How much detail is provided to the board when you present the BSA policy annually? For example, you state that you will use Edd where warranted. Do you go into the details of when (types of accounts) and the types of EDD you will use? I feel this is too much info. You should have prodcedures that spell this out---and I am not sure board members need to be given all the procedure info. We used to give a lot of procedure info in the policy; I am trying to clean up the policy and have written procedures but these will not be included in the board packets.

Your thoughts on this topic will be appreciated. Thanks.

I always keep the procedures out of the policy, but when it comes to the whole BSA mess, I do make them available to the Board to review if they so choose. Policy is approved. Procedures are just informational.

We also send the policy for approval along with the procedures on a fyi basis. I'm not sure they read the procedures, but they're there for them.

Our last examiner in January wanted our BOD to bless the entire program, including procedures and then he wanted to see the minutes from that BOD meeting. I couldn't quite understand why he wanted it that way, but we did it to shut him up.

I almost spilled my drink on the keyboard with that last sentance! Shutting up the examiner - and other exam survival tactics.

Sobering up for a moment, it does make a rather sad commentary on regulatory oversight.

At my last bank, the OCC insisted that the Board approve the entire "program", including letting them see the procedures. We resolved the issue by including language that clarified what changes the board needed to approve and that procedural changes during the year would be spelled out in an executive summary when the program was submitted for the next annual review. Policy changes mid year would need the board. It "shut up" the examiner and allowed us the flexibility we had to have.

It also gave the board an opportunity to see just how we were carrying out the policies. I am big on executive summaries so we tried to give them the highlights "in a nutshell".

This has been a "hot button" of ours. It makes NO SENSE to have the Board approve procedures. Furthermore, they don't have the expertise to understand the procedures, so how can they approve them?

We have been discussing this with regulators at the field office, regional office and D.C. level since CIP first used these words (incorrectly). Recently, we (this was a group project between myself and several of our consultants) wrote the article "Policies, Procedures and Processes" which can be downloaded from our website.

Please read it and let me know your thoughts and experiences with this topic. I encourage bankers to print this and give it to their field examiners. Ask them to read it and give you their thoughts. Then pass them on here.

I fully agree and never in my life before the current round of BSA madness did I put procedures before a board. That is why we very carefully spelled out just what was being "approved" by the board. When you are in a nasty round of BSA discussions, sometimes you have to move on. We got the info in front of the board, but they were not "approving" it.

The exec summary for procedures said things like:

>OFAC is checked for every new account and a batch check of the entire customer database is run weekly.
>Account opening staff must risk rate customers; the risk rating is reviewed by the BSA Officer.
>The bank has engaged X vendor's software to use as part of our CIP process.

I just wanted to add, when your regulator wants procedures to go to the Board, stop to think about what their reason is before fighting the entire thing. Is it just an examiner over reaching or has there been some history of policies being in place but not really carried out, some process failures that are a concern? If there have been some breakdowns in process, then the examiner is probably trying to get more info to the board so that they will hold management more accountable and making the board more accountable at the same time. It is possible to get that info in front of the board without slowing down future procedural changes by using appropriate wording.

I always had my policy "CP-101" in front of the procedures with a separate document name such as "CP-101a" so they could be reviewed simultaneously. But only the policy was board approved.

FYI I'll discuss this on tomorrow's webinar.

Thanks for the support on this issue. I have been a champion of segmenting Policy and Program/Procedures but have met with resistance or indifference in the past. David - that document was great!

To Andy's point, I always attach the Program document to the Policy document (there are those on the Board who are info hounds like myself) but I make very sure that only the Policy and not the Program is referenced in the Board meeting minutes as the item being submitted for approval.