Insights

Are HIDTAs Addressed in Your BSA/AML Risk Assessment?

According to the FFIEC BSA/AML Examination Manual (the “Manual”), identifying geographic locations that may pose a higher risk is essential to a financial institution’s BSA/AML compliance program. U.S. financial institutions should understand and evaluate the specific risks associated with doing business in, opening accounts for consumers from, or facilitating transactions involving certain geographic locations. When considering BSA risks, focus on the geographic locations unique to your financial institution, and in particular, high intensity drug trafficking areas (HIDTAs). Many financial institutions have their main headquarters or branch locations in small towns or rural areas and perhaps not in an area where HIDTAs are top of mind, but many are located in or adjacent to counties designated as HIDTAs.

Jun 20, 2018
Industries: Financial Institutions
By: Craig E. Johnson

CECL Methodologies Series: Probability of Default

The probability of default methodology is a relatively simple methodology in concept since it only requires three inputs to estimate lifetime losses. The challenging part of the methodology is calculating each of these inputs.

Jun 20, 2018
Industries: Financial Institutions
By: Brett D. Schwantes

Does Anyone Really Look at These Reports?

Suspicious activity reports (SARs) and currency transaction reports (CTRs) are some of the primary means by which financial institutions share information with law enforcement. Financial institutions must prepare and submit CTRs and SARs for a couple of reasons. First, the Bank Secrecy Act regulation requires both reports. CTRs are required to report cash activity over $10,000. SARs are required to report a myriad of suspicious activity—money laundering, structured cash transactions, wire fraud, and terrorist financing—just to name a few. The important thing to remember is that it is not the financial institution’s responsibility to convict someone, but rather to report activity that appears suspicious in nature. Second, law enforcement relies on reports filed by financial institutions to aid them in criminal investigations. The big question is: Does anyone really look at these reports? The good news is that they do! There have been numerous crimes identified due to required BSA reporting.

Jun 20, 2018
Industries: Financial Institutions
By: Kristen Ferwerda

Is It Time To Elevate Your Vendor Management Program?

Is vendor management keeping you up at night? Are you wondering if the right questions are being asked in order to fully understand and manage your risks? Are you getting what you want/require and have paid for? Are the right people involved in the process? Has it become too complicated and time consuming? If these are some of the questions running through your mind, you are not alone.

Jun 20, 2018
Industries: Financial Institutions
By: Tammy Wollersheim

Loan Originator Compensation – It's Complicated

On January 18, 2013, the Consumer Financial Protection Bureau (the “Bureau”) issued its final loan originator compensation rule (the “Rule”). More than five years later, many financial institutions still find themselves struggling to understand what types of payments they can and cannot make to their loan originators because, well, it’s complicated. 

Jun 20, 2018
Industries: Financial Institutions
By: Brianna Herder

Overdraft Overkill

I hesitated to write an article on overdraft practices because it seems there has been an over- abundance of industry information during recent years. However, although the concerns about overdraft practices may feel like old news, there constantly is new news about examiner scrutiny of anything overdraft related. So it seemed like a good time to review the potential overdraft tripwires.

Jun 20, 2018
Industries: Financial Institutions
By: Kathy Enbom

Phishing: The Bad Guys Favorite Gift

It’s the bad gift that keeps on giving all year long. The holiday season may be gone and Spring may be upon us, but email phishing continues to be one of the greatest threats to financial institutions. You must remain vigilant to protect your institution and, at the same time, be prepared in the event a phishing attempt is successful.

Jun 20, 2018
Industries: Financial Institutions
By: Joel R. Lego

Smart Software Selection

There are few responsibilities that instill fear and anguish in leaders quite like replacing software systems. Whether it is because of past experiences of failed projects, ballooning scope and costs, or the vast number of solutions available today, the process is daunting. Due to the sheer number of decisions and ramifications, we see many of our clients opt out and not make any changes, just limping along with systems that either don’t support or actively hinder their operations.

Jun 20, 2018
Industries: Financial Institutions
By: Brett Polglaze