BSA-AML Examiner School eBook

Bank Secrecy Act Assessment (Continued)

Interim BSA Officer stated that Audit Firm Representative is coming to the institution in September 2016, to provide in-depth BSA training for all employees. CEO stated that he recently upgraded the web-based training site, Banker's Edge, to include additional BSA/AML training opportunities. The system provides a past due report of all employees who have not completed training annually, and the report will be provided to the Board regularly. Interim BSA Officer stated that tellers received basic monetary instrument and internal control procedures training during July 2016. She further commented that all employees will receive the necessary training on internal processes and procedures by September 2016. CUSTOMER IDENTIFICATION PROGRAM The Board and management failed to implement an effective CIP. Employees have not followed established CIP policies and procedures as several CIP exceptions were noted in the 32 new accounts sampled during the examination. Employees do not consistently collect the required minimum identifying information from customers. There were ten instances identified where the customer's address or the TIN was not obtained. Internal policy states that accounts may not be opened for customers missing TINs or social security numbers. An apparent violation of Section 1020.220(a)(2)(i)(A)(1) through (4) of 31 CFR Chapter Xis cited for failure to obtain minimum information prior to account opening. See the Violations of Laws and Regulations pages for further details. The bank's BSA Policy establishes that employees should utilize a combination of documentary and non documentary methods to verify a customer's identity. However, of the 32 new accounts sampled during the examination, there were 14 instances without evidence of verification procedures performed. An apparent violation of Section 1020.220(a)(2)(ii) of 31 CFR Chapter Xis cited for failure to verify customer identity. See the Violations of Laws and Regulations pages for further details. In other instances related to business accounts, no identification or verification information was collected on the signers on the account, despite bank policy requiring such information. Interim BSA Officer stated that Audit Firm Representative will be providing training to employees in September 2016. Interim BSA Officer also stated that employees received basic training on the New Account and CIP forms. She is performing a secondary review of all New Account forms to ensure they are being completed correctly to comply with the CIP requirements. Interim BSA Officer stated that she will immediately contact customers to try to obtain missing CIP information. Former BSA Officer and management failed to retain CIP records for the required timeframes. The CIP account sample was selected from a list of new accounts opened between December 2015 and July 2016. Management could not find customer documents such as CIP information, signature authority cards, or any type of account opening documentation for four active accounts. An additional three accounts selected from the new account list had subsequently closed and management could not find CIP information or any type of account opening documentation for three closed accounts. Management must ensure that the minimum CIP records are maintained to comply with the minimum recordkeeping and retention requirements. An apparent violation of Section 1020.220(a)(3)(ii) of 31 CFR Chapter X is cited for failure to keep CIP records for required timeframes. See the Violations of Laws and Regulations pages for further details. CEO stated that there was no previous filing system and customer files were in various places throughout the institution. He stated that management has implemented a new filing system to ensure records are properly stored and retained. Back-up BSA Officer stated that management and employees continue to look for the missing account files. 4 8