Keeping up with the Bank Secrecy Act (BSA requires a culture of compliance, attorney David Reed told attendees at the CUNA/National Association of State Credit Union Supervisors BSA Conference Monday. The phrase “culture of compliance” comes from a Financial Crimes Enforcement Network (FinCEN) advisory to U.S. financial institutions.

“The business side of the organization needs to support AML controls, and this needs to begin with leadership,” Reed said. “The board, management and owners and operators are all responsible for compliance with the BSA, and this commitment should be clearly visible.”

A credit union should have a board, appropriate committee or designated senior management employee:

• Assign specific responsibility for the BSA program’s implementation;
• Approve the initial program and changes and record in the board's minutes;

• Review annual reports regarding compliance; and

• Have staff responsible for BSA program report to the board

The BSA requires all financial institutions to monitor member behavior, file reports on transactions that meet certain dollar thresholds and maintain records of certain transaction. It assist law enforcement in uncovering criminal activities such as money laundering, drug trafficking, tax fraud and terrorist financing.

According to the FinCEN, 30,000 searches per day are conducted of BSA data by more than 10,000 individuals from more than 350 federal, state and local agencies. 

“We are here to provide information to law enforcement apparatus to help them do their jobs better. And if we fail to report information, that provides fewer tools for law enforcement to do their jobs,” Reed said. “They don’t want that, and we certainly don’t want that.”

Reed highlighted NCUA’s 2017 supervisory priorities, noting that BSA compliance came in second on its top emerging risks for the year. BSA compliance was the number-three issue noted in 2016.

While there is no required format for sharing suspicious activity report (SAR) information with the board, credit unions may use methods they think is best to summarize filed SARs.

Reed noted that it is not a best practice to share a copy of the actual SAR with the board. Credit unions must also remember SAR confidentiality if the report involves an insider.

He also recommended compliance officers assemble what he called “a scrapbook of pain,” when they come across publicized BSA compliance issues.

“Utilize what you read in various publications. If you see an entity hit because of a potential problem in BSA enforcement, consider copying it and sharing it,” he said.