The Bank Secrecy Act is one of a few regulations with statutory training requirements. In addition to internal controls, independent testing, and the designation of a Bank Secrecy Act (BSA) officer, training is one of the four pillars of a financial institution’s BSA Program. Therefore, Bank Secrecy Act/Anti-Money Laundering (BSA/AML) training should be a priority when planning and implementing the annual training program. BSA/AML requirements cover a broad range of employees and departments, from new accounts personnel and tellers to operations employees and loan officers, all the way up to senior management and the board of directors. Consequently, training materials must provide a comprehensive overview and be tailored to each employee’s specific responsibilities. A “one-size-fits-all” approach is not sufficient.
As noted, designation of an individual responsible for managing BSA compliance is also one of the four pillars of a BSA Program. Therefore, periodic training from an outside source and/or a professional certification for the BSA officer should be part of a financial institution’s BSA/AML training plan (and budget). After all, if the BSA officer is not adequately trained on BSA requirements, a financial institution’s employees and board of directors will not be either.
Coverage of new rules and requirements must be included as part of annual employee and board of director BSA/AML training presentations. Therefore, the BSA officer must receive ongoing training to ensure awareness of regulatory changes such as those reflected in the most recent Federal Financial Institutions Examination Council (FFIEC) BSA/AML Examination Manual, which was released in December 2014. Revisions were made to several areas, including:
- Suspicious Activity Reporting.
- Currency Transaction Reporting.
- Foreign Correspondent Account Recordkeeping, Reporting, and Due Diligence.
- Foreign Bank and Financial Accounts Reporting.
- International Transportation of Currency or Monetary Instruments Reporting.
- Correspondent Accounts.
- Bulk Shipments of Currency.
- Automated Clearing House Transactions.
- Prepaid Access.
- Third-Party Payment Processors.
- Embassy, Foreign Consulate, and Foreign Mission Accounts.
- Nonbank Financial Institutions.
In addition to new rules and requirements, the BSA officer or training coordinator should ensure the financial institution’s own policies and procedures are part of a customized BSA training program for existing and new employees. Training materials should include tailored examples of suspicious activity, an explanation of the different forms of money laundering, employee accountability for BSA compliance, and the financial institution’s Customer Identification Program. Enhanced measures to address previously cited violations and deficiencies as well as penalties for noncompliance should also be included. For these reasons, a financial institution should not rely solely on online training resources, which do not address a financial institution’s unique policies and procedures or prior examination results. Internal classroom meetings provide a better venue for training in these areas. For risks applicable to specific business lines, training can be further concentrated to departmental meetings.
BSA/AML regulations contain a significant number of recordkeeping requirements, including Section 314(a) and 314(b), Office of Foreign Assets Control, Funds Transfers, Currency Transaction Reports, Exemptions, Suspicious Activity Reports, and Monetary Instruments. Effective training in these areas can be accomplished through online webinars or in-house presentations. Furthermore, due diligence training on higher-risk customers such as private automated teller machine owners, money services businesses, and marijuana-related businesses as well as higher-risk services such as remote deposit capture, private banking, and prepaid access devices can also be effective using either online or in-house resources.
Although the board of directors does not require the same level of technical training as the financial institution’s employees, directors must possess a general understanding of BSA requirements to provide oversight, approve policies and procedures, and provide sufficient resources.
Furthermore, annual board training should provide a summary of new developments or regulatory revisions as well as an overview of the penalties for noncompliance. Lastly, directors should be aware of BSA risk associated with any new products or services being considered.
As one of the four pillars of a successful BSA compliance program, BSA/AML training must encompass all areas of a financial institution, from the teller line to the board of directors. Training must be current, tailored to specific departmental or employee responsibilities, and customized to address the financial institution’s unique policies and procedures. As you plan and prepare your BSA/AML training for 2016, please keep these considerations in mind.