Employee Turnover by hn79tU

VIEWS: 4 PAGES: 20

									WEBSTER FIRST FEDERAL
    CREDIT UNION


BSA/AML RISK ASSESSMENT
                                                  Table of Contents

Table of Contents ................................................................................................................ 2
Executive Summary: ........................................................................................................... 3
Asset Size:........................................................................Error! Bookmark not defined.4
Number of Employees: ....................................................Error! Bookmark not defined.4
Employee Turnover: ........................................................................................................... 4
Geographic Location:.......................................................................................................... 4
   Branch & ATM Locations: ............................................................................................. 5
Customer Base: ................................................................................................................... 5
Products & Services: ........................................................................................................... 7
   Consumer Products: ........................................................................................................ 7
   Consumer Lending: ....................................................................................................... 10
   Mortgage Lending:........................................................................................................ 11
   Business Products ......................................................................................................... 12
   Business Loans: ............................................................................................................ 12
Information Security/Unauthorized Access to Member Information ............................... 15
Bank Secrecy Act & Anti-Money Laundering: ................................................................ 16
Customer Identification Program ...................................................................................... 16
Customer Due Diligence: .................................................................................................. 18
Currency Transaction Reporting: ...................................................................................... 18
Suspicious Activity Reporting: ......................................................................................... 18
OFAC Reporting: .............................................................................................................. 20




                                                                                                                                  2
Executive Summary:
The following risk assessment has been developed to determine the risk level that exists in our client base
by developing a structured process to assess, identify, and assign risk to products, services, members, and
geographies as it relates to the Bank Secrecy Act, Anti-Money Laundering, and OFAC procedures. This
policy will be updated annually by the risk assessment committee.



   Employee Turnover
       o Moderate turnover of frontline personnel.
       o Annual BSA/AML testing is required for all employees that have contact with members.
       o Upon hiring, criminal background checks are completed for all employees.

   Geographies
       o All 9 branches are located in a High Intensity Drug Trafficking Area.
       o No branches are located in a High Intensity Financial Crimes Area.

   Member Base
       o Comprised of individuals who live, work or worship in Worcester County.
       o Stable well-known customer base.
       o Low number of high-risk businesses.

   Products and Services
        o The credit union offers a wide array of e-banking products and services such as bill payment
            and online account transfers.
        o Overall, most products and services offered by Webster First Federal Credit Union fall in the
            low to moderate categories.

   Information Security/Unauthorized Access to Member Information
        o Member notices will be sent to any member who has been affected by unauthorized access to
            his/her member information.

   Customer Identification Program
        o Components of the credit union’s CIP Policy include: Identity Verification Procedures,
           Internal Control, Recordkeeping Procedures, Procedures for Comparison of Members with
           Government lists, Member Notice Procedures, and Training of Employees.

   Currency Transaction Reporting
        o A currency transaction log is maintained in each branch whenever the issuance of selling of
            check-line instruments in the amount of $3,000 or more, up to and including $10,000.
        o A currency transaction report is filled out for any deposit or withdrawal of more than $10,000.

   Suspicious Reporting Activity (SAR)
        o A SAR is filed when the credit union detects or suspects any actual or attempted federal
            criminal violation committed against the institution or being conducted through the CU.

   OFAC Reporting
       o The names of all parties related to a transaction are checked against the OFAC database.
       o Each member is checked against the OFAC Database on a quarterly basis.




                                                                                                              3
Employee Turnover:

Summary:

WFFCU has experienced a moderate employee turnover of frontline employees. This
turnover can be attributed to lack of accelerated advancement, salaries, increased
responsibility relating to recent heightened check fraud, and fear of disciplinary action
due to cash handling errors.

Current Risk Mitigation:

    Upon hiring, frontline employees are required to undergo extensive training in
     security procedures (ex. robbery training), BSA regulations, Anti-Money
     Laundering, and Customer Identification Program.
    Criminal Background checks are required for all new employees as of August 18,
     2005.
    Annual BSA/AML testing is required for all employees that have contact with
     members.
    Product and service training is provided weekly to increase product knowledge
     and awareness.
    Offering partially subsidized courses in the banking field.
    Offering a comprehensive benefits package including 401k, disability insurance
     coverage, health and dental insurance.

Geographic Location:

        Webster First Federal Credit Union has 9 branches located throughout Worcester
County. Membership for Webster First Federal Credit Union is open to anyone who
lives, works or worships in any of the cities or towns of central Massachusetts’ Worcester
County. Immediate family members of existing members also qualify for membership.




                                                  *HIDTA Headquarters located in Boston.

       None of WFFCU’s existing branches are located in the High Intensity Financial
Crimes Area. However, Worcester County is considered a High Intensity Drug
Trafficking Area. All branches, with the exception of Worcester, are located in small


                                                                                            4
rural communities. Therefore, we do not consider these locations as high-risk drug
trafficking areas.

     All ATMs are located at the 9 branches throughout Worcester County. These
ATMs are all serviced under dual control by employees located at each branch.

    Combinations and keys to the ATMs are under dual control.
    Sufficient illumination is provided at all ATMs.
    ATM machines will capture a card if a pin is used incorrectly in a consecutive
     manner.
    If communication between the ATM and the central processing unit is disrupted,
     the alarm system will be triggered.
    3 ATMs – Located at Douglas, Dudley, Worcester allow deposits.
    There is a maximum amount for withdrawal from an ATM of $505 per card per
     day.




Branch & ATM Locations:


                 Address              Town/City      State Zip Code   Branch/ATM
             1 North Main St.          Webster        MA     01570    Branch/ATM
           547 Southbridge St.         Auburn         MA     01501    Branch/ATM
                282 Main St.           Douglas        MA     01516    Branch/ATM
               16 Airport Rd.          Dudley         MA     01571    Branch/ATM
         Trolley Crossing - Rt. 20     Charlton       MA     01507    Branch/ATM
           275 Greenwood St.          Worcester       MA     01607    Branch/ATM
            118 West Main St.          Spencer        MA     01562    Branch/ATM
          1298 Providence Rd.         Whitinsville    MA     01588    Branch/ATM
          149 West Boylston St.      West Boylston    MA     01583    Branch/ATM
                11 Gore Rd.            Webster        MA     01570     *ATM Only

We no longer service the ATM at 11 Gore Rd Webster, Ma 01570. (4-2-09)

Customer Base:

Member Relationships:

Webster First Federal Credit Union’s member base is comprised of individuals who live,
work or worship in any of the cities or towns of central Massachusetts’ Worcester
County. Typically, our members are low to middle working class individuals. WFFCU
does have a few nonresident aliens as part of our membership base but totals less than
.25% of our overall membership. As a whole, WFFCU has a stable well-known customer


                                                                                      5
base with few high-risk members. Our high-risk members include members with
subpoenas for criminal investigations, suspicious activity reports, and cash intensive
businesses. A list of these high-risk members can be found with the Vice President of
Operations.

Business Relationships:

Upon reviewing our current business customers, we have identified a small amount of
cash intensive businesses. Our business customer base does not include non-bank
financial institutions, politically exposed persons, or embassy and foreign consulate
accounts.Although some of our business customers are considered high-risk according to
the FFIEC, we have obtained all necessary documentation that is required to properly
identify their legitimacy. As a standard procedure, WFFCU obtains additional business
information to help detect any changes to normal business activity. These requirements
can be found in the CIP Policy located later in this report.
                     Commercial Loan Department - Customer Base

                    Type of Business                   Low      Moderate      High
        1.    Restaurants                                                      X
        2.    Churches                                                         X
        3.    Construction Co. / Contractors                                   X
        4.    Car Wash Facilities                                              X
        5.    Retail/Wholesale – Ethnic Foods                                  X
        6.    Beauty Salon/Spa                                                 X
        7.    Landscaping/Garden Ctrs.                                         X
        8.    LLC’s, LLP’s (Real Estate Holdings)                              X
        9.    Liquor Store                                                     X
       10.    Dry Cleaners                                                     X
       11.    Gift Shops                                                       X
       12.    Bars/Taverns                                                     X
       13.    Non-Profit Org.                                                  X
       14.    Attorneys                                                        X
       15.    Golf Course                                                      X
       16.    Gym                                                              X
       17.    Trucking/transporter                                             X
       18.    Indoor Sports Facility                                X
       19.    Moving Company                                        X
       20.    Truck/Auto Repair                                     X
       21.    Light manufacturing                        X
       22.    Machine Tool & Die Shop                    X
       23.    Individual Real Estate Investor            X

Although numbers 1-17 are considered high-risk members according to the FFIEC
manual, we consider these moderate risk because of our ability to conduct due diligence
according to our CIP policy. Accounts are reviewed annually for any possible changes in
financials or business operations.

*Refer to the High Risk Business Categories




                                                                                         6
Products & Services:
Consumer Products:

Domestic & International Wires (High-Risk):

   Current Risk Mitigation
    The credit union accepts both domestic and international wires for members only.
    Both the originator and the receiver are verified through the OFAC list.
    Wires are not done by phone or by fax.
    Wires may be done by mail if signature is original and can be matched to the
      signature card on file.
    All domestic wires are generated through Ease-link.
    One person creates the wire and the other person verifies the wire.
    With this process Ease-link has a dual control attached that will only allow one
      individual to either create or verify a wire.
    Each individual has their own pin # and a token for a wire.
    All international wire transfers are generated through a platform called Virtual
      Trading. The same dual control is attached through this platform which allows
      for only one individual to create and another to verify.

Non-Member & Member Check Cashing (High-Risk):

    All checks cashed by our members have appropriate holds in accordance to REG
       CC.
    For official bank checks tellers are required to contact the “drawn on” bank to
       verify authenticity before depositing into a members account.
    Payroll checks may be cashed for a non-member up to $1,000 if the check is from
       a local well-known business.
    With the exception of payroll checks, non-member checks cannot be cashed at the
       credit union.
    Identifying information of non-members cashing on-us checks is logged at each
       branch location.
   
Refer to ACH Risk Policy for all Electronic Products and Services

Online Bill Payment (Low-Risk):

       Potential Risk:
        Transferring money outside the credit union.

       Current Risk Mitigation:
        All bill payment beneficiaries are checked through OFAC.
        Mandatory Multifactor Identification is required.

ACH Originating (Low-Risk):


                                                                                    7
       Potential Risk:
        Transaction is processed without enough funds to support the electronic
          transaction.

       Current Risk Mitigation:
        Transactions verified for account balance and accuracy with originating client
          on the telephone.
        Product is audited once a year by an outside organization.
        Currently originating for less than five companies/organization.(4-2-09)




ACH Receiving (Low-Risk):

       Potential Risk:
        Transactions posted to incorrect account, or returned with the incorrect code.
        Loss from reclamations being processed incorrectly.
        Possible fraudulent transactions processed to members account.

       Current Risk Mitigation:
        Policy and procedures followed.
        Annual training of ACH operator.
        Unauthorized ACH forms and Stop Payment forms available to reverse
          fraudulent transactions.
        Product is audited once a year by an outside organization.

ATM/Debit Cards (Moderate-Risk):

       Potential Risk:
        Loss from fraudulent use of card/stolen card.

       Current Risk Mitigation:
        Fraud Detection Network in place.
        Pin numbers are randomly generated by a third party and sent out 4 days
          before the card.
        Daily withdrawal limits.

Overdraft Privilege (Low-Risk):




                                                                                          8
       Potential Risk:
        Loss from members refusing to repay their negative balances.

       Current Risk Mitigation:
        Reserve account established to cover all negative balances of the membership
          from use of Overdraft Privilege.

Pre-Authorization Transfers (Low-Risk):

       Potential Risk:
        No adverse affect to the Credit Union.

       Current Risk Mitigation:
        Account analysis by accounting department for discrepancies.

Payroll (Low-Risk):

       Potential Risk:
        Funds posted to members account incorrectly.

       Current Risk Mitigation:
        Trial balances allow transactions to be displayed before being posted.
          Account analysis by accounting department for discrepancies.

Remote Deposit (/Moderate-High Risk)
     Potential Risk
    Unlawful use of system to defraud the credit union or associated business.
    Physical alteration of a deposited check
    Counterfeit items or duplicate presentment
    Possibility of increased risk of identity theft

     Current Risk Mitigation:
    Member must sign the Terms & Conditions Contract indemnifying WFFCU from
     any liability
    Approval determined by the Commercial Loan Department
    No consumers are signed up for this product at this time


       \


Employee Risk EFT Department:

ATM/ Consumer Debit Cards/ Business Debit Cards and Pins(4-2-09)

       Potential Risk:



                                                                                    9
        Cards and pins returned from the post office could potentially be used
         fraudulently.

       Current Risk Mitigation:
        All cards and pins are logged and deleted using dual control.

Other EFT Products:

       Potential Risk:
        Access by third parties to operating systems.

       Current Risk Mitigation:
        All systems require passwords that are changed periodically.




Consumer Lending:

Underwriting:

    Detailed procedures for approving consumer loans can be located within the
       Consumer Loan Policy, which is approved and updated every 12 months.
    Loan approvals are based on originators lending authority, which is controlled by
       the “Symitar ELA” software.4-2-09
    Copy of RMV1 is required before a loan is disbursed.
    A UCC1 is filed if the collateral does not have a title.
    Holds are placed on pledged shares.
    Loan origination checklists are required to ensure all steps and forms are
       completed and signed.
    Only current members and those that qualify for membership are allowed to apply
       for a loan. (Internet Loan Applications may be received from anywhere; however,
       applicants are notified that they are out of our lending area.)
Disbursements:

    All loan disbursements are in the form of a cashier’s check or a deposit directly to
     a members account.
    Dual signatures are required on loan checks.

Monitoring Loan Activity:

    Quality control of files is maintained by the servicing department.
     A “New Loan Activity Report” is generated daily and matched to loan files
     received from all loan originators. (4-2-09)




                                                                                       10
    Loan servicing department examines new notes and related documentation;
     compares to information recorded in the loan system.
    A private auditing firm periodically confirms member balances.
    New loans are reviewed by the credit committee weekly and reports are generated
     on a daily basis.


Past Dues:

    Late notices are computer generated on the 10th day of delinquency.
    Collections Department monitors all delinquent accounts.

Maintenance Changes to Loan Reports:

    All file maintenance is reviewed by the department head on a daily basis.

Payments:

    Payments on Consumer Loans can be preauthorized, processed by tellers, or
     through online banking and audio response.

Payoffs:

    Consumer Loan payoffs can be done at the teller line or by the Loan Servicing
     Department.

Mortgage Lending:

Underwriting:

    Detailed procedures for approving mortgage loans can be located within the Real
     Estate Lending Policy, which is approved and updated every 12 months.
    A title search is required.
    Loan origination checklists are required to ensure all steps and forms are
     completed and signed.
    Only current members and those that qualify for membership are allowed to apply
     for a loan.

Disbursements:

    Disbursements are always in the form of a cashier’s check.
    Dual signatures are required on loan checks.

Monitoring Loan Activity:




                                                                                     11
    Escrow payments for property taxes are monitored by an independent tax escrow
     service.
    Maintaining proper insurance coverage is monitored by the Mortgage Servicing
     Department.
    Loan servicing department examines new notes and related documentation;
     compares to information recorded in the loan system.
    A private auditing firm periodically confirms member balances.
    The computer system generates reports for loans originated on a weekly and
     monthly basis.

    Mortgage escrows are monitored jointly by the mortgage servicing department
     and the independent tax service in compliance with applicable laws and
     regulations.

Past Dues:

    Late notices are computer generated on the 15th day of delinquency.
    Collections Department monitors all delinquent accounts.

Maintenance Changes to Loan Reports:

    All file maintenance is reviewed by the department head on a daily basis.

Payments:

    Payments on Mortgage Loans can be preauthorized, processed by tellers, or
     through online banking and audio response.

Payoffs:

    Mortgage Loan payoffs are processed by the Mortgage Servicing Department.

Business Products

Business Checking Accounts (High-Risk):

    Obtain documentation according to CIP Policy.
    Business Member Questionnaires (BMQ) are required to be completed at account
     opening to establish anticipated cash and wire transfer activity.
    The collection of information through BMQs helps to identify suspicious or
     unusual activity.

Business Loans:

Summary:




                                                                                   12
        WFFCU currently provides qualified Members with loans in accordance with
NCUA Regulation Part 723. Loans must be used for “business purposes only” including,
but not limited to the following:

      Acquisition of land for development
      Construction loans
      Funds to renovate existing rental properties
      Purchase or construction of commercial buildings or investment properties
      Vehicle and Equipment Loans
      Lines of Credit

It is the loan officer’s responsibility to properly identify a prospective borrower in
accordance with WFFCU’s CIP written policy. At the time of application and prior to
approval, we obtain the following documents from the Borrower/Co-Borrowers, and
perform the following:

      Personal financial statement
      Personal and Business tax returns and financial statements
      Taxpayer ID number
      Copies of recorded corporate documents
      Credit History for each Borrower and Co-Borrower
      Search of Public Records at the Registry of Deeds and Secretary of State’s Office.
      Verification of use of proceeds
      Personal visit to Borrower’s place of business
      Inspection of collateral by credit union personnel

Underwriting:

    Detailed procedures for approving loans can be located within the Commercial
     Loan Policy, which is reviewed and updated every 12 months.
    Once a loan request is reviewed and approved by the WFFCU Credit Committee,
     a formal commitment letter is sent to the Borrower/Co-Borrower(s).
    Only current members and those that qualify for membership are allowed to apply
     for a loan.

Disbursements:

    All loan closings involving real estate are handled through WFFCU’s CUSO—
     WebFirst Mortgage, LLC.
    Prior to the closing, the purpose or use of funds must be identified, and supporting
     documentation must be provided prior to or at closing.
    If the loan is a line of credit and Borrower requests an advance on the LOC, the
     purpose must be documented and supporting documentation provided.
    If the advance is for construction purposes, the Loan Officer will perform a field
     inspection and document the file.




                                                                                         13
Monitoring Loan Activity:

    Each loan at its inception is assigned a “Loan Quality Rating” on a scale of 1-7
     that is based on cash flow, credit, collateral/loan to value, etc.
    Various reports are generated on a daily/monthly basis to track delinquency,
     maintenance changes, principal paydowns, payoffs, and affiliated loans.

Past Dues:

    The Sr. Loan Officer and Sr. Credit Analyst will contact all Borrowers once they
     reach 10-12 days past due (grace period is 15 days).
    An explanation for the tardiness and date payment is promised is documented.
    Any loan reaching more than 30 days past due is reported to the Board of
     Directors.
    Sr. Loan Officer has the ultimate responsibility in collecting debt in serious
     delinquency.

Maintenance Changes to Loan Records:

    Changes to loan records may occur daily, and are usually processed by the
     Administrative Assistant.
    Branch Personnel along with Operations Personnel, have access and ability to
     change records. Dual Control exists to monitor this activity.
    A daily report is generated listing all changes to loan records to be reviewed by
     the Sr. Loan Officer for improper activity.
    All changes must be satisfactorily explained and within proper guidelines.

Payments:

    Payments on Business Loans are usually handled at the Branch Level via mail or
     personal appearance.
    Policies and Procedures are in effect for any large cash transaction.
    The Commercial Loan Department is notified if a larger than scheduled payment
     is made or if a payment in excess of $10,000 is transacted.
    The Loan Officer will contact the customer for an explanation, and document the
     file.
    A monthly report recording all payments made on commercial loans is scrutinized
     for larger than expected payments.

Payoffs:

    If a request for a payoff is received on an existing business loan, the Loan Officer
     in charge of the account will call the member for an explanation.
    As standard operating procedures, the Administrative Assistant will not quote a
     payoff unless a request in writing is received from the source requesting funds.




                                                                                         14
Reviews:

     Annual reviews are performed in accordance to the Commercial Loan Review
      Policy.
     In accordance with the terms and conditions of the loan, Borrowers and Co-
      Borrowers must submit updated personal financial statements, personal tax
      returns, business tax returns and/or financial statements to be reviewed by the
      Credit Analyst.
     Based on the analysis, he/she will recommend a Loan Quality Rating. The Senior
      Lending Officer will review each analysis and determine final quality rating.
     The analysis will indicate whether or not any unusual activity has taken place
      since the prior year.
     The loan officer or Sr. Credit Officer will visit each place of business at least once
      a year.

Information Security/Unauthorized Access to Member Information

Member notices will be sent to any member who has been affected by unauthorized
access to his/her member information. If our investigation determines which specific
accounts were affected we will limit notification to those specific accounts whether the
misuse has occurred or is reasonably possible. Should unauthorized access occur to a
group of accounts, without knowing which specific accounts were affected, Webster First
Federal Credit Union will notify all members in the group. This encompasses our
Information Security Program as well as Identity Theft.

Member notices will include the following:

     A description of the incident in general terms and the type of information that was
      accessed.
     A telephone number that members may use to get more information.
     A reminder to closely review their accounts during the next one-to-two years.
     A recommendation that the member should review their account statements and
      report any suspicious activity.
     A description of how members may place a fraud alert on their accounts.
     A recommendation that the member obtain a free credit report to look for
      fraudulent activity.
     Information regarding the Federal Trade Commission’s guidance concerning what
      members can do to protect themselves against identity theft.

The Regional Director of NCUA will be notified if any unauthorized access to sensitive
member information occurs. It will be the responsibility of Webster First Federal Credit
Union to notify NCUA if any of our service providers experience an unauthorized
intrusion.

*Please refer to Privacy Policy for further information.




                                                                                         15
Bank Secrecy Act & Anti-Money Laundering:

Summary:

A person who conducts a financial transaction “with knowledge” that the funds or
property involved are the proceeds of crime, and who intends to further that crime, or to
conceal or disguise those proceeds, is laundering money. Money Laundering can be
disguising the source of ownership of illegal funds to make them appear legitimate, or it
can be lawfully hiding lawfully acquired money to evade taxation, or it can be using
legally gained money in the pursuit of illegal activities.

Customer Identification Program

The following Components of Webster First Federal Credit Union’s Customer
Identification Program include:

      Identity Verification Procedures
      Internal Control
      Recordkeeping Procedures
      Procedures for Comparison of Members with Government lists
      Member Notice Procedures
      Training of Employees

Identifying the customer:

Webster First Federal Credit Union requires the following information for a member to
successfully open a new account:

Consumer Accounts:

    Obtain the customer’s name, address, and phone number along with the
     customer’s date of birth and mother’s maiden name to be listed on the member
     agreement.
    Verify identification with a driver’s license with photograph, or U.S. passport
     together with a major credit card, employer identification card, current utility bill
     from the customer’s current residence, and/or a college photo identification card.
    Consider the proximity of the customer’s residence or place of business to the
     credit union’s office.
    Consider the source of funds used to open the account.
    Verify new checking account information through E-Funds to determine if the
     customer has been involved in previous questionable activities such as kiting and
     NSF Transactions. Verify all new members through Lexis/Nexis for identity
     verification.
    For large accounts, ask for previous bank references.

Business Accounts:


                                                                                        16
    Obtain evidence of legal status such as articles of incorporation, government-
     issued business license, partnership agreement or trust instrument.
    Verify the name of the business with a reporting agency and prior bank
     references.
    Visit the business (if appropriate) to verify its existence and its ability to provide
     its services.
    Consider the source of funds used to open the account.
    For large commercial accounts, consider obtaining financial statements, a
     description of the principle line of business, a description of operations and the
     anticipated volume of cash sales.

Additional documents needed for Business Accounts:

Money Services Businesses must be registered with FinCen and the State of
Massachusetts. Any business that sells Lottery tickets must provide a copy of their
Massachusetts Lottery License.

Sole Proprietorship:
       -TIN (Tax Identification Number)
       -Business Certificate (if possible)

Partnership:
       -EIN (Employer Identification Number)
       -Partnership Agreement
       -Certificate of Good Standing/Legal Existence

Limited Liability Corporation:
       -EIN paperwork
       -Articles of Organization
       -Certificate of Good Standing/Legal Existence

Corporation:
      -EIN (Employer Identification Number)
      -Articles of Incorporation & Any Amendments
      -Corporate Resolution
      -Certificate of Good Standing/Legal Existence

Current Risk Mitigation:

    Member agreements are reviewed by a designated employee to verify all required
     information and signatures.
    Frontline employees verify member security passwords against information
     entered into the computer systems.
    Member Due Diligence and Share Due Diligence is documented on Epysis. This
     information filters through Yellow Hammer BSA and risk rates our members.



                                                                                          17
    If unusual or inconsistent member activity is identified, a Suspicious Activity
     Report will be documented and filed.

Customer Due Diligence:

It is essential that WFFCU maintain proper verification of identity procedures and obtain
the proper documentation outlined in our CIP policy at account openings. This will
provide the information necessary for employees to be alert of any unusual transaction
activity or activity that is disproportionate to the members known business.

Currency Transaction Reporting:

Treasury Department regulations require financial institutions to make reports of certain
transactions with members and/or customers and to retain certain records pertaining to
those transactions.

Currency Transactions of $3,000 to $10,000
         A Currency Transaction Log is maintained in each branch whenever the issuance
or selling of check-line instruments in an amount of $3,000 or more, up to and including
$10,000 in currency. Covered instruments include bank checks, money orders, and
travelers’ checks.
     Original is sent to Teller Supervisor at the main office and retained for five years
         after the date of the report.
     Copy to be kept on file at originating branch.

Currency Transactions that Exceed $10,000
         For any deposit or withdrawal including ATM and POS made in cash of more
than $10,000, a Currency Transaction Report is filled out. Multiple transactions that
result in cash in or cash out of more than $10,000, in any one business day, should be
treated as a single transaction if you have knowledge that the transactions are by or on
behalf of any person.
     Original is sent to Teller Supervisor at the main office and retained for five years
         after the date of the report.
     Copy to be kept on file at originating branch.

Suspicious Activity Reporting:

A Suspicious Activity Report must be filed when the credit union detects or suspects any
actual or attempted federal criminal violation (or pattern of criminal violations)
committed against the institution or being conducted through the credit union.

Circumstances under which a SAR must be filed:

    Insider abuse involving any amount.
    Violations of $5,000 or more with an identifiable suspect.
    Violations of $25,000 or more, regardless of suspects.


                                                                                         18
    Potential money laundering, violations of BSA involving $5,000 or more.
    When member of credit union is the victim of “identity theft.”

Possible Suspicious activities to consider include:

      Activities inconsistent with member’s business.
      Unusual characteristics or activities.
      Attempts to avoid reporting or recordkeeping requirements.
      Certain funds transfer activities.
      Customer who provides insufficient or suspicious information.
      Changes in bank transactions.
      Criminal fundraising activities.

Frontline Employees are trained for and responsible for recognizing possible suspicious
activity relating to the circumstances listed above. Becoming familiar with members can
help to recognize these inconsistencies among member transactions.

Current Risk Mitigation for CTRs & SARs:

    All CTRs and SARs are e-mailed to the BSA Officer to be reviewed for accuracy
     and completeness before being sent electronically to the IRS.
    Daily reports of transactions exceeding $10,000.00 are reviewed and signed off
     under dual control.
    Member agreements are reviewed by a designated employee to assure that the
     appropriate identification has been obtained on all new members.
    Annual training is mandatory for all employees on Credit Union University. A
     score of 85% or better is required to complete the test.
    All frontline employees will review a BSA PowerPoint semi-annually with the
     BSA Officer.
    Employees are trained to be alert to unusual or suspicious transactions to help
     deter and detect criminal activity.

Teller and Vault Activities:

    Dual control over all cash on hand, including incoming and outgoing cash
     shipments.
    Access to vault maintained in a logbook.
    All transfers of cash between vault and tellers are recorded with verification
     indicated by both parties.
    Access to teller area is safeguarded.
    Surprise cash audits performed on tellers.
    Cash limits in place for all teller drawers.
    Dual control of access to night deposits, including opening and recording the
     deposit bags.
    Dual control of access to cash machines.
    Dual control of access to ATM’s.



                                                                                      19
      File maintenance on transactions reviewed daily.
      Dormant accounts reviewed daily.
      Travelers’ checks reconciled monthly.
      Employee account activity reviewed daily.
      Two signatures required on official checks over $50,000.
      Deposit area duties are segregated for those employees having access to cash,
       those responsible for opening new accounts or changes to accounts.

OFAC Reporting:

The OFAC laws and regulations promote national and international security by requiring
asset freezing of: oppressive governments, international terrorists, narcotic traffickers,
and other specially designated persons.

Current OFAC Reporting Procedure:

The names of all parties related to a transaction are checked against the list of names of
individuals, entities, geographical locations and countries that have been identified by the
OFAC database. This includes, but is not limited to the following (as applicable):

      Beneficiaries
      Collateral Owners
      Guarantors/Cosigners
      Receiving Parties
      Sending Parties

Current Risk Mitigation:

The Webster First Federal Credit Union currently utilizes “Bridger Insight Software” to
check each member against the OFAC database on a quarterly basis. All new members
opening accounts are verified through the software daily. If the software determines that
a name is suspect, the account will be frozen and all information on the account will be
forwarded to the Compliance Officer, according to WFFCU procedures. The
Compliance Officer will then either release the block or if a “true match” file the
appropriate report with OFAC. No OFAC hold will be released without the approval of
the Compliance Officer.




                                                                                         20

								
To top