Qualifications for a BSA Officer

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Question:

We need to replace a BSA officer for one of our subsidiary banks. Does the new replacement need to be an "officer" of the bank? We have an employee of the bank that is knowledgeable of this area, but they are not classified as a bank officer.

Answer:

From Ken: Following are excerpts from the FDIC and OCC's most specific guidance on your point. Neither answers your question directly, but the FDIC's emphasis on raw "power" would answer it for me. The ability to "make and enforce policy" belongs to a select few in most banks. Aside from the CEO's secretary, only an officer generally has that kind of juice.

Lack of officer status would not be treated as a violation on its face, but it might be a red flag to the regulator. Promoting a competent employee may be cheaper than appointing an inept officer.

From FDIC FIL 2996
The designation of an individual or individuals to be responsible for coordinating and monitoring compliance with the Bank Secrecy Act. To meet the minimum requirement, each bank must designate a senior bank official to be responsible for overall BSA compliance. Other individuals in each office, department or regional headquarters should be given the responsibility for daytoday compliance. The title of the individual responsible for overall BSA compliance is not important; however, the level of authority and responsibility within the institution is. The senior bank official in charge of BSA compliance should be in a position, and have the authority, to make and enforce policies. A "BSA Officer" who reports to a senior official would not be sufficient to meet the requirements unless the senior official is officially designated as the officer in charge of overall BSA compliance.

From the OCC BSA/AML Handbook
Compliance Officer : A national bank must designate a qualified bank employee as its BSA compliance officer, who has daytoday responsibility for managing all aspects of the BSA compliance program and compliance with all BSA regulations. The BSA compliance officer may delegate certain BSA compliance duties to other employees, but not compliance responsibility. The bank's board of directors and senior management must ensure that the BSA compliance officer has sufficient authority and resources to administer effectively a comprehensive BSA compliance program.

First published on BankersOnline.com 4/01/02