While the Bank Secrecy Act (BSA) was originally enacted in 1970 to enforce a variety of criminal actions, the law has evolved to primarily focus on and deter terrorist activities. Since the life-blood of terrorists is the funding they receive, a CU's obligation to establish a comprehensive anti-money laundering (AML) program is critical to America's national security interests. Boards of directors play a critical legal and leadership role in the creation and maintenance of a comprehensive BSA AML program. When it comes to BSA compliance, the buck stops with directors. The responsibility for serving America's national security interests is a key reason to take BSA very seriously.
Point of Law On the Front Line Boards take the lead on BSA compliance as CUs fight terrorism. By Stephen A.J. Eisenberg I n March, Wachovia Bank entered into “[t]he management of the credit union must geographic dispersion. This protocol enables a deferred prosecution agreement with promptly notify its board of directors, or a the institution to apply procedures and the U.S. Department of Justice after committee designated by the board of directors processes that will serve to mitigate the the bank was charged with willfully to receive such notice, of any SAR filed.” unique money laundering risks it faces. failing to establish an anti-money laundering A matrix showing nature and number of Adequate resourcing to maintain the (AML) program as required by the Bank SARs filed included in each month’s board viability and effectiveness of a BSA AML Secrecy Act (BSA). package should satisfy this requirement; program is an unstated, but required Would you have wanted to be one of the providing specific SARs is not required. element to a legally sufficient program. directors who signed a consent order to pay However, if a director or committee This means that funding must allow for $160 million under a deferred prosecution member is involved, the director may not an appropriate number of individuals agreement? I think not! be notified but the remaining non-suspect to carry out the program’s objectives. As a preventive measure, let’s talk about directors must be notified. Moreover, for most institutions there will a board’s BSA responsibilities. Members of the board should review be a need for specialized IT hardware and While the BSA was originally enacted and reapprove the written programmatic software to monitor institutional accounts in 1970 to enforce a variety of criminal policies for a CU’s AML program annu- and services. actions, the law has evolved, particularly ally. Ongoing board-level assessment of the The deployment of a legal and successful after September 2001, to primarily focus program allows procedures to be enhanced, AML program is a clear legal obligation of on and deter terrorist activities. Since the thereby capitalizing on the resources a financial institution’s board of directors. life-blood of terrorists is the funding they supporting the program. An outstanding The sophistication of a credit union’s program
Pages to are hidden for
"On the Front Line"Please download to view full document