Topic: Bank Secrecy Act & Anti-Money Laundering (BSA/AML)
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How can we comply with customer identification program (CIP) and customer due diligence (CDD) beneficial ownership requirements when purchasing shares of participation loans, sometimes years after their origination? We typically wait ninety or more days before receiving Bank Secrecy Act-related documentation, which we sometimes do not receive at all.
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We do not believe that FinCEN’s CIP and CDD beneficial ownership requirements apply when purchasing a participation interest in loans that have already been originated, but we recommend confirming this conclusion after sharing all relevant information and documents with your bank counsel. FinCEN’s CIP regulations require banks to obtain certain information from a customer before…
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When an attorney deposits more than $10,000 cash into an Interest on Lawyer Trust Account (IOLTA) on behalf of one of their clients, are they required to provide identifying information for the client so that we can file a currency transaction report (CTR) with this information? Some attorneys have been hesitant or refused to give us their client’s information in such situations.
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Yes, we believe you should require an attorney to provide you with their client’s identity in such situations, since you must include this information in your CTR. When FinCEN’s regulations require financial institutions to file a CTR, the institutions also must verify and record the identity of the individual presenting the transaction and “record the…
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We filed a suspicious activity report (SAR) for suspected structuring by an employee who banks with us after our compliance software flagged the activity. The FDIC has requested additional information related to this SAR, including the employee’s employment file (excluding any HIPAA-protected information). We did not identify the employment file as supporting documentation in our SAR or use any information from it to make our SAR determination. Are there any problems related to providing this kind of employment information to the FDIC?
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We do not recommend providing any information to the FDIC that is not “supporting documentation” for the original SAR, as the Bank Secrecy Act’s safe harbor from liability for disclosures of possible violations of law applies only to the SAR itself and the SAR’s supporting documentation. The Bank Secrecy Act provides banks with a safe…
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For Customer Identification Program (CIP) purposes, how should we describe a person’s occupation if they are a stay-at-home mom? We believe FinCEN prefers the term “homemaker,” but we typically use “stay-at-home mom.” “Occupation” also appears as a field on items such as FinCEN’s Currency Transaction Report (CTR), and we want to make sure we are using the correct terminology.
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We recommend setting a policy or procedure to ensure that you are using the terms “homemaker” and “stay-at-home parent” consistently for all customers who fit those labels and are not otherwise employed. Additionally, you should monitor such customers’ activities and “pay particular attention” if they “continually make large cash deposits,” as suggested in FinCEN’s guidance…
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For how long are banks required to file Suspicious Activity Reports (SARs) for continuing activity after the first 90-day review and the subsequent filing of SARs over a 12-month period? Are banks required to continue filing follow up SARs after the first 12-month period if the activity continues?
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Yes, we believe that institutions must file SARs for continuing suspicious activity after the first 12-month period of suspicious activity and for as long as the suspicious activity continues. When your bank identifies suspicious activity, it must file a SAR for “any suspicious transaction relevant to a possible violation of law or regulation,” but FinCEN…
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Our learning management system provides two courses on human trafficking. Are there any laws or regulations requiring banks to provide their employees with training on identifying and reporting human trafficking?
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No, we are not aware of any law or regulation that requires banks to provide their employees with training on identifying and reporting human trafficking. Although the Bank Secrecy Act (BSA) regulations require banks to establish a BSA compliance program that provides training for appropriate personnel, a course on human trafficking is not specifically required.…
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What trust paperwork should we collect when opening a revocable living trust account when the bank is not a trustee? Is it better to collect only certain pages, or should we collect the entire trust? Does having the entire trust put us at a greater risk of liability for not following stipulations of the trust?
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We recommend that you request a certification of trust from the trustee instead of the entire trust instrument when opening a trust account (given that your bank is not serving as trustee), unless you have specific BSA/AML concerns or otherwise are required by law to inspect the entire trust instrument. There is no law that…