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Proposed OCC Risk Database Called Redundant, Burdensome
By Brian Monroe
printCorrection Appended The extension of a money laundering risk database run by the U.S. Treasury Department's Office of the Comptroller of the Currency that is designed to reduce a bank's compliance burden could add confusion to the risk assessment process for some banks and add redundancies, some compliance analysts say. The OCC has asked financial institutions to submit comments about the data collection system, which the agency says is designed to "enhance the ability of examiners and bank management" to identify money laundering risks in bank products, services, customers and locations. The comment period closes Oct. 9. The OCC, which...
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Large banks need to clearly delineate which senior executives are responsible for Bank Secrecy Act compliance violations, the U.S. Comptroller of the Currency said in a speech Monday.
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.
Prompted by financial regulators, some of the largest U.S. banks have been reevaluating how they gauge geographic financial crime risks in designated high-risk regions of the country, say sources.
Since 2008, federal financial regulators have increasingly quizzed compliance staff about such scenarios in an effort to determine how banks are distinguishing their low-, moderate- and high-risk clients, according to bank officials.
An intergovernmental watchdog that recommends regulations to fight money laundering will release a global threat assessment of the crime as early as 2010, as part of an effort to prod countries to stiffen their laws.
Reaching the point where an off-limits, high-risk jurisdiction becomes bankable is a complex compliance process involving many factors, including political and economic stability, country reports by international watchdogs and old-fashioned shoe leather, say former bankers and consultants.
The Financial Action Task Force identified key elements of gauging geographic and other risks and of defining acceptable threat levels to aid governments and financial institutions adopting a risk-based approach to their anti-money laundering programs.
Treasury Secretary Henry Paulson, speaking Friday at the Financial Crimes Enforcement Networks headquarters, announced initiatives that include a more risk-based examination process and a narrower definition of the money services businesses industry.
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.
FinCEN placed 201 out of 222 government agencies in the 2007 Best Places to Work survey based on employee satisfaction and engagement. The poll, released April 19 by American University and the Partnership for Public Service, found FinCEN especially weak in teamwork and effective leadership.
A survey of 34 government entities and large banks by the Financial Action Task Force suggests they don't agree on how institutions should adopt the risk-based approach, whereby banks identify their risks then allocate anti-money laundering resources to the most vulnerable areas.
The Federal Reserve and New York State Banking Department entered into a written agreement with Sumitomo Mitsui Banking Corp. on Wednesday ordering its New York branch to improve Bank Secrecy Act compliance deficiencies a month after another Japanese bank was cited for risk management deficiencies.
Lisa Arquette, associate director of the FDIC's Anti-Money Laundering and Financial Crimes Branch, says examiners are conducting fewer risk assessments as more banks prepare their own.