Independent Banker - April 2023 - 22
PORTFOLIO
FOCUS COMPLIANCE
Are your bank's
BSA/AML programs
up to date?
FinCEN recently reported that a bank willfully violated the Bank Secrecy
Act, highlighting the importance of community banks updating their
BSA/AML programs. By Mary Thorson Wright
oney laundering-the process of
making illegally gained proceeds
appear legal or clean-can facilitate
crimes such as drug trafficking and
terrorism and can adversely affect the
economy. Financial institutions, with
their pivotal role in the financial system,
are key players in the fight to identify,
mitigate or quash money laundering.
While Bank Secrecy Act and antimoney
laundering (BSA/AML)
compliance has been fundamental to
financial institutions for some time,
it is not infallible. In December 2021,
for instance, the Financial Crimes
Enforcement Network (FinCEN)
announced that it had assessed an
$8 million civil money penalty on
Community Bank of Texas, N.A. for
willful violations of the BSA and its
implementing regulations. Among the
infractions, FinCEN noted that the
bank willfully failed to implement and
maintain an effective AML program
that was reasonably designed to guard
against money laundering.
How can community banks ensure
their BSA/AML programs will
help them avoid violations and the
associated penalties? Begin with a
comprehensive, up-to-date compliance
program and the qualified personnel
to implement and manage it, and then
ensure the program is effective. What
does that look like?
BSA/AML fundamentals
The 1970 passage of the BSA marked
the birth of anti-money laundering
laws and regulations for financial
institutions. A series of additional laws,
rules and revisions have led us to the
current requirements. Since 1970,
banks have been required to maintain
an anti-money laundering program.
Initially, the program was required to
include four core elements or pillars:
¡ A system of internal controls to
assure ongoing compliance
¡ Independent testing for compliance
M
22 // ICBA Independent Banker // April 2023
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Independent Banker - April 2023
Table of Contents for the Digital Edition of Independent Banker - April 2023
Independent Banker - April 2023 - Cover1
Independent Banker - April 2023 - Cover2
Independent Banker - April 2023 - 1
Independent Banker - April 2023 - 2
Independent Banker - April 2023 - 3
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Independent Banker - April 2023 - 24A
Independent Banker - April 2023 - 24B
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Independent Banker - April 2023 - Cover3
Independent Banker - April 2023 - Cover4
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