Bank Secrecy Act
This is the name the Bank Secrecy Act Officer at your Credit Union.
Who is ________________? (poll the audience for accuracy)
*This individual is a designated compliance professional responsible for developing, implementing, and maintaining the credit unions anti-money laundering (AML) program.
Cash transactions involving more than this dollar amount will trigger the filing of a CTR.
What is $10,000?
*Reminder, $10,000.00 exactly will NOT trigger a CTR, it needs to be MORE than $10k.
**DAILY DOUBLE** True or False. Jane deposits $7,000 cash in the ATM on Thursday at 9pm. Friday afternoon she deposits $4,000 cash, therefore a CTR is not required, since the cash was deposited by the member on different days.
The credit union must maintain record for each corporate draft, cashier's check, money order or traveler's check it sells or issues for this amount or more in cash.
What is $3,000?
*Records must include Date, Type of instrument, serial number and amount
The government did this in October 1st, 2003 to help the fight the funding of terrorism and money laundering activities.
When is start to government enforcement the Customer Identification Program (CIP)?
*The final CIP rule was effective June 9, but full compliance was mandated Oct 1. The rule requires financial institutions to verify customer identities to comply with the USA PATRIOT ACT of 2001.
True or False: It is permissible to notify a customer that a Suspicious Activity Report (SAR) is being filed on them.
What is False?
*Confidentiality of a SAR is very crucial. You may not disclose a SAR or any information that would reveal its existence, even internally, unless it is a "need-to-know" basis.
True or False: It is permissible to conduct business with someone on the OFAC list.
What is False?
*If a member appears as a match on your OFAC, you must immediately freeze their assets, stop all transactions and failure to do so could lead to substantial fines and penalties.
Certain members can be exempt from CTR reporting by filing this form.
What is a Designation of Exempt Person form?
*Credit Unions, Banks, Government agencies are exempt entities from CTR filings.
True or False: If a member purchases a cashier's check for $2,000 and money orders totaling $1,500 on the same day, no record would be necessary because both amounts are below the $3,000 threshold.
What is False?
*Multiple instruments by one person on the same day must be treated as one purchase.
The USA Patriot Act defines this as a financial relationship established to provide services, such as deposit accounts, transaction accounts, credit accounts or safe deposit boxes.
What is the definition of an account?
*This specifically refers to new, formal relationships created to engage in ongoing financial transactions.
This is the provision that protects financial institutions, employees, and directors from civil liability when filing SARs, even if the report is false or malicious, provided it is filed in good faith. This immunity covers both mandatory and voluntary filings, protecting institutions from federal, state, and contract-based lawsuits, and it prohibits "tipping off" customers about the filing.
What is the Suspicious Activity Report safe harbor provision?
This is the number of days that you have to file a Designation of Exempt Person (DOEP) form after the initial transaction.
What is 30 days?
*If you filed a DOEP and circumstances changed or it was in error, you would resubmit the form with the box checked "Exemption Revoked" or "Exemption Amended".
The credit union has this many calendar days after the "business day" the reportable cash transaction occurred to file a CTR online.
What is 15 calendar days?
True or False: The credit union must maintain different records for non-members than for members when it comes to maintaining information with regards to the purchase of monetary instrument using certain amounts of cash.
What is True?
*CU must verify the identity of the non-member with a driver license, passport, or other official document. CU must record their name, address, ss#, DOB, and ID verification.
Discussion: Does your CU allow non-members to purchase monetary instruments?
These are the 4 core Consumer Identification Program(CIP) requirements of identifying information required to open an account.
What are 1. Legal Name. 2. Date of Birth. 3. Physical Address. 4. Identifying Number?
*This rule generally requires that verification occur before opening the account or within a reasonable time after. While this timeline is not specified, it would be determined by your risk assessment.
True or False: If you notice something that seems suspicious, you should keep it to yourself until you have more details. You don't want to draw attention to it until you have all the facts.
What is False?
True or False: It is permissible to conduct a transaction for someone who is on the FinCen list.
What is True?
*Steps to take if a member shows up on the list: 1-Maintain Confidentiality 2-Save documentation from the members account for 12 months 3-Report positive hit to FinCEN within 14 days 4-Document the Process 5-Consider methods of enhanced monitoring on the member.
True or False: A member cashes a check for $15,000. Later that same day, he returns to the credit union and deposits $12,000 in cash to his checking account. No CTR would be required because the net cash received by the member at the end of the day is only $3,000.
What is False?
True or False: If a person purchases a cashier's check for $12,000 in cash, a CTR should be filed.
What is True?
These are 3 examples of a type of member.
What are individuals, corporations, partnerships, trust, estates, associations, unincorporated groups?
These people within the credit union should be informed of the SAR.
Who are the Board of Members? Who are only those who "need to know"?
*Confidentiality is VERY critical with a SAR reporting, only insiders who need to know should be aware of the SAR, unless they are the subject of it. The Board needs to be made aware at the next meeting, but not with all the details.
**DAILY DOUBLE** This is the necessary action taken when served with a subpoena for a SAR request.
These are the three steps that occur in Money Laundering.
What are Placement, Layering and Integration?
*Placement is illicit funds first being introduced into the financial system, Layering is moving funds through complex transactions to distance the funds from the initial source, Integration is reintroducing funds into the economy legally (investing, purchasing luxury items to be resold later, creating fake invoices to pay)
This is how long a member must maintain an account before they are eligibile for a Designation of Exemption on CTRS.
What is 2 months?
*Member must have maintained an account at the credit union for at least 2 months and make "frequent" cash transactions more than $10,000.
**DAILY DOUBLE** The term "frequent" is defined by this many reportable transactions within 12 months.
This is the name of the method of money laundering in which negotiable instruments were purchased for cash below the currency transaction reporting threshold.
What is structuring or smurfing?
*This is a technique of money laundering that involves breaking down large amounts of cash into smaller transactions to avoid a CTR.
True or False. The BSA Officer must formally approve the written MIP (Membership Identification Program).
What is False?
*The Board of Directors need to formally approve the MIP.
This is the number of calendar days that the bank has to file a SAR once suspicious activity has been detected.
What is 30?