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MVA White Collar Defense, Investigations, and Regulatory Advice Blog: Enhancing Transparency in the Agencies’ Approach to BSA/AML Examinations

August 2019

Charlotte Financial Regulatory Advice and Response Member Barbara Meeks and Counsel Kristina Whittaker’s MVA White Collar Defense, Investigations, and Regulatory Advice Blog post titled, “Enhancing Transparency in the Agencies’ Approach to BSA/AML Examinations” was published on August 5.

The article

Last month the Financial Crimes Enforcement Network (FinCEN) and the federal bank regulators issued a Joint Statement aimed at improving transparency into their risk-focused examination and supervision of banks’ compliance with Bank Secrecy Act/Anti-money Laundering (BSA/AML) requirements.

The statement outlines common supervisory practices for assessing a bank’s BSA/AML risk profile, scope and planning of examinations and evaluating the adequacy of BSA/AML compliance programs.  The risk-focused approach enables federal agencies to better tailor examination plans and procedures based on the unique risk profile of each bank.  The statement does not establish new requirements.  Interestingly, though, the agencies reiterate that banks are encouraged to manage customer relationships and mitigate risks based on customer relationships rather than declining to provide banking services to entire categories of customers.  Since Operation Chokepoint, banks have spent billions of dollars to enhance their BSA/AML programs, including satisfying enhanced due diligence requirements for customers in various high risk industries.  The practical reality for many banks is that the additional burden, intense scrutiny, and potential for reputation risk simply may not be justified for customers in certain industries.  So banks will likely continue to wrestle with various competing principles as they re-evaluate customer risks and relationships through their BSA/AML programs.   

The full blog post can be viewed here.