On Sept 14 2020, the Financial Crimes Enforcement Network issued final rules that expand the anti-money laundering obligations of financial institutions under the Bank Secrecy Act.
Under the new rules, all banks that are non-FFR institutions will now be subject to essentially the same rules as apply to any FDIC regulated institution. (These are firms which lack a federal functional regulator such as the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), Board of Governors of the Federal Reserve System (FRB), or Securities & Exchange Commission (SEC).) That includes, but is not limited to, private banks, non-federally insured credit unions, and trust companies.
The final rule takes effect on November 16, after which firms have just 180 days to comply – taking us to May 15 2021.
So easy to summarise. Not so easy to prepare for.
Whatever the size of the union or the scale of its assets and customer base – and some are very sizeable indeed – the compliance challenge of so much weighty regulation hitting a community-focused ‘people before profit’ sector at speed is hard to overstate.
Part of the issue is knowing where to start. Compliance teams need to work through precisely how this affects existing customer identification programs and beneficial ownership structures and requirements.
- You’ll need to have the correct procedures to determine whether a new customer appears on any list of known or suspected terrorist organisations issued by the Federal government.
- You’ll need to prove you are maintaining a record of the identifying information obtained and the description of any document relied on of any non-documentary methods you use.
- You’ll also need to re-assess your client communications strategy and have the correct procedures in place for providing your customers with adequate notice that you are requesting information to verify their identities.
- And you don’t just need to plan and execute this; you also need to get it through your own internal processes, with a written anti-money laundering program under the specified minimum standards, approved by your institution’s Board of Directors or equivalent governing body.
It’s a significant logistic, technical, compliance and governance challenge. 180 days is not long to get it right.
Be prepared! Join our US Credit Union webinar on November 17 to find out more
As an expert in banking regulation, anti-money laundering and client lifecycle management, I’ll be discussing these issues and the most effective approach with fellow expert, Ben Marsh, CEO of iMeta Technologies Limited in a free session especially for US Credit Union compliance leads, on November 17 – the day after the clock starts ticking.
This will be a practical session, aimed at showing how you get from November to May in the best possible state of readiness. To ensure a lively discussion, places will be limited.
Save your place today: register here.
If you’d value specific advice, please feel free to contact us direct.
You can also discover more about Davies’s expertise in all aspects of financial crime and compliance, anti money laundering and client lifecycle management here
