![]() ![]() According to the statement, bank examiners will tailor the scope of document requests to the bank’s self-reported risk profile, taking into account the complexity of the bank’s operations and any planned examination scope previously decided upon. ![]() ![]() What is clear from the statement is that bank examiners are looking to a bank’s comprehensive risk-assessment and documents supporting the process in arriving at that assessment when initially determining the adequacy of the BSA/AML compliance program as a whole. Considerations as to the bank’s ability to identify, measure, monitor and control risks.Communications between the bank and the examiners between exams and prior to finalizing the scope of the exam.Leveraging available information provided to it by the bank, including risk assessments, independent testing, audits, analyses and conclusions from previous audits, and other information available through the off-site monitoring process.The federal agencies state that they take steps before exams in order to assess the bank’s risk profile: Of particular note, the federal banking agencies state that banks that “operate in compliance with applicable law, properly manage customer relationships and effectively mitigate risk by implementing controls commensurate with those risk are neither prohibited nor discouraged from providing banking services.” The statement goes on to assert that “banks are encouraged to manage customer relationships and mitigate risks based on customer relationships rather than declining to provide banking services to entire categories of customers.” Risk-Focused Examinations As the statement notes, it “aligns with the federal banking agencies’ long-standing practices for risk-focused safety and soundness examinations.” Risk ProfilesĪt the outset, the federal banking agencies urge banks to conduct a comprehensive risk assessment, which are deemed “a critical part of sound risk management.” Specifically, banks themselves have unique risk profiles given each bank’s focus (i.e., “a bank with a localized community focus likely has a stable, known customer base”) and complexity, which must be assessed at the outset when developing and implementing an adequate BSA/AML program. The statement itself does not purport to create new requirements but rather is a tool to enhance transparency in the approach used by the federal banking agencies in planning and performing BSA/AML examinations. The specific emphasis of the statement is to reiterate that the federal agencies will take a risk-focused approach to examinations. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) (collectively the federal banking agencies), issued a joint statement entitled Joint Statement on Risk-Focused Bank Secrecy Act/Anti-Money Laundering Supervision (the “statement”). On July 22, 2019, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the U.S. ![]()
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