BSA/AML Examiner School - Case Study Oct 2023

LCB 12/15

Checklist 3.1: BSA Compliance Program General Requirements (cont.)

Yes

No N/A

• Training for appropriate personnel? 12 CFR 21.21(c)(4); 12 CFR 163.177(c)(4); 12 CFR 208.63(c)(4); 12 CFR 326.8(c)(4); 12 CFR 390.354(c)(4); 12 CFR 748.2(c)(4) Has the institution conducted an adequate BSA/AML risk assessment? Determine whether the bank has included all risk areas, including any new products, services, or targeted customers, entities, and geographic locations. Did the institution incorporate the identified risks into its BSA/AML compliance program? Does the institution have an adequate process for periodically reviewing and updating its BSA/AML risk assessment? Do the institution's program and procedures provide for timely updates to implement changes in regulations? Does the institution comply with a federal banking agency's request for information and documentation concerning any account or its BSA compliance within 120 hours of the request? 31 USC 5318(k)(2)

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Y

Y

Y

Y

Y

y

Comments: *BSC is unable to comment on or assess its own product.

Report of Examination — The regulators performed a Safety and Soundness examination as of 03/31/2015 with a start date of July 6, 2015. The report stated that the BSA program and compliance with related laws and regulations has improved since the 2014 examination and is now considered satisfactory. A violation was noted in the timely filing of a CTR. In addition, a recommendation was made to enhance the narratives included in SARs. A review of the CTRs filed since the exam concluded that all had been filed on time. There were no SARs to review pertaining to the narrative enhancement. BSA/AML/OFAC/CIF Policy Approval — Review of the June 30, 2015 minutes reflected that the policy would be reviewed by Directors after the meeting and approved or denied through email. Email documentation supports approval of the policy,; however, the approval was never documented in any of the meeting minutes reviewed subsequent to the June 30, 2015 minutes. Recommendation - Revise the July 2015 Board minutes to reflect BSA/AML Policy approval by the Board. Independent Testing - BBC has performed the BSA/AML independent review since 2014 BSA/AML & OFAC Risk Assessments — The Bank's BSA/AML and OFAC risk assessments dated January 31, 2015 were reviewed. The overall risk rating for the bank being used for money laundering or encountering OFAC issues is low. BBC concurs with the rating.

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