I attended an Interagency Anti-Money Laundering Conference on June 11, 2003. One of the speakers, John Davidson, Sr. Attorney in the Office of Special Investigations of the Federal Reserve, made the following statement (and repeated it several times for emphasis):

After you have done your search for the 314(a) requests, DO NOT KEEP A COPY OF THE LIST!

Of course, this went against the grain of every banker present who is used to keeping copies for audit purposes, proof we did it, etc.

Mr. Davidson again repeated, DO NOT KEEP A COPY OF THE LISTS. What he said to do was this:
Keep a copy of the FinCEN TRACKING Number, and the results of your search, but DO NOT KEEP A COPY OF THE LISTS.

Mr. Davidson is in Washington DC. Regulators from the other agencies were then and agreed with him.

So for anyone using the 314(a) Checklist in Bankers Tools, ignore the line near the bottom that says to keep the FinCEN request. You can keep any of your back-up documents that shows your search results, and the FinCEN Tracking Numbers can be written on the top of the form, but don't keep the list.

Intriguing. The original instructions made it plain that no secondary use was to be made of the list, but nowhere did they say it was to be destroyed.

If it's supposed to be some sort of a secret it kind of makes you wonder why they don't encrypt it, doesn't it?

My guess is they don't want a repeat of that first "secret" list that came out for a one-time check and then people started checking new customers against it and then it was "leaked" and on and on . . . ..

I was unaware of this. In fact, when I had an external auditor come in they wanted to see the list. What do we do now?

He also stated that it would be acceptable to add the names to any bankwide list of names of individuals that the bank chooses not to do business with.

Just don't keep the names on a 314(a)list.

Did he say what the penalty would be or what violation would be cited if you are found in possession of the list after your initial search? Or, was his comment directed toward reducing the risk of discrimatory issues? Has FINCEN published any commentary on retaining/destroying the list?

He did not indicate a specific penalty. He just repeated...Do not keep the names.

By the way, he helped draft several section of the Patriot Act.

Don't keep the list, but you may add them to your "Do not do business with" list. "Why is X on this list" someone asks, "Oh it says here 314(a)". That is better than, "No reason".

I wonder if they'll come out with this officially and in written form? Then you'd have something to show the auditor who is asking about it.

Yep - it seems there's the left hand, and then there's the right hand.

Tell you auditor to contact Mr. Davidson in Washington DC. Send me a PM and I'll give you his number.

It also seems interesting that FinCEN has not come out with anything on this. But here's what gets me. FinCEN has said they reserve the right to require more extensive searches than the "normal" searches (electronic search, search only 6 months of certain transactions, etc.), but they want the list kept to as few employees as possible.

So tell me FinCEN, how is it possible to search the rafters for the past 5 to 9 years on just about everything, do it in less than two weeks, and have only one or two employees with the list?

As Arte Johnson was wont to say on "Laugh In" ---

"Very interestink. But SCHTOOPID!"

John:
I can see a bunch of these "youngsters" around here with blank looks on their faces, asking: "Who is Arte Johnson? And what is 'Laugh In'?" But, I can still close my eyes and see him peddling furiously on that little tricycle until he fell on his side. Yes, pretty schtoopid, but funny!!

So you think "sock it to me" would be a foreign term?

Or "here come da judge!"

Not at all! Say "Good night Dick".

If we point the Fickle Finger of Fate back at the original question/statement, I think there may be some who disagree with that opinion and believe the lists can be saved. I can't swear to it, but we may hear more about this in the future.

Well, as we say here in beautiful downtown Burbank, "Is that a chicken joke?"

As far as I'm concerned, they need to put that in writing. They should update the instructions to specifically indicate "Do not maintain a copy of the requests". Until then, I think a lot of banks (mine included) will continue to keep copies.

"Look THAT up in your Funk and Wagnells"

I can see destroying multiple copies of the list if multiple employees are required to do the searches, but it looks like we would need to keep one copy to evidence what names were actually searched. The list would of course be kept locked up.

"kept locked up". That is so ironic since it is e-mailed to us in the open, so to speak. Which is safe, it being on your PC or in your filing cabinet, or sent via e-mail.

I guess I'll never get over how secretive it is, yet it is delivered on a virtual postcard.

In response to KK's comment, if you read the instructions from FINCEN, and I quote " You are not required by a 314(a) request to close any account or take any other action with respect to an account or a transaction by virtue of a match with any named subject. You also should not maintain the list of named subjects for the purpose of evaluating whether to open an account or to conduct a transaction, unless specific instructions accompanying a 314(a) request state otherwise."

Ours is delivered by fax so it passes through at least 3 sets of hands even before it gets to my desk!

I had an OCC compliance examiner here when this thread started. I asked her, and she said she would keep the list to prove compliance until the next compliance exam, or the OCC or FinCEN directed, in writing, that the list not be kept. That's definitely what we'll be doing!

You bet your sweet bippy, I will keep my lists in a secure location until I get something in writing from FINCENS to pitch them.

The FDIC is here for our safety/soundness exam. One of the things they asked to see was our 314(a) lists and documentation of searches done. I'm glad I didn't shred them.