In a recent blog I included a chart that showed the NCUA Supervisory Priorities from 2017 to 2021. One of the Priorities that is ever present is Bank Secrecy Act (BSA) Compliance. This will never change – it will always be in the Priority Letter.
Why?
Well first is the Importance of detecting, deterring and disrupting terrorist financing networks. Due to this importance, under the authority of the U.S. Congress and FinCEN, NCUA is required to enforce compliance with the Bank Secrecy Act.
It is one of the very few areas that NCUA cannot opt out of a review via the risk focused exams. It must be looked at.
For this blog, I compared the 2020 and 2021 NCUA Supervisory Letter on the Bank Secrecy Act.
The goal of my review was to highlight new language to show only what is newly highlighted in the letter of 2021, which is as follows:
Key accomplishments by the interagency working group since the last letter:
Issuing an August 2020 joint statement on BSA/AML enforcement,
Issuing an August 2020 joint statement on BSA Due Diligence Requirements for Customers Who May Be Considered Politically Exposed Persons,
Developing an October 2020 rulemaking on Exemptions from Customer Identification Program requirements for premium finance loans, and
Releasing a November 2020 joint fact sheet, which addressed BSA due diligence for charities and non-profits.
NCUA’s also made a commitment to communicate and collaborate with fellow regulators and credit unions on Increasing human trafficking awareness by providing information to credit unions and examiners. NCUA recently participated in a webinar on this important topic.
Of course the BSA language that did repeat from last year is also important… and below the line I provide the full text of NCUA’s BSA Guidance from the recent exam Priority Letter. *******************************************************************************************************
Bank Secrecy Act/Anti-Money Laundering Compliance
The NCUA will continue to conduct Bank Secrecy Act/Anti-Money Laundering (BSA/AML) reviews during every examination, and will take appropriate action when necessary to ensure credit unions meet their regulatory obligations.
The NCUA meets regularly with interagency partners to improve the transparency, efficiency, and effectiveness of BSA/AML regulation and supervision. Key accomplishments by the interagency working group include:
Updating FFIEC Bank Secrecy Act/Anti-Money Laundering Examination Manual
Issuing an August 2020 joint statement on BSA/AML enforcement,
Issuing an August 2020 joint statement on BSA Due Diligence Requirements for Customers Who May Be Considered Politically Exposed Persons,
Developing an October 2020 rulemaking on Exemptions from Customer Identification Program requirements for premium finance loans, and
Releasing a November 2020 joint fact sheet, which addressed BSA due diligence for charities and non-profits.
The NCUA will continue to communicate with credit unions and collaborate with other banking regulators and law enforcement on several initiatives, including:
Publishing additional updates to the FFIEC’s BSA/AML Examination Manual;3
Participating in interagency work-streams to define BSA/AML compliance program effectiveness;
Developing suggestions and clarifications to improve Suspicious Activity Report (SAR) and Currency Transaction Report (CTR) filings; and
Increasing human trafficking awareness by providing information to credit unions and examiners.
The NCUA will continue to focus on implementing appropriate customer due diligence and beneficial ownership procedures, proper filing of SARs and CTRs, and reviews of bi-weekly 314(a) information requests from FinCEN. Law enforcement, intelligence, and counterterrorism officials depend on timely and informative SARs and CTRs and prompt reporting of any 314(a) matches to identify and thwart money laundering, terrorist financing, and other illicit financial activities. Credit union efforts in this area help fight crime and keep America safe.
For additional resources, visit the NCUA’s Bank Secrecy Act Resources webpage.
For a link to the full letter click here:
https://www.ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/ncuas-2021-supervisory-priorities