EXAMINATION AND ENFORCEMENT ISSUES:

BEYOND THE PILLARSThe AMLA Third Annual

Full Day BSA/AML ConferenceOctober 4, 2013

Presented by:

John M. Geiringerjohn.geiringer@bfkn.com

Chicago, Illinois(312) 984-3217

2

Risk Assessment

• Size

• Complexity

• Geographic footprint

• Customer base

• Products / services

3

Elements• Internal controls to ensure ongoing

compliance

• Independent testing

• Individual responsible for coordinating / monitoring compliance

• Appropriate training for employees and directors

• Customer Identification Program

4

Internal Controls

Policies, procedures and processes designed to limit and control risks and achieve compliance

5

Internal Controls - Recommendations

Policies and Procedures

• Clearly written, comprehensive, and current

• Organized and tailored

• Useful to train others

• Document evidence of adherence

6

Internal Controls – Recommendations (cont.)

Monitoring and Reporting System• Identification or alert of unusual

activity• SAR decision-making, completion

and filing• Escalation criteria to close account

and notify law enforcement• Analysis of relationship when repeat

SARs filed

7

Independent Testing

• Conducted either by internal audit department or qualified third party

• Performed by individuals independent of compliance program

• Conducted at least annually

8

Independent Testing - Recommendations

• Proper involvement of BSA Officer

• Level of scope

• Appropriate transaction testing

• Assessment and validation of automated monitoring system

• Results provided directly to Board

9

BSA Officer

• Board designates individual• Comprehensive knowledge of BSA and

related regulations• Implements Board policies and directives• Coordinates and monitors day-to-day

compliance• Ensures that employees adhere to

policies, procedures and processes

10

BSA Officer - Recommendations

• Appropriate expertise, time, and resources

• Periodically meet with employees across bank

• Succession planning

11

Training

• Employees and directors receive appropriate training relevant to responsibilities

• Comprehensive, ongoing and documented

• Incorporates developments and changes

12

Training - Recommendations

• Include board of directors

• Updated requirements

• Compliance trends and hot topics

• Changes to compliance program

• Include policies and procedures

• Documented and noted in minutes

13

Customer Identification Program• Assess customer BSA risk at account

opening• Develop understanding of normal and

expected customer activity• Policy on account opening refusal and

closing accounts• Monitor high risk accounts and compare

anticipated to actual activity• Risk-based EDD procedures (cash

businesses, service providers, PEPs, etc.)

14

QUESTIONS?

EXAMINATION AND ENFORCEMENT ISSUES:

BEYOND THE PILLARSThe AMLA Third Annual

Full Day BSA/AML ConferenceOctober 4, 2013

Presented by:

John M. Geiringerjohn.geiringer@bfkn.com

Chicago, Illinois(312) 984-3217