On the Front Line by ProQuest


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									      Point of Law

                                                       On the
                                                       Front Line
                                                       Boards take the lead on BSA compliance
                                                       as CUs fight terrorism.
                                                       By Stephen A.J. Eisenberg

           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       While the BSA was originally enacted            and reapprove the written programmatic             software to monitor institutional accounts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
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