A U.S. Treasury Department division charged with reviewing how financial institutions make use of complex risk models has begun asking questions about how companies calculate money laundering risks. The department's Office of Comptroller of the Currency (OCC) published updated supervisory guidance on model risk management in April but did not specify at the time whether its Risk Analysis Division (RAD) should quiz financial institutions about models related to the Bank Secrecy Act (BSA). The division, which has typically evaluated models on enterprise, credit and market risk, has shifted some of its focus toward reviewing how banks model customer risk scoring...
Financial institutions are struggling to understand and meet federal expectations linked to anti-money laundering risk modeling five years after regulators published recommendations on the topic, say sources.
Short of abiding by the Community Reinvestment Act and other prohibitions against discriminatory lending, banks still have the right to choose who they'll do business with. While that seems like an obvious statement, it gets drowned out in the debate about "de-risking."
The U.S. Treasury Department can expedite civil monetary penalties against financial institutions that violate the Bank Secrecy Act and other rules tied to safety and soundness, under guidelines proposed Thursday.
Federal financial regulators have asked more than a dozen large and midsize banks to better ensure that validations of their anti-money laundering risk models are conducted independently, say officials.
In every longstanding relationship, there comes a point when both parties begin to question something they once thought they had agreed on. Talk to a Bank Secrecy Act officer at a conference, over dinner or in a bar and one point of friction with federal regulators inevitably becomes clear.
U.S. banking regulators will weigh next year whether to incorporate 2011 supervisory guidance on model risk management into the interagency manual used by Bank Secrecy Act examiners, say federal officials.
The U.S. regulator of national banks has begun stress testing midsize financial institutions for adequate safety and soundness controls, including anti-money laundering and sanctions checks, say financial lobbyists and compliance officers.