BSA-AML Examiner School Case Study eBook

Internal Use Only

BSA/AML Policy and Program

Officer may perform a risk assessment more frequently as new products, services, or modifications are introduced that materially impact the Bank’s risk profile. The risk assessment process forms the foundation of this BSA/AML/OFAC program. Using the results of the annual BSA/AML/OFAC risk assessment, the BSA/AML Officer will: ● Identify the Bank’s BSA/AML/OFAC risk profile; ● Evaluate the adequacy and effectiveness of current and anticipated BSA/AML/OFAC controls; ● Identify any BSA/AML/OFAC risks that are outside of the Bank’s risk tolerance; and ● Recommend and implement modifications to the BSA/AML/OFAC program (and the underlying strategy, policies, and procedures) as needed to bring the Bank’s BSA/AML/OFAC risk to an acceptable level. In conducting the risk assessment, the BSA/AML Officer assigns inherent BSA/AML/OFAC risk ratings to each product and service based on a formal assessment of product/service, customer, and geographic risks. The BSA/AML Officer then determines the residual risk levels by assessing the effectiveness of relevant controls in mitigating inherent risks. The BSA/AML Officer reports the results of each assessment to the Board, together with an action plan for changes to the BSA/AML/OFAC program or the Bank’s business practices necessary to mitigate control weaknesses or align residual risk levels with the Bank’s risk appetite. The BSA/AML Officer will also assess the AML risks of each Fintech Partner consistent with the methodology specified above. KNOW YOUR CUSTOMER (KYC) PROGRAM The Bank’s KYC program is designed to allow the Bank to identify and verify the identity of its customers with reasonable assurance and establish processes for customers for whom additional risk-based diligence is warranted. If TS&J does not receive satisfactory evidence of a customer’s identity, it will not permit the customer to transact. Customer Identification Program Pursuant to Section 326 of the USA Patriot Act and its implementing regulations, TS&J will develop and implement a Customer Identification Program (“CIP”) that establishes procedures for verifying the identity of each customer that opens a new account. The Bank will: ● Make a reasonable effort to determine the identity of all customers requesting bank services;

12

Confidential