Introductory BSA/AML Examiner School, Providence, RI

of Trustees/Managers will be obtained, and management will establish enhanced due diligence procedures including suspicious activity reports filings.

POLICY ELEMENTS Authority and Responsibility

The Board of Trustees/Managers will receive an initial briefing regarding the requirements of the final CIP regulations. Thereafter, the Board will review, discuss, and if accepted, adopt the formal CIP program as a sub- policy of the Bank’s BSA/AML and OFAC Policies. The CIP sub-policy will be reviewed annually. It will also be considered in support of the overall BSA/AML/OFAC compliance policy efforts on an annual basis. The Board has previously designated the Compliance Officer as the BSA Officer who is responsible for overseeing Anytown Community Bank’s BSA compliance program. Accordingly, the BSA Officer or his/her designee will coordinate and direct the development, implementation and ongoing monitoring of the Bank’s day-to-day compliance with BSA and CIP requirements. In carrying out these responsibilities, the BSA Officer and/or his/her designee will: • Perform an institution-wide survey and risk assessment of procedures for obtaining and verifying customer identity information utilized by all departments where a customer account relationship may be established. • Review existing policies and procedures for customer identification in relation to the requirements of CIP. • Develop, implement, and maintain risk-based customer identification procedures and controls which include: o Obtaining and verifying the identity information of any person seeking to open an account, including name, address, and other identifying information, o Maintaining records of the information used to verify the person’s identity, and o Determining whether the person appears on any government lists • Implement staff training programs. • Receive periodic training to maintain proficiency in AML requirements. • Monitor the continuing effectiveness of the CIP and recommend any program changes to the Board for review and approval. • Provide for periodic independent testing and audit review of the program. Risk Assessment and Management The BSA Officer is charged with the responsibility for ensuring that an institution-wide risk assessment is initially conducted to determine the risks associated with the Bank being unable to properly identify persons seeking to open new accounts, and therefore being unable to form a “reasonable belief” that it knows the true identities of its customers. The risk assessment will result in the establishment of risk-based procedures appropriate to different account opening situations. Factors relevant to this risk assessment will include: size of the bank; location of the bank; type of business and customer base; types of accounts offered by the bank; various methods of opening accounts; and types of identifying information available. The risk-based procedures adopted as part of the CIP must provide specific guidance to employees for opening new accounts. The degree to which customer identity information is verified is to be directly related to the level of risk associated with different account opening scenarios. The risk assessment will also result in documenting the basis for procedures associated with opening additional accounts for existing customers of the bank, and for demonstrating that the Bank has previously established a reasonable belief that it knows the true identity of existing customers. As the relevant factors identified above evolve with the growth of the Bank and its organizational complexity, and changes occur, the risks associated with these changes will be assessed on an ongoing basis. The CIP will be adjusted accordingly, and procedures will be revised based on changing levels of risk. Definitions For the purpose of this policy, the following terms will have the meanings stated below: • Account – Refers to a formal banking relationship established to provide or engage in services, dealings, or other financial transactions including a deposit account, a transaction or asset account, a credit account, or other extension of credit. Account also refers to a relationship established to provide a safe deposit box or other safe-keeping services, or cash management, custodian, and trust services.