Benefits, risks of FIs’ BSA-related resource sharing outlined in joint statement

Types of instances in which banks and credit unions may form collaborative arrangements to share resources to better manage their Bank Secrecy Act/anti-money laundering (BSA/AML) responsibilities are addressed in a statement issued jointly on Wednesday by financial institution regulators and Treasury’s financial crimes unit.

The statement – by the Federal Reserve Board, the Federal Deposit Insurance Corp. (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Financial Crimes Enforcement Network (FinCEN) – provides examples of functions that may be conducted utilizing shared resources. These might include: 1) reviewing, updating, and drafting BSA/AML policies and procedures; 2) reviewing and developing risk-based customer identification and account monitoring processes; and 3) tailoring monitoring systems and reports for the risks posed.

The joint statement is intended to highlight the potential benefits of collaborative arrangements that pool resources, such as staff, technology, or other resources, to increase operational efficiencies, reduce costs, and leverage specialized expertise; and outline risk considerations and mitigation measures associated with the use of collaborative arrangements.

“Collaborative arrangements as described in the statement generally are most suitable for financial institutions with a community focus, less complex operations, and lower-risk profiles for money laundering or terrorist financing,” the agencies said.

The statement “does not apply to collaborative arrangements or consortia formed for the purpose of sharing information under Section 314(b) of the USA PATRIOT Act,” they stated.

Additionally, the statement notes that each institution is ultimately responsible for ensuring its own compliance with BSA requirements: “Sharing resources in no way relieves a bank of this responsibility. Nothing in this interagency statement alters a bank’s existing legal and regulatory requirements.”

Banks and credit unions are also encouraged to contact their primary federal regulator with any questions about sharing BSA resources and to refer to “other relevant guidance,” it states.

Interagency Statement on Sharing Bank Secrecy Act Resources October 3, 2018