We are currently being audited by the FDIC. Every year I develop a BSA Testing packet that includes a BSA Review and Test for both money handling employees and non-cash employees (mortgages, ops etc.) In the past we have relied on this as our 'BSA Training.'
Now it seems the auditor we have is questioning whether "testing" can be considered training because we don't actually go out and do training in person.
Has anyone else ever heard of this?
This year we are going to an online training with some software we purchased. This to is a "test". Would this be considered compliant?

If it is instructional vs. inquisitive in nature I'd say it could be training. So it depends on the material.

If it is a Q&A for an audit, it would be inadequate training IMHO as there isn't anything about requirements, just some questions. A good preamble to the questions would be a qualifying note though.

We rarely go out in person anymore...it's done through BVS on-line training.

That sounds more like training than auditing. Talk about it with the examiner and explain. If they aren't happy, go up one level.

Testing is the ultimate result and verification of training. Normally, it's not fair to just test, but since the staff is on the job and not in a classroom environment, the elimination of the teaching part - that chore is actually accomplished on the job through supervisors and assigned staff, is only logical and should be accepted at all levels. Of course, all staffers need to achieve a passing grade or go through a training and be re-tested.

If you think about it, you are actually being proactive in that by testing - a task that is not required - you are not simply training, but verifying that the staff understand compliance issues. So, you should get a well done from your Auditor for being so proactive.

Oh please don't say test.

I tried to do a simple test to see how much the staff knew about BSA when I took over this position. Needless to say, it was not well received.

I even included a memo with each one stating that the purpose was to find out what areas needed to be reviewed more specifically in training and that the only reason for including names on the forms was to identify the departments that were impacted. (This is a fairly small bank and departments can often be intermingled with staff.)

The passing glares were obvious for over a month.

kansayaku:
You just proved my point - testing is very proactive in the area of training people - people don't like to take tests, especially in the on-the-job environment. But, testing is the ultimate verification of expertise in the covered area with no amount of teaching without testing equal to a test.

With that said, your experienced has been shared by a lot of us - testing is not well received in the banking world.

Back to the original post - I cannot imagine an internal auditor questioning the use of testing as the training vehicle - as long as a passing grade is required.

"Test" can have different meanings. I originally read that as testing the systems and employees in an audit, not as in an instructional review. In the case of the latter, it is definitely tied to training. Though, and I believe we discussed it here before, one poster believed that if an employee passed a pre-test, they didn't have to go through instructional periods. And as I recall, they were criticized because that didn't meet the mandatory training spelled out in their policy.

That said, BSA doesn't require annual training. (12 CFR §21.21(c)(4) Provide training for appropriate personnel.)

What is the examiner's opinion now that we're at the end of the day and you've had additional discussions? Oops, an examiner working working on Friday. Sorry about that.

We were examined earlier this year (OCC) and the OCCs current take is that even annual BSA/AML training is not adequate. They want to know "what else you do" to keep staff current in changes, recent cases, etc. We have instituted a newsletter that will not just be on BSA but our first issue was about identifying suspicious activity. A few a year will touch on those topics. That counts as training. (We are $2+ Billion).

In regard to the original question, if supervisors ARE reviewing procedures with staff periodically, I would have them document those meetings..that can count as training if you can prove it occurred.

Kath - I'm hoping that annual training is sufficient for a small bank environment. Regulators always expect more from big banks. I'm thinking that that is were a lot of confusion comes from relating to compliance issues - it's one size fits all within regulations, except for a few issues, but there appears to be different unpublished standards when it comes to asset size, risk level and product mix.

I agree. However, I wouldn't be surprised if on BSA/AML type of things that on bank's next exams they hear the same thing. They want this drummed into people's heads. The newsletter thing is easy to do..I made it one side of one page so they wouldn't think it was too much to read! We also attend periodic Branch Mgr meetings and discuss topics which they then pass on to their staff.
We don't have the staff to travel to all of the branches plus hit the rest of the bank!

I should add one thing...despite our asset size, we have only 20 branches. Our assets are primarily comm'l loans - we operate in a suburban community, no international business except a small amount of wires and l/cs...so we are really more like a smaller community bank and the regulators see us in that sense as differt from larger higher risk banks. But they still want more frequent bsa/aml training.

Your banks situation will impact this. My point is they can't cite you for not doing "annual" training. But if there have been significant changes to the BSA and your effected personnel are unaware of the requirements or if you have turnover and don't have training for the new folks, your training program can certainly be criticized.

But if what you are doing is sufficient, stand your ground.

The OCC, in current BSA exams, references their BSA exam manual where it says:

• Training is ongoing and incorporates current developments and changes
to the BSA, anti-money laundering laws, and OCC and FinCEN
regulations. New and different money laundering schemes involving
customers and financial institutions should be addressed. It also should
include examples of money laundering schemes and cases, tailored to the
audience, and the ways in which such activities can be detected or
resolved.

This language is virtually repeated in the new FATF pronouncement. Their emphasis was on "ongoing", keeping staff informed about new and different money laundering schemes (external and internal), and so forth.

I know my bank is not the only one receiving this message during exams this year. Reading their exam manual is quite eyeopening as to expectations. I am just glad that a newsletter approach along with regular training (on line, videos, classroom) is sufficient.

That is a well worded question and any bank that is trying to meet the spirit and intent of BSA should have no problem complying. While I object to the term "annual", "ongoing" is appropriate based on today's environment. It also allows flexibility between banks and geographic regions.