BSA Risk Assessments
Numerous banks have been the subject of public BSA enforcement actions within the past year and one common theme throughout these public, written actions was either the lack of, or deficiencies associated with, the subject bank’s BSA Risk Assessment.
There is no FinCEN or prudential agency mandatory requirement to conduct a BSA Risk Assessment but risk assessments are the second topic addressed in the BSA/AML Examination Manual. The strength of the language in the exam manual makes it easy to deduce that a comprehensive, risk-based assessment will be the focal point of a bank’s BSA examination.
The examination manual specifies that risk assessment was given its own section in order to “emphasize its importance…in the bank’s design of risk-based controls.” Let’s all heed the examiners strongly worded advice on this issue and follow their expectations.
The examination manual clearly states that if a bank has not completed a risk assessment on its own the issue will be discussed during the examination and the examiner will conduct their own risk assessment based on available information. The examiner will also conduct a new risk assessment if the bank’s is judged to be inadequate. Tell your own story completely by putting your best foot forward before the examiners tell it for you.
A risk assessment is the first step in determining the focus and parameters of the bank’s BSA monitoring program, determining the scope and coverage of its compliance audit program and in validating its transaction monitoring system.
Participants receive a detailed manual that serves as a valuable resource long after the conclusion of the program which will serve as a vital resource in developing or enhancing the bank’s BSA risk assessment program.
- Levels of management, business units, and appropriate staff that should be involved in the BSA risk assessment process including report distribution
- How to identify and measure residual risks, assess and rate mitigating controls, and arrive at a final residual risk rating for segment and composite ratings
- Determination of which products, services, customers, entities, transactions, and geographies to include within the assessment
- Metrics necessary and timing methodology for year to year or quarterly comparison
- Development of framework for scoping, identifying, assessing, testing, monitoring, and reporting
- What should be documented and reported versus addressed informally
The program is designed for BSA Officers, Compliance Officers, Risk Officers, Auditors and supporting staff members.
Don L. Blaine is the Senior Training Consultant for Compliance Resource, LLC, a source of compliance assistance for financial institutions. Don has over 30 years of experience in regulatory compliance for the banking industry with banks ranging in size from community banks to money center banks. He is considered a subject matter expert in many of the consumer affairs laws and regulations and will be primarily specializing in training activities that will encompass the Bank Secrecy Act/Anti-Money Laundering laws and regulations as well as many of the laws and regulations related to deposit compliance. His prior roles have included: Chief Compliance Officer, Senior Compliance Regulatory Examiner, Compliance Audit Manager, and business unit compliance manager. He has taught at the ABA’s National Compliance School and has also served as an instructor on BSA and compliance topics at various programs offered by state banking associations. Prior to joining Compliance Resource, LLC, Don served as a consultant to numerous banks in areas ranging from BSA to lending and deposit compliance. He has attained Certified Regulatory Compliance Manager (CRCM) and Certified Risk Professional (CRP) certifications.
Institute of Certified Bankers: Visit http://www.icbmembers.org/login.aspx for instructions regarding self-reporting. Estimated credits: 2.5 CE Credits
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