The push by community banks and other financial institutions to generate fee income with new products is causing some institutions to run afoul of their examiners, according to federal banking regulators. Banks are getting into trouble with their examiners because they've launched remote deposit capture and other payment products that "their systems haven't been updated to handle," said John Wagner, the Office of the Comptroller of the Currency's director of Bank Secrecy Act (BSA) compliance. We see "lines of business moving out into different products without BSA or consumer compliance being involved," he said. Wagner's comments, in response to a...
Federal regulators are asking a greater number of community banks and credit unions to invest in automated transactional monitoring systems similar to those used by their larger counterparts, say consultants.
Finding themselves locked out of some large U.S. banks because of compliance concerns, third-party payment processors are increasingly turning to small- and mid-sized institutions for financial services, say consultants.
Efforts by the U.S. Treasury Department to get small banks to file their Bank Secrecy Act documents electronically are likely to face stiff resistance despite law enforcement complaints, say consultants.
Financial institutions that don't consider Bank Secrecy Act compliance issues during the early stages of a new product's development face substantially higher compliance costs down the road and raise their own risk of regulatory compliance.
Henry Paulson, at a meeting scheduled for Friday at the Financial Crimes Enforcement Networks headquarters, will disclose plans to improve risk-based exam procedures for institutions, people familiar with the matter said.
Financial institutions with limited resources often dont seek exemptions for filing currency transaction reports because they are unable or unwilling to handle the required additional due diligence and regulatory scrutiny.