COVID-19 circumstances push limits of the Bank Secrecy Act. Let a SHAZAM Secure BSA expert complete your next exam.
posted by Luann Kohlman, AAP, APRP on Wednesday, November 11, 2020 in SHAZAM Blog
The COVID-19 pandemic has extensively affected every financial institution in the United States. Many have closed their lobbies or have employees who have become ill, while others are still working remotely. The workload has increased with the implementation of the coronavirus relief bill (CARES Act), which included stimulus checks, the Paycheck Protection Program (PPP) loan program, and increased unemployment payments. This influx has taxed Bank Secrecy Act (BSA) programs beyond typical bounds.
Attributed to the pandemic, financial institutions are seeing more people doing business with cash than ever before. So, it stands to reason that many businesses may be going over the $10,000 Currency Transaction Report (CTR) threshold. This, coupled with the impact of unemployment insurance fraud schemes, is resulting in more CTRs and Suspicious Activity Reports (SARs) being filed. Over 1 million SARs and over 14 million CTRs were filed in 2019, so it will be interesting to see 2020 year-end totals.
The Paycheck Protection Program, featuring $349 billion in government-backed loans, was rolled out quickly by institutions while they were also dealing with fluctuating staffing issues. The Financial Crimes Enforcement Network (FinCEN) adjusted the Beneficial Ownership (BO) requirements to not require re-verification of existing accountholders for these loans, but many applications came from new accountholders, for which the BO Customer Identification Program (CIP) still needed to be performed as part of customer due diligence.
All these things have strained institutions’ BSA programs, leaving one to wonder, “Is my institution compliant?” Ahead of your next BSA exam, you may want to enlist the help of an expert.
For your institution to be compliant, you must adhere to the five pillars of an effective Bank Secrecy Act/Anti-Money Laundering (BSA/AML) program:
- A system of internal controls
- Independent testing
- Designation of a compliance officer or individual responsible for day-to-day compliance
- Training for appropriate personnel
- Appropriate risk-based procedures for conducting ongoing customer due diligence
With the uncertainty of these times, staff shortages and questions about how the BSA requirements currently affect your financial institution, now may be the time to have a SHAZAM Secure® BSA expert complete your upcoming BSA exam. Please contact Tom Quist at tquist@shazam.net to discuss your needs.
Independent testing is one statutory requirement of an effective BSA/AML compliance program. Independent testing assists with the evaluation of the effectiveness of BSA programs and the need to implement stronger controls.
About the Author
As a senior risk consultant, Luann uses her years of electronic payment experience to assist financial institutions in completing their annual ACH audits and BSA exams. She calls upon her ACH expertise to provide risk mitigation training and guidance to SHAZAM participants.
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