Underlying Deficiencies in BSA/AML Infractions

By Mark Lowers,

In March 2014, Thomas J. Curry, Comptroller of the Currency, spoke before the Association of Certified Anti-Money Laundering Specialists about the Bank Secrecy Act (BSA) and Anti-Money Laundering law (AML) compliance. While he generally spoke positively about the efforts of banking institutions to meet the requirements of the BSA, he was also quick to point out that most of the headlines surrounding banks and the BSA are negative.

In other words, the media will seek out banks that are not in compliance. As a result, the industry as a whole must do more.

Curry noted that BSA infractions can, “almost always be traced back to decisions and actions of the institution’s board and senior management.” The underlying deficiencies that lead to these poor decisions fall into four areas:

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Summarizing the OCC Risk Management Framework for Banks

By Mark Lowers,

The on-going regulatory response to the 2008 financial crisis includes the Office of the Comptroller of the Currency (OCC) Risk Management Guidance on third-party relationships, issued in October 2013. The bulletin states that the OCC expects a bank to practice effective risk management regardless of whether the bank performs the activity internally or through a third party.

“A bank’s use of third parties does not diminish the responsibility of its board of directors and senior management to ensure that the activity is performed in a safe and sound manner and in compliance with applicable laws.”

In a recent speech before the Risk Management Association, Thomas J. Curry, Comptroller of the Currency, emphasized the importance of managing the risks “associated with bank systems and processes” even above credit risk. He noted banks’ “increasing reliance on third parties” and the systemic risks they impose. … Continue reading