Financial Update (Fourth Quarter 2005)


Jack Guynn on
Economic Growth,

Payment Services
Withstand Katrina’s

Pat Barron on the
Need to Improve
Payment Systems

Directo a México
Promotes FedACH

Introduces New
Bank Secrecy
Act Manual

Credit Cards’
Benefits Outweigh
Identity Theft

Go Direct Campaign
Encourages Direct

New HMDA Data
Include Loan Pricing

Redesigned $10 Bill
to Debut in ’06

Explores Latin
American Bank

Final CRA Rules
Take Effect

Revisions Proposed
to ATM Fee


Data Bank

Circular Letters



Live Webcast Briefs Examiners on Bank Secrecy Act Compliance

A new manual for financial institution examiners, published this summer by the federal banking and thrift agencies and the Financial Crimes Enforcement Network (FinCEN), provides guidance on the complex issues associated with the Bank Secrecy Act and anti–money laundering (BSA/AML) legislation. The new guidelines are intended to promote regulatory consistency in examinations.

To raise awareness of the Bank Secrecy Act/Anti–Money Laundering Examination Manual, a series of briefings for the banking industry and field examiners were held in five different locations around the country. The event in New York included a live Webcast.

Overview of BSA/AML examination manual

Key issues brought to the fore
The BSA/AML briefings shared the goal of clarifying the BSA’s major issues. These issues include

  • Risk assessment. Banks face increasing pressure to understand and evaluate the risks posed by their customers, products, and business locations. The briefings provided guidance on conducting a risk assessment to identify and quantify risk.
  • Risk management. The briefings focused on the link between risk assessment and internal controls to manage identified risks appropriately and direct resources efficiently.
  • Office of Foreign Asset Control (OFAC). The briefings highlighted the regulatory expectations for compliance with the various rules and requirements enforced by OFAC. (OFAC administers and enforces economic and trade sanctions against targeted foreign countries and organizations.)
  • Enterprise-wide BSA/AML. A key focus of the briefings was the importance of communication among federal and state regulatory agencies to ensure that all examiners understand a given banking organization’s BSA/AML program. Enterprise-wide programs, especially at large, complex organizations, should include a central function that monitors the organization’s BSA/AML risks and manages risk across all business units, functions, and legal entities. Examiners should review organizations’ internal audits for BSA/AML compliance.

Broad participation reinforces high-priority issues
The outreach events were hosted by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and FinCEN. In addition to the host organizations, state banking agencies, bank trade organizations, and OFAC also participated in the events.