A statement intended to clarify and provide transparency on how regulators evaluate enforcement actions required by law in response to Bank Secrecy Act/anti-money laundering (BSA/AML) violations was issued jointly by federal bank and credit union regulators Thursday.
In their statement, the Federal Reserve, Federal Deposit Insurance Corp. (FDIC), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC) sought to clarify that isolated or technical violations or deficiencies “are generally not considered the kinds of problems that would result in an enforcement action,” according to a release.
The statement imposes no new requirements but updates and supersedes the Interagency Statement on Enforcement of BSA/AML Requirements issued on July 19, 2007, to promote a consistent approach to the application of Section 8(s) of the Federal Deposit Insurance Act and Section 206(q) of the Federal Credit Union Act, they stated.
Generally, they said the statement addresses how the agencies evaluate violations of individual components – “pillars” – of the BSA/AML compliance program; and describes how they incorporate customer due diligence (CDD) regulations and recordkeeping requirements issued by Treasury as part of the internal controls pillar of an institution’s BSA/AML compliance program.
The joint statement addresses how regulators will communicate supervisory concerns about BSA/AML compliance programs and specific ways they may enforce for noncompliance. Cease-and-desist orders, it notes, will be issued (“based on a careful review of all the relevant facts and circumstances”) when institutions fail to establish and maintain a reasonably designed BSA/AML compliance program or to correct previously reported problems with the BSA/AML compliance program. Other enforcement actions may also be taken in response to violations of a BSA/AML compliance program component or pillar deficiency; and for violations related to suspicious activity reporting (SAR) and other BSA reporting and recordkeeping requirements.
They said the Financial Crimes Enforcement Network (FinCEN), Treasury’s financial crimes enforcement unit, simultaneously issued a “Statement on Enforcement of the Bank Secrecy Act” that sets forth its approach to enforcement in circumstances of non-compliance with the BSA. (That statement, however, appeared not to have been published online as of press time).