidance runs over 400 pages. Organizations preparing for an FFIEC examination should review the entire document carefully, rather than relying upon any summary of changes.
Under the new guidance, banks must implement new controls around the Suspicious Activity Report (SAR) process. Notably, the manual updates requirements for electronic filing of SARs and implements privacy controls protecting the contents of SARs from unauthorized disclosure.
The manual also expands the scope of institutions required to submit reports to the Financial Crimes Enforcement Network. These concern the responsibilities of non-bank financial institutions, including money service businesses, prepaid access programs and virtual currency exchanges.
Other subjects receiving added attention in the 2014 update include foreign accounts, currency transaction reporting, bulk shipments of currency, automated clearinghouse transactions, third-party payment processors and accounts controlled by foreign embassies, consulates and missions. If your firm is involved in financial transactions, now is the time to carefully review the lengthy updated guidance and incorporate it into your 2015 bank examination preparation process.
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