BSA/AML Examiner School Case Study

Internal Use Only

The regulations that implement these prohibitions require the Bank to review its account records to determine whether they maintain no accounts directly for, or on behalf of, such entities. In addition to the direct prohibition, the Bank is: • Prohibited from knowingly providing indirect access to the specific entities through its other banking relationships; • Required to notify correspondent accountholders that they must not provide the specific entity with access to the account maintained at the U.S. bank; and • Required to take reasonable steps to identify any indirect use of its accounts by the specific entity. Orders and regulations implementing specific special measures taken under section 311 of the Patriot Act are not static, as they can be issued or rescinded over time as the Secretary of the Treasury determines that a subject jurisdiction, institution, class of transactions or type of account is no longer of primary money laundering concern. In addition, special measures imposed against one jurisdiction, institution, class of transactions or type of account may vary from those imposed in other situations. XX. Additional Retention of Records Policy and Procedures Overview The BSA Act establishes recordkeeping requirements related to different types of records including: customer accounts (ban, deposit, trust, etc.), BSA filing requirements, and records that document a bank's compliance with BSA regulations and laws. Bank of Somewhere retain all records obtained and maintained in connection with the Bank Secrecy Act and any related regulations for 5 years or for a time specified in the regulation and requested by Treasury. These records can be maintained in many forms including original, microfilm, electronic, copy or a reproduction. The Bank will maintain all records in a way that makes them accessible in a reasonable period of time. All outside requests for the reproduction of records, other than those made directly by the customer, shall be subject to review and disposition by the BSA Officer. Where legal process is involved, efforts will be made to assure that the customer's privacy rights are respected. Additionally, those records related to the identity of a bank customer must be maintained for 5 years after the account is closed. A list of records has been provided below for those record keeping requirements that were not included in previous topics: Recordkeeping Requirements for Extensions of Credit in Excess of $10,000 (not secured by real property) Specific loan purpose-lenders must inquire about the specific purpose of each loan where the amount is more than $10,000 unless it is secured with real estate. Descriptions such as "personal" or "personal expenses" are not acceptable. Even loans secured with savings accounts or certificates of deposit must have a specific purpose. If the customer is reluctant to provide a reason because it is a personal family matter, then a purpose such as "help son with legal matter" is sufficient. Regulators will spot-check the Bank's loan files to determine whether the purpose is recorded. Some bankers think this rule does not apply to loans secured with savings accounts or certificates of deposits because the customer is really just borrowing his/her own money. Often, these loan files will

For Training Purposes Only

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