FORT LAUDERDALE, Fla. (11/18/15)--Cash-intensive businesses mean an extra layer of risk for credit unions, due to the ease in which criminals can use them to launder illicit gains. During the CUNA/National Association of State Credit Union Supervisors Bank Secrecy Act (BSA) Conference this week, attorney David Reed broke down the challenges that come along with serving these businesses.
“The nature of cash-intensive businesses and the difficulty in identifying unusual activity may cause these businesses to be considered higher risk,” Reed said. “So you have to know your risks. You have to identify them, quantify them and deal with them, all while documenting everything.”
Cash-intensive businesses can range from convenience stores to vending machine operators to privately owned ATMs, as well as things like farmers markets and flea markets.
Reed said that credit unions need to ensure their BSA programs include:
“At the time of account opening the credit union should have an understanding of the member’s business operations, the intended use of the account, including anticipated transaction volume, products and services used and the geographic locations involved in the relationship,” Reed said. “Without a comprehensive risk analysis of its business, it is highly unlikely that a credit union can design an effective program well suited to manage the risks of that particular institution.”
Red flags can include:
(Editor’s note: For more coverage of CUNA’s BSA Compliance Conference, see the following stories in today’s issue: BSA Conference: Trafficking survivor hails compliance staff ‘crime fighters;’ BSA Conference: Prepaid cards, mobile wallet use growing fast; BSA Conference: Gold, virtual currency, nonprofit abuse trending worldwide.)