BSA Training Is For Everyone!

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Question:

I'm the Internal Auditor of a community bank and will really appreciate your help with this. I'm working on the BSA Internal Audit and was trying to see if the FDIC/State requires for all employees to complete their BSA training, regardless of their department? We have a very good compliance program and training but it seems that some of the Loan department has not finish or even started with their online BSA training. Should I include as a recommendation to make sure that all employees complete their BSA training or should I write it up as violation? If you advise me to write it as a violation, give me good arguments because I have a stubborn Compliance Officer. Once again I would like to thank you for your time and assistance.

Answer:

The citation requiring your bank to have a Bank Secrecy Act training program is FDIC Regs, 12 CFR 326.8(c). It calls for "training for appropriate personnel."

There is no regulatory language that defines "appropriate personnel" as including lenders. However, I suggest you read some of the background information on the AmSouth civil penalties. The lending function in that bank was implicated.

In addition, the material put out by FinCEN in its SAR Reviews shows that a fair amount of suspicious activity involves money laundering via loans, as well as increased instances of mortgage fraud.

No one is suggesting that lenders should have to sit through classes on completing CTRs! That would be the height of folly. But lenders often know and see things about bank customers that no one else does. When those things are suspicious, the lenders need to be aware of the requirement for filing SARs, and the bank's processes for getting that done.

As for your Compliance Officer, this wake-up of your lenders should make the CO an ally, rather than an enemy.

For what it's worth, I'd recommend writing your finding up as a strong recommendation, and include it in the report (not just the exit interview). Make certain that senior management gets put on notice. You don't want your audit of BSA compliance to be found wanting by your examiners when they next arrive.

First published on BankersOnline.com 1/31/05