The Experts below are selected from a list of 363 Experts worldwide ranked by ideXlab platform
Steve Cocheo - One of the best experts on this subject based on the ideXlab platform.
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Up-Front Due Diligence Detects Risks before Committing: Best Due-Diligence Tools Walk into Prospect's Place of Business
ABA Banking Journal, 2010Co-Authors: Steve CocheoAbstract:[ILLUSTRATION OMITTED] She may not Actually bring a pair of white gloves along, but when Elizabeth Snyder visits a new Banking prospect, she brings common sense to the inspection. Case in point: a new would-be customer that claims to be in the grocery business. "If they say they're a grocery store, I want to see groceries in the aisle, and not with dust on them," says Snyder. Anything that looks out of place, or anything that looks too unused, or anything at all that doesn't synch with the kind of business that the potential customer claims to be in is a signal to Snyder that the Bank must stop and evaluate. The Bank may decide to take a walk. That's why Snyder, senior vice-president and chief compliance officer at $676.8 million-assets Leaders Bank, believes site visits must play a part in the Oak Brook, Ill., Bank's enhanced due diligence efforts for Bank Secrecy Act/Anti-Money-Laundering compliance. "Certain businesses require a site review even before we can consider taking them on as a customer," explains Snyder. Check first, then sign up A key element to Leaders Bank's enhanced due diligence process is the belief that no prospect should begin doing business with the Bank until they've been vetted. Not all Banks take this view, some determining that the due diligence can take place once the customer is on board. Snyder, speaking late last year at the Money Laundering Enforcement Conference sponsored by ABA and the American Bar Association, said that Leaders' management believes otherwise. "We decided that we had to determine risk at account opening," said Snyder. "We felt that if you waited a couple of days, you'd start to run into problems. Now you'd have a loan that's been booked, or an account relationship that's been established, and then if your BSA officer recommends revisiting some of that, it begins to get complicated." Due diligence for customer review consists of two levels, according to the regulators. The basic level is customer due diligence, the series of policies, procedures, and processes that all customers face that begins with verification of customer identity and an assessment of the risks that appear to be associated with that customer. For customers that pose increased risk, regulators call for enhanced due diligence to build a better understanding of the flow and type of business, and to implement appropriate suspicious Activity monitoring. Basics of the process The business Bank's Financial Intelligence Unit, also headed by Snyder, oversees the diligence process. As part of the effort, Snyder or a lieutenant sit in on meetings with commercial staff to learn of new relationships coming up for review. The relationship manager, working with the prospective customer, begins the drill by completing a questionnaire appropriate to the type of business. …
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Put Your BSA/AML Program into Shape: Better BSA Exams Start by Giving Your Existing Program a Tough Once-Over
ABA Banking Journal, 2008Co-Authors: Steve CocheoAbstract:How seriously does your Bank's workforce take Bank Secrecy Act and anti-money-laundering duties? As an indicator of the compliance atmosphere in your shop, when was the last time one of your employees failed a Bank Secrecy Act test? Not a real-life test, such as someone attempting to structure deposits. But rather, when was the last time a new employee, or an experienced employee receiving refresher training, failed one of the Bank's own BSA/AML quizzes? Chances are, suggested Brian J. Wimpling, everyone who takes your Bank's tests passes. While this may send employees back to the front lines with some confidence in their ability to detect potential laundering or terrorist Activity, it should give a compliance officer pause, said the former law enforcement agent who is currently senior vice-president, BSA Department for $2.6 billion-assets Capital City Bank, Tallahassee, Fla. Is the Bank's training so ironclad and foolproof that everyone is passing simply because they really know all about this arcane area absolutely cold? asked Wimpling. Or, more typically, was the test pitched to produce passing grades? Hold them accountable "You've got to think of what your Bank is trying to accomplish" with its training, Wimpling told listeners at the ABA Regulatory Compliance Conference earlier this year. If everyone is passing with flying colors, the Bank may not be testing them hard enough. In the end, it may not be training them hard enough. What caused Wimpling to begin thinking this way was a personal review of the last 30 major government enforcement Actions dealing with BSA/AML problems. He said he noted that lack of adequate training surfaced in every one of the cases. Training, whether for staff, officers, or directors, is only a piece of a Bank's BSA/AML compliance effort, said Wimpling, but it's a major piece. He believes that it must be backed up to protect the Bank from gaps that may be there from the start, or that develop over time. One means of providing that backup is to show employees where in their organization they can find additional help and answers when confronted with BSA/AML challenges. Another is to backstop employees in high-turnover positions, such as the teller line, with automation that can make up for areas where they lack sufficient prActical experience or didn't "get it" when they received their training. Wimpling's fellow panelist Anna M. Rentschler suggested that employees ought to be held accountable for poor compliance performance. "If you are going to have the carrot, you have to have the stick," said Rentschler, vice-president and BSA officer, at Central Bancompany, an $8.5 billion-assets, 13-Bank holding company headquartered in Jefferson City, Mo. She suggested that customer service representatives who earn sales incentives should be denied that extra pay if their compliance record is poor. Rentschler said they shouldn't be rewarded if the compliance department must later "clean up their messes." Taking a fresh, hard look at the Bank's BSA/AML program, and Acting on the answers to the questions asked and answered, was the theme of a conference session that Wimpling and Rentschler presented. They were joined by Dan D. Soto, compliance managing director for anti-money-laundering and Bank Secrecy Act compliance, at Wachovia, Charlotte, N.C. The trio's theme was "AML Program Tuneup." Does what you have work? Rentschler pointed out that one of the basics of BSA compliance is whether the Bank's program fits its situation, in terms of client base, market conditions, and local knowledge. In small towns, she noted, where everyone knows everyone, there is a natural awareness of what's going on in town--and who's going through town--that staffs at larger institutions don't enjoy. On the other hand, she pointed out that sometimes smaller communities are surprised to find out that they have a drug problem and the corresponding money laundering challenges attached. …
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BSA/AML Troubles: Fixing Them, Finding Them, Foregoing Them
ABA Banking Journal, 2007Co-Authors: Steve CocheoAbstract:Headlines concerning penalties and public enforcement agreements notwithstanding, Bank Secrecy Act/Anti-Money-Laundering debacles remain relatively rare in the Banking industry. Indeed, 98% of financial institutions don't have any significant enforcement problem. So says Daniel P. Stipano, deputy chief counsel, Comptroller of the Currency. The key, of course, is staying out of that unhappy 2%, by appropriately responding through the exam process and between exams, or, even better, by getting things right before the examiners ever come into the Bank. Comments from Stipano and others at last fall's Money Laundering Enforcement Conference, sponsored by ABA and the American Bar Association, can help, especially advice from representatives of Banks that got into BSA trouble. When you're in deep already "We're looking for a pretty serious, systemic breakdown before the mandatory cease-and-desist order requirements kick in," Stipano told listeners. Elaborating, he stressed that a Bank must generally have made significant mistakes over time before formal enforcement Actions will be used to correct a situation. For example, OCC Bulletin 2004-50, which describes the standards in more detail, underscores that unlike other examination issues, failure to establish and maintain a BSA compliance program requires issuance of a cease-and-desist order. Likewise, a CD the bulletin points out that "even when the fActs do not support citation of a BSA compliance program violation, the OCC may take a formal or informal enforcement Action to secure corrective Action." If, because of the instincts of the examiner on the ground, OCC decides to go to the next step and formally cite a BSA violation, things go beyond the judgment of a single individual. Stipano explained that an OCC intraagency committee reviews the decision. Stipano urged listeners to communicate and address examiner concerns as much as possible in an exam and its aftermath before a BSA matter became elevated to the committee's level. If that committee believes a citation is warranted (the Bank is given the opportunity to respond to the examiner's allegations during the review process) then another body takes it up. Stipano described this group--the Washington Surpervision Review Committee--as "kind of a charging body in the regulatory arena," that is, the ones who penultimately determines if a Bank's alleged missteps will be cited. (For community Banks, an intermediate, OCC district-level supervision review committee comes between these stages, and the district deputy comptroller must concur in the decision.) If the Washington committee agrees that a violation should be cited, then the ultimate call is made by the senior deputy comptroller responsible for the type of Bank involved. After that point, assuming a violation is to be cited, the Bank is sent notice of the decision as well as the proposed enforcement Action. The latter is finalized with the Bank's representatives, and, the Financial Crimes Enforcement Network becomes involved if the violation has reached the level of civil penalties. Stipano warned that once a problem has triggered formal enforcement, the Bank has lost most of its ability to bargain and discuss. "You're not going to be successful negotiating the terms of these documents," said Stipano. He said that regulators' enforcement attorneys don't cut deals that way. …
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BSA Exam Procedures Bring Uniformity ... but at a Price; Some Fear Flexibility, Sacrificed on the Altars of Uniformity and Certainty, Will Be Missed, but Crave More Guidance in Some Areas. Even with Mixed Reviews, the 300-Page Tome Is the New S.O.P f
ABA Banking Journal, 2005Co-Authors: Steve CocheoAbstract:To say that the interagency anti-money-laundering and Bank Secrecy Act examination procedures published this summer were long-awaited is putting it mildly. For months beforehand, whenever questions about how to handle this or that aspect of this heavy BSA compliance challenge came up, the answer inevitably included a reminder along the lines of "the upcoming interagency exam guidelines will clear a lot of this up." And finally they arrived. On June 30, the regulators delivered the exam procedures, as promised, and said they would begin using them in earnest in the third quarter. Over the remainder of the summer, they ran an extensive outreach program to educate Bankers about the procedures, incorporating both webinars and live meetings around the country. The sessions typically included presentations by regulators as well as segments on performing BSA risk assessments, presented by Bankers. In recent compliance history, the handing down of the procedures--300-plus pages, as published--stood out. The compliance fraternity consists, of course, of paper junkies, but many other portions of the industry also wanted to see what the united regulators had wrought. Calls for consistency in BSA examination policy and procedures, and more clarification of Banks' AML/BSA duties, had come not only from the trenches, but also from the executive suite. Top management saw too much time and expense given over to regulatory uncertainty, and too many threats coming from examiners who they felt were reading from their own, sometimes possibly impromptu, rulebooks. Thus, when the procedures were unveiled, ABA was rather upbeat. "This long-awaited guidance could not have come too soon," the association stated. "While ABA will continue to monitor the experiences of our members under these new procedures, we are optimistic that our [Banks' and the regulators'] joint efforts will be successful." In the outreach sessions they sponsored, representatives of the regulatory agencies often spoke about the new interagency procedures as if they didn't quite believe that they could have found so much common ground with their fellow bureaucrats. On the other hand, more than one Banker among those we interviewed complained that the regulators should have spent less time patting each other on the back, and more time answering Bankers' questions. Strong beginning, but still a beginning Plenty of questions are out there, based on talks with Bankers and compliance consultants, ranging from "Do you really expect a smaller Bank to be able to screen for politically exposed persons the way a megaBank can without providing software?" to "What do you want our risk assessment document to look like?" It is fair to say that the procedures, in their length, depth, scope, and structure, far exceeded what many Bankers were expecting. "A lot of people saw this as a new set of commandments," says Charles Grice, director, anti-money laundering and financial services, Kroll Inc., risk control consultants. "However," continues Grice, "they expected ten commandments. Instead, they got 300. This is heaven to consultants and advisors, and if you are a compliance officer, you now have 300-plus pages of additional job description." Nevertheless, the publication of the exam procedures has not only leveled the playing field for Banks regulated by different agencies, but also restored some balance to the examiner Bank relationship. Compliance consultant Lucy Griffin believes that the procedures, while admittedly lengthy and detailed, "can be a tool for managing an examiner who is out of line." Many little holes in the BSA canon have been filled in by the procedures, experienced observers say. For instance, it has become much clearer what kind of training a Bank is expected to provide in these matters and to whom it is expected to provide it, according to consultant Nancy Castiglione, D. …
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bsa exam procedures bring uniformity but at a price some fear flexibility sacrificed on the altars of uniformity and certainty will be missed but crave more guidance in some areas even with mixed reviews the 300 page tome is the new s o p for Bank se
ABA Banking Journal, 2005Co-Authors: Steve CocheoAbstract:To say that the interagency anti-money-laundering and Bank Secrecy Act examination procedures published this summer were long-awaited is putting it mildly. For months beforehand, whenever questions about how to handle this or that aspect of this heavy BSA compliance challenge came up, the answer inevitably included a reminder along the lines of "the upcoming interagency exam guidelines will clear a lot of this up." And finally they arrived. On June 30, the regulators delivered the exam procedures, as promised, and said they would begin using them in earnest in the third quarter. Over the remainder of the summer, they ran an extensive outreach program to educate Bankers about the procedures, incorporating both webinars and live meetings around the country. The sessions typically included presentations by regulators as well as segments on performing BSA risk assessments, presented by Bankers. In recent compliance history, the handing down of the procedures--300-plus pages, as published--stood out. The compliance fraternity consists, of course, of paper junkies, but many other portions of the industry also wanted to see what the united regulators had wrought. Calls for consistency in BSA examination policy and procedures, and more clarification of Banks' AML/BSA duties, had come not only from the trenches, but also from the executive suite. Top management saw too much time and expense given over to regulatory uncertainty, and too many threats coming from examiners who they felt were reading from their own, sometimes possibly impromptu, rulebooks. Thus, when the procedures were unveiled, ABA was rather upbeat. "This long-awaited guidance could not have come too soon," the association stated. "While ABA will continue to monitor the experiences of our members under these new procedures, we are optimistic that our [Banks' and the regulators'] joint efforts will be successful." In the outreach sessions they sponsored, representatives of the regulatory agencies often spoke about the new interagency procedures as if they didn't quite believe that they could have found so much common ground with their fellow bureaucrats. On the other hand, more than one Banker among those we interviewed complained that the regulators should have spent less time patting each other on the back, and more time answering Bankers' questions. Strong beginning, but still a beginning Plenty of questions are out there, based on talks with Bankers and compliance consultants, ranging from "Do you really expect a smaller Bank to be able to screen for politically exposed persons the way a megaBank can without providing software?" to "What do you want our risk assessment document to look like?" It is fair to say that the procedures, in their length, depth, scope, and structure, far exceeded what many Bankers were expecting. "A lot of people saw this as a new set of commandments," says Charles Grice, director, anti-money laundering and financial services, Kroll Inc., risk control consultants. "However," continues Grice, "they expected ten commandments. Instead, they got 300. This is heaven to consultants and advisors, and if you are a compliance officer, you now have 300-plus pages of additional job description." Nevertheless, the publication of the exam procedures has not only leveled the playing field for Banks regulated by different agencies, but also restored some balance to the examiner Bank relationship. Compliance consultant Lucy Griffin believes that the procedures, while admittedly lengthy and detailed, "can be a tool for managing an examiner who is out of line." Many little holes in the BSA canon have been filled in by the procedures, experienced observers say. For instance, it has become much clearer what kind of training a Bank is expected to provide in these matters and to whom it is expected to provide it, according to consultant Nancy Castiglione, D. …
Elizabeth A Cheney - One of the best experts on this subject based on the ideXlab platform.
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leaving no loopholes for terrorist financing the implementation of the usa patriot Act in the real estate field
Vanderbilt Law Review, 2005Co-Authors: Elizabeth A CheneyAbstract:I. INTRODUCTION September 11, 2001 began like any other day but took a drastic turn at 8:45 a.m. Eastern Daylight Time when a plane, hijacked by terrorists, crashed into the northern tower of the World Trade Center, setting it afire.1 As Americans mourned in silence, a second plane rammed through the southern tower of the World Trade Center at 9:05 a.m. and set it aflame.2 The horror continued, as a third plane crashed into the Pentagon, a fourth diverted into a field in Pennsylvania, and both towers of the World Trade Center collapsed.3 It did not take long for Americans to realize they had been attacked on their own soil by an impervious enemy - terrorists.4 This kind of attack was unprecedented in U.S. history, and the death toll reached nearly 3,000 within a few hours.5 President George W. Bush addressed the nation on the night of September 11, stating: Terrorist Acts can shake the foundations of our biggest buildings, but they cannot touch the foundation of America. These Acts shatter steel but they cannot dent the steel of American resolve. . .Today, our nation saw evil, the very worst of human nature, and we responded with the best of America. Americans quickly determined that not only had terrorists attacked on U.S. soil, but also that terrorists had taken advantage of the U.S. financial system to fund the horrific events of September 11.7 Government officials suspected that the terrorists laundered money through Banks in the United States and abroad, and through other highly valuable assets, including real estate.8 Consequently, not only did the events of September 11 leave an indelible mark in the hearts and minds of Americans, but these events dramatically changed the country's economy, government, industry, and politics. One area of the economy remained stable despite the tragic events of September 11: real estate. It remains to be seen, however, whether this sector of the U.S. economy will escape the consequences of the tragedy. On October 26, 2001, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act ("Patriot Act") was signed into law.9 The stated purpose of the law was "to deter and punish terrorist Acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes."10 Towards that end, the Patriot Act enhanced the requirements of the Bank Secrecy Act to eliminate money laundering as Congress determined that money laundering had partially funded the terrorist Activities.11 Included in the Bank Secrecy Act's definition of financial institutions, adopted by the Patriot Act, were "persons involved in real estate closings and settlements."12 The Bank Secrecy Act required the creation of a paper trail of important financial records when a transAction involved large amounts of currency to further its goal of "protect[ing] against international terrorism."13 The Patriot Act expanded these existing reporting requirements and strengthened communication among the reporting entities.14 The Act also empowered the Treasury Department to determine the extent to which it would regulate certain financial institutions under the Patriot Act. The Department, however, has yet to render a decision regarding the real estate sector.15 Implementation of the Patriot Act in the real estate industry, particularly on lawyers in the field, presents a unique question of how to balance the protection of attorney-client communications against the need to reduce terrorist financing Activities. Real estate professionals generally support combating money laundering but are hesitant to impose stringent measures on the field because of a variety of concerns.16 Part II of this Note analyzes the background behind the Patriot Act, other counter-terrorism laws, and money laundering laws. Part III discusses several hurdles in the effort to implement the law and examines different ways the real estate sector can contribute to the war on terror. …
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Leaving No Loopholes for Terrorist Financing: The Implementation of the USA PATRIOT Act in the Real Estate Field
Vanderbilt Law Review, 2005Co-Authors: Elizabeth A CheneyAbstract:I. INTRODUCTION September 11, 2001 began like any other day but took a drastic turn at 8:45 a.m. Eastern Daylight Time when a plane, hijacked by terrorists, crashed into the northern tower of the World Trade Center, setting it afire.1 As Americans mourned in silence, a second plane rammed through the southern tower of the World Trade Center at 9:05 a.m. and set it aflame.2 The horror continued, as a third plane crashed into the Pentagon, a fourth diverted into a field in Pennsylvania, and both towers of the World Trade Center collapsed.3 It did not take long for Americans to realize they had been attacked on their own soil by an impervious enemy - terrorists.4 This kind of attack was unprecedented in U.S. history, and the death toll reached nearly 3,000 within a few hours.5 President George W. Bush addressed the nation on the night of September 11, stating: Terrorist Acts can shake the foundations of our biggest buildings, but they cannot touch the foundation of America. These Acts shatter steel but they cannot dent the steel of American resolve. . .Today, our nation saw evil, the very worst of human nature, and we responded with the best of America. Americans quickly determined that not only had terrorists attacked on U.S. soil, but also that terrorists had taken advantage of the U.S. financial system to fund the horrific events of September 11.7 Government officials suspected that the terrorists laundered money through Banks in the United States and abroad, and through other highly valuable assets, including real estate.8 Consequently, not only did the events of September 11 leave an indelible mark in the hearts and minds of Americans, but these events dramatically changed the country's economy, government, industry, and politics. One area of the economy remained stable despite the tragic events of September 11: real estate. It remains to be seen, however, whether this sector of the U.S. economy will escape the consequences of the tragedy. On October 26, 2001, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act ("Patriot Act") was signed into law.9 The stated purpose of the law was "to deter and punish terrorist Acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes."10 Towards that end, the Patriot Act enhanced the requirements of the Bank Secrecy Act to eliminate money laundering as Congress determined that money laundering had partially funded the terrorist Activities.11 Included in the Bank Secrecy Act's definition of financial institutions, adopted by the Patriot Act, were "persons involved in real estate closings and settlements."12 The Bank Secrecy Act required the creation of a paper trail of important financial records when a transAction involved large amounts of currency to further its goal of "protect[ing] against international terrorism."13 The Patriot Act expanded these existing reporting requirements and strengthened communication among the reporting entities.14 The Act also empowered the Treasury Department to determine the extent to which it would regulate certain financial institutions under the Patriot Act. The Department, however, has yet to render a decision regarding the real estate sector.15 Implementation of the Patriot Act in the real estate industry, particularly on lawyers in the field, presents a unique question of how to balance the protection of attorney-client communications against the need to reduce terrorist financing Activities. Real estate professionals generally support combating money laundering but are hesitant to impose stringent measures on the field because of a variety of concerns.16 Part II of this Note analyzes the background behind the Patriot Act, other counter-terrorism laws, and money laundering laws. Part III discusses several hurdles in the effort to implement the law and examines different ways the real estate sector can contribute to the war on terror. …
United States. Government Accountability Office. - One of the best experts on this subject based on the ideXlab platform.
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Bank Secrecy Act: FinCEN Needs to Further Develop Its Form Revision Process for Suspicious Activity Reports
United States. Government Accountability Office., 2010Co-Authors: United States. Government Accountability Office.Abstract:Testimony issued by the Government Accountability Office with an abstrAct that begins "To assist law enforcement agencies in their efforts to combat money laundering, terrorist financing, and other financial crimes, the Bank Secrecy Act (BSA) requires financial institutions to file suspicious Activity reports (SAR) to inform the federal government of transActions related to possible violations of law or regulation. Depository institutions have been concerned about the resources required to file SARs and the extent to which SARs are used. The Subcommittee asked GAO to discuss our February 2009 report on suspicious Activity reporting. Specifically, this testimony discusses (1) fActors affecting the number of SARs filed, (2) Actions agencies have taken to improve the usefulness of SARs, (3) federal agencies' use of SARs, and (4) the effectiveness of the process used to revise SAR forms. To respond to the request, GAO relied primarily on the February 2009 report titled Bank Secrecy Act: Suspicious Activity Report Use Is Increasing, but FinCEN Needs to Further Develop and Document Its Form Revision Process (GAO-09-226), and updated it with additional information provided by FinCEN. In that report, GAO recommended that FinCEN work to further develop a strategy that fully incorporates certain GAO-identified prActices to enhance and sustain collaboration among federal agencies into the forms-change process.
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Bank Secrecy Act: Suspicious Activity Report Use Is Increasing, but FinCEN Needs to Further Develop and Document Its Form Revision Process
United States. Government Accountability Office., 2009Co-Authors: United States. Government Accountability Office.Abstract:A letter report issued by the Government Accountability Office with an abstrAct that begins "To assist law enforcement agencies in their efforts to combat money laundering, terrorist financing, and other financial crimes, the Bank Secrecy Act (BSA) requires financial institutions to file suspicious Activity reports (SAR) to inform the federal government of transActions related to possible violations of law or regulation. Depository institutions have been concerned about the resources required to file SARs and the extent to which SARs are used. GAO was asked to examine (1) fActors affecting the number of SARs filed, (2) Actions agencies have taken to improve the usefulness of SARs, (3) federal agencies' use of SARs, and (4) the effectiveness of the process used to revise SAR forms. GAO reviewed laws and agency documents; analyzed SAR filings; and interviewed representatives from the Financial Crimes Enforcement Network (FinCEN), law enforcement agencies, Bank regulators, and depository institutions.
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Bank Secrecy Act: Federal Agencies Should Take Action to Further Improve Coordination and Information-Sharing Efforts
United States. Government Accountability Office., 2009Co-Authors: United States. Government Accountability Office.Abstract:A letter report issued by the Government Accountability Office with an abstrAct that begins "The legislative framework for combating money laundering began with the Bank Secrecy Act (BSA) in 1970 and most recently expanded in 2001with the USA PATRIOT Act. The Financial Crimes Enforcement Network (FinCEN) administers BSA and relies on multiple federal and state agencies to ensure financial institution compliance. GAO was asked to (1) describe how BSA compliance and enforcement responsibilities are distributed, (2) describe how agencies other than FinCEN are implementing those responsibilities and evaluate their coordination efforts, and (3) evaluate how FinCEN is implementing its BSA responsibilities. Among other things, GAO reviewed legislation, past GAO and Treasury reports, and agreements and guidance from all relevant agencies; and interviewed agency, association, and financial institution officials.
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Information Security: Further Actions Needed to Address Risks to Bank Secrecy Act Data
United States. Government Accountability Office., 2009Co-Authors: United States. Government Accountability Office.Abstract:A letter report issued by the Government Accountability Office with an abstrAct that begins "The Financial Crimes Enforcement Network (FinCEN), a bureau within the Department of the Treasury, relies extensively on its own computer systems, as well as those at the Internal Revenue Service (IRS) and the Treasury Communications System (TCS), to administer the Bank Secrecy Act (BSA) and fulfill its mission of safeguarding the U.S. financial system from financial crimes. Effective information security controls over these systems are essential to ensuring that BSA data, which contains sensitive financial information used by law enforcement agencies to prosecute financial crime, is protected from inappropriate or deliberate misuse, improper disclosure, or destruction. GAO evaluated whether security controls that effectively protect the confidentiality, integrity, and availability of the information and systems that support FinCEN's mission have been implemented. To do this, GAO examined security policies and controls for systems at three organizations.
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Bank Secrecy Act: Increased Use of Exemption Provisions Could Reduce Currency TransAction Reporting While Maintaining Usefulness to Law Enforcement Efforts
United States. Government Accountability Office., 2008Co-Authors: United States. Government Accountability Office.Abstract:A letter report issued by the Government Accountability Office with an abstrAct that begins "To aid law enforcement efforts against financial crimes, under the Bank Secrecy Act (BSA) depository institutions must file the Treasury Department's Financial Crimes Enforcement Network's (FinCEN) currency transAction report (CTR) form on their customers' cash transActions of more than $10,000. While FinCEN's regulations allow institutions to exempt certain customers, over 15 million CTRs were filed in 2006. Public Law 109-351 directed GAO to report on (1) the usefulness of CTRs to law enforcement; (2) depository institutions' costs of meeting CTR requirements; and (3) ways to encourage use of exemptions to avoid unnecessary CTRs. Among other things, GAO obtained data from FinCEN on CTRs and exemptions from 2004 to 2006, surveyed 115 state and local law enforcement agencies and 680 depository institutions, held structured interviews with officials of federal agencies and depository institutions, and reviewed relevant laws and regulations.
P. Carl Mullan - One of the best experts on this subject based on the ideXlab platform.
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New FinCEN Rules
A History of Digital Currency in the United States, 2016Co-Authors: P. Carl MullanAbstract:In July 2011, the Financial Crimes Enforcement Network (FinCEN) issued two final rules that amended Bank Secrecy Act Regulations and directly affected digital currency businesses operating in the USA. The “Prepaid Access Rule”—Definitions and Other Regulations Relating to Prepaid Access—amended the money services businesses (MSBs) rules and established a more comprehensive regulatory approach for prepaid access formerly known as “stored value.” This new rule moved most digital currency companies into the new Prepaid Access category of regulated financial products. The “MSB Rule”—Definitions and Other Regulations Relating to Money Services Businesses—more clearly defines operations which qualify as MSBs. This rule also compelled foreign-located digital currency companies engaged with US customers to comply with US regulations or withdraw from the American market.
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FIN-2013-G001
The Digital Currency Challenge, 2014Co-Authors: P. Carl MullanAbstract:On March 18, 2013, the Financial Crimes Enforcement Network issued interpretive guidance clarifying the applicability of the regulations implementing the Bank Secrecy Act to persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies such as Bitcoin. The guidance explains only how FinCEN charActerizes certain Activities involving virtual currencies under the Bank Secrecy Act and FinCEN regulations. Under FinCEN’s rules a Bitcoin miner may be an administrator. This guidance clarified that Bitcoin exchanges are considered money transmitters and are required to obtain all proper licenses to conduct business in the United States. This registration and licensing process includes the federal registration as a money service business.
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Follow the Money
The Digital Currency Challenge, 2014Co-Authors: P. Carl MullanAbstract:The US Treasury Department, through the Financial Crimes Enforcement Network, implements, administers, and enforces compliance with the Bank Secrecy Act and associated regulations. FinCEN creates the rules that monitor and regulate all US digital currency systems and related businesses. As defined by US law, almost all digital currency businesses are considered to be financial institutions. The Money Service Business Rule (MSB) places all digital currency systems in the category of Money Transmitter Service, and forces all exchange agents, third-party processing agents, and most Bitcoin miners into the category of Money Transmitter.
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Money Service Business
The Digital Currency Challenge, 2014Co-Authors: P. Carl MullanAbstract:On July 21, 2011, FinCEN issued a final rule clarifying money service business (MSB) definitions. It said that a money services business is a financial institution. Most digital currency businesses are MSBs. Once an entity falls into the category of a financial institution, there are numerous requirements which must be met for that entity to legally operate in the United States. MSB digital currency businesses are subject to anti-money laundering rules under the Bank Secrecy Act. This new rule also required all foreign-located MSBs engaged in US business to follow BSA regulations.
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Who Uses Digital Currency
The Digital Currency Challenge, 2014Co-Authors: P. Carl MullanAbstract:Successful commercial digital currency systems serve different groups of users. Popular systems are used by people in areas of the world lacking in traditional Bank products and services. In countries or regions of the world with large non-Bank populations, digital currency offers critical services and benefits for local users. Recent changes in US regulations including the MSB Rule and the Prepaid Access Rule have had a negative effect on all US digital currency business. These restrictions apply to both US-based firms, foreign-based companies, and foreign persons engaged in US business. Significant US regulations under the Bank Secrecy Act (BSA) have blocked digital currency systems and products from the American market.
Betty Santangelo - One of the best experts on this subject based on the ideXlab platform.
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FinCEN and regulators issue joint guidance on obtaining beneficial ownership information, potentially expanding certain financial institutions' USA PATRIOT Act obligations
Journal of Investment Compliance, 2010Co-Authors: Betty Santangelo, Amber StokesAbstract:Purpose – The purpose of this paper is to describe guidance (“the Guidance”) issued by the Financial Crimes Enforcement Network (“FinCEN”), the Federal Banking Regulators and the Securities and Exchange Commission on obtaining beneficial ownership information for certain accounts and customer relationships.Design/methodology/approach – The paper summarizes the principal content of the Guidance, including the importance of customer due diligence (CDD) policies as the cornerstone of a Bank Secrecy Act/Anti‐Money‐Laundering program, the need for a CDD program to identify and verify the beneficial owners of an account, steps that should be included in CDD procedures to protect against heightened risks related to the beneficial owners of an account, enhanced due diligence that is appropriate for accounts that pose heightened risk, the suggestion in the Guidance to implement CDD policies and procedures on an enterprise‐wide basis, and requirements for private Bank account and correspondent Bank account due dili...
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Ask not for whom the bell tolls, it may toll for you next: intensified anti‐money‐laundering enforcement transforms the regulatory landscape
Journal of Investment Compliance, 2005Co-Authors: Betty Santangelo, Margaret JacobsAbstract:Purpose – Discusses the most significant criminal prosecutions and regulatory Actions in response to recent anti‐money laundering compliance lapses and the resulting concern in the financial community.Design/methodology/approach – Reviews earlier criminal enforcement Actions; the recent prosecution of Riggs Bank; non‐criminal regulatory enforcement Actions toward Banco de Chile, Korea Exchange Bank, Arab Bank, and Gulf Corporation; additional consent orders and supervisory agreements requiring enhancement of PATRIOT Act and Bank Secrecy Act compliance systems at more than 20 Banks; broker‐dealer Actions; and other Actions.Findings – Concludes that both law enforcement and regulators have embraced stricter anti‐money‐laundering enforcement standards despite some criticism from the financial industry, and that recent criminal enforcement Actions bear careful analysis by the financial community; predicts that regulators and law enforcement officials will broaden their scope from Banking institutions to inclu...
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New PATRIOT Act deadlines approach for broker‐dealers: Customer identification programs to be implemented by October 1, 2003
Journal of Investment Compliance, 2003Co-Authors: Betty Santangelo, Margaret JacobsAbstract:The anti‐money‐laundering provisions of the USA Patriot Act of 2001 (the “Patriot Act”) continue to cause a profound transformation in the way the United States investment industry conducts its business. Over the past year under the authority of the Patriot Act, which amended the Bank Secrecy Act (“BSA”), the United States Department of Treasury (“Treasury”) and the relevant federal regulators have issued rules requiring a broad range of compliance mechanisms, including: the establishment of anti‐money‐laundering (“AML”) programs; the filing of suspicious Activity reports; the prohibition against providing financial services to foreign shell Banks (i.e., Banks without physical locations); the maintenance of records with respect to accounts for foreign Banks; and the sharing of transActional information among financial institutions and between financial institutions and law enforcement.
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How Safe Is the Bank Secrecy Act Safe Harbor
Journal of Investment Compliance, 2000Co-Authors: Betty Santangelo, Tim O'neal LorahAbstract:The blurring of the lines between Banks, insurance companies and broker‐dealers continues. As we go to press, yet another merger has been announced. The application of the Anti‐Money Laundering Act of 1992 to the securities industry becomes more and more obvious. This article explores the Act with particular attention to the safe harbor, which exists to encourage Banks (financial institutions) to report suspicious Activity while hopefully falling under the protection of the Act, so as not to be exposed to civil liability.
