While embracing the broad and increasingly complex array of payments options, credit unions also must attain and maintain Bank Secrecy Act (BSA) and antimoney laundering (AML) compliance regimens that cover emerging technology such as mobile payments.
Rayleen Pirnie, founder and owner of RP Payments Risk Consulting Services, LLC, and a nationally recognized payments risk and fraud expert, reinforced that message Monday at the CUNA Bank Secrecy Act Conference, held in partnership with the National Association of State Credit Union Supervisors.
“NCUA has a renewed vigor and focus on BSA/AML,” Pirnie says. “And it’s not just the NCUA, it’s the regulatory environment as a whole.”
For instance, the Consumer Financial Protection Bureau (CFPB) also closely monitors this area, and the bureau's interpretations fluctuate: “Know these interpretations,” Pirnie says.
The increased regulatory expectations take place against a backdrop of credit unions’ stretched staffs and stretched budgets, Pirnie notes. “But the cost of compliance is nothing compared to the cost of noncompliance,” she says.
Another reason mobile payments increase compliance challenges, according to Pirnie, is that “criminals are less likely to walk into your branch” and more likely to attempt to enter your system online.
She also warns that while credit unions might already feel the BSA/AML compliance heat, current events indicate the topic will only get hotter. “With the new administration” of President-elect Donald Trump, “changes might come in the next year.”
With New York boosting its BSA/AML requirements in January, other states likely will follow suit, according to Pirnie.
On another subject, Pirnie reports that identity theft has been the top fraud growth area for 15 years straight—claiming 13.1 million victims in 2015 alone. Pirnie’s research indicates that on the “Dark Web”—the black market for identity and stolen payments cards information—criminals can get paid:
Criminals don’t need to go underground or overseas to connect, Pirnie says—they also can go through Craigslist.