Introductory BSA/AML Examiner School, Atlanta, CA

Bank of Smithville USA

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need to monitor high-risk customers on a more frequent basis, lack of processes in place to monitor activity not detected by Verafin, and the designation of an ineligible customer as a Phase II exemption. The BSA Officer pillar citation is not a reflection on BSA Officer Allison Marks and her staff, who have demonstrated that they are dedicated and capable in the performance of their duties, but due to failure of management to provide sufficient staff necessary, which has contributed to the program deficiencies. Refer to Appendix B for more details relative to the apparent violations cited. Other segments of the AML/BSA program appear to be functioning satisfactorily. The independent review process appears comprehensive. The overall training program appears to be effective and the risk assessments have been enhanced, with only minor recommendations noted for both. Review of the bank’s policies and procedures regarding the Office of Foreign Assets Control (OFAC) was performed and no exceptions were identified. The OFAC compliance program is satisfactory. MATTERS REQUIRING BOARD ATTENTION (MRBA) 1 MRBAs are material issues and recommendations that require the attention of the Board. Prompt attention should be taken to address these matters. These items will be tracked by examiners until resolved. • Matters Requiring Board Attention #09-20XX.01 – Eliminate Verafin backlogs to ensure that suspicious activity is identified and reporting timely. Required Action: Management needs to ensure that adequate resources are available to make certain that Verafin alerts are reviewed and, if necessary, transferred to cases in a timely manner. The analysis of cases and ultimate submission of SARs needs to occur within the time frames mandated by regulations. Supporting Comments: The change in automated monitoring systems, along with the lack of sufficient resources, has resulted in significant backlogs of alerts and cases. The review and documentation of the alert, when transferred to cases status, generally provides sufficient detail to determine whether or not a SAR should be submitted. The submission of the SAR is often five or more months after a case has been established, well outside of the regulatory requirements. This has resulted in systemic late submissions of SARs, producing the citation of apparent violations.